don w

New 3-year lease in the next week. I did purchase the 3 year PPM for the 2019 I'm turning in now, however, because they are taking it back a few months early as MB usually offers and I usually do, I'm not even getting the benefit of the 3rd service I pre-paid for. Not wanting to make the same mistake again, I'm thinking of Pay-As-I-Go for the maintenance. My research shows me that the first A-Service (10K - 1st year) miles, is nothing more than an oil change. The B-Service (10K - 2nd year) is an oil change and changing the $20 cabin air filter. If I should go for the 36 months of this lease, the 3rd service at 3 years, is the A-Service again, just an oil change. Is there any reason to pay the $1280 for PPM 3-year maintenance? Also, the PPM is in the financing, so even though it's not a lot, I'm paying interest on the $1280 cost.

GLK63AMG

The biggest advantage is to lock in today’s price of labor and parts. Things will only go up from here and the dealer near me has gone from $190/hr labor rate to $265/hr in about two years. I am taking a vacation this summer to Michigan and the labor rate is $165/hr so I’m gonna do a B service there.

UMD_terp

I always get coupons for 10% off service A or B in the mail so I’m not sure how useful it is to pay up front. If I recall correctly, service A with the coupon and a tire rotation was like $330. Prepaid maintenance doesn’t cover tire rotation from what recall anyways.

It may depend on how many MB dealers are in your area. There are plenty to choose from around me.

EDIT: For a lease it may be worth it since it’s residualized. You won’t end up paying the full amount.

joshoz01

I was in a similar situation when I turned in my 2018 lease. I made an offhand comment to the dealer that I didn’t even get to use the 3rd service that I had paid for. He told me that the 3rd service would be completed at turn-in and if I hadn’t had the prepaid maintenance I would have been charged for that final maintenance.

For me the prepaid is worth it as I can drop off the car, they take care of everything that needs to be done and no money ever has to exchange hands.

High Technology

This is the reason it's worth it for a lease you plan to return. Your $1280 won't cost you $1280 as they will increase the residual value of the car by the residual percentage x $1280. So you're only paying the non-residualized amount, plus interest.

For example, if your residual is 60% (I have no idea what current residuals are), you'll end up paying $512 and the residual will increase by $768 if you buy the maintenance. Yes, you'll pay interest on the full amount, but even 5% on the average value is less than $50/year (similar to residual percentage, I don't know current rates so I picked something reasonable and likely conservatively high) So your lease payment will increase about $18/month for maintenance ($512 depreciation + 150 interest for 3 years = $662 / 36 is about $18). So it's really about $200/year.

Of course if you turn the car in early before the 3rd maintenance is nearly due (or due?), you'd only be responsible for the first 2 services. There is a 2-year maintenance product as well, so that may be an option if you're pretty confident you'll turn the car in early. It would work the same way, but the cost would be lower (probably $900 cost, but I only know the 3 and 4-year costs of $1,280 and $1,760, respectively). Figure 2 year maintenance would be a few dollars less a month. If you get close to the 3-year maintenance you can always get an oil change somewhere for $100 and that would be the maintenance obligation.

As a caveat - I never tried to buy lower term maintenance than my lease term, since I used to drive 15k/year so I needed 4-year maintenance for a 3-year lease... I presume you could buy 2 year, but can't be sure if they would require 3-year to residualize the maintenance.