guitarplayer

I thought this would be an interesting topic. Obviously, these aren’t cheap. Many financial ways to acquire. Cash, loan, lease, HELOC.

Some wish to to keep their money working in the market and chose to finance in some method. Probably a smart thing to do. Everyone’s situation is different. I am retired as of January at age 63 and didn’t want to deal with the hassle of the finance department and stupid questions like....you don’t have a job? Nor did I want to deal with a monthly payment so I took the lazy way, I skipped all the annoying paperwork and the pain of sitting in their office and paid cash. I was out of there in less than 15 minutes.

How about you, what drove your decision?

Skizz

I'll pay cash if I could ever get mine delivered.

guitarplayer

Hilarious and good luck!

Bubba3

Same here.

tiri

Leasing mine, again.

DaveD9

Lease, cash stays invested.

DMG

Question for lease people: Do you know what your money factor/interest rate is? Was told for this model its 4.25% rate equivalent although older models, other cars are 2.25%. Big difference. Any one else hearing the same thing?

guitarplayer

Yes I was told the same. Yikes

rominl

yes around that. you can get the latest rate on edmunds forum, they have good people reporting rates.

the rate is not good at all, big part of the reason why if we get one i'd probably just pay cash

cnnn

Leasing. As folks point out the rates can be found on edmunds. Dealers can mark up so make sure to get their base rate. Last I saw was 0.00160/0.00193 for 350/450, about 3.8% and 4.6%.

I leased mine because I don’t want to put too much cash upfront and I know I won’t keep the car for long.

Ron.s

I’ve never wanted to get locked into a lease so just write a check. The money factor doesn’t seem very good-is the way Mercedes calculates residual favorable? The last time I checked it looked like I could make a 3-4 grand selling myself because the residual was figured at wholesale or below. If you take the wholesale value of a 3 year old today it will usually be unfavorable because used prices typically move up over time as new prices increase. I suspect that an $80,000 Mercedes may lose more value than a base model and may be harder to sell so my past experience might not hold.
I plan to keep 3 years or 4 at the most and prefer to negotiate price without having to worry about the next step, getting a good trade price. One of the disadvantages of not being in a large car market.
A lease takes much of the unknown risk out so maybe I should have done more homework this time.

guitarplayer

I have always purchased/cash my Mercedes since 1987. Usually keep them a long while. Sell them outright when I’m done at a much better price than a trade. Decent equity for the next one. All were CPO dealer cars. My 2013 C300 Sport was only 90 days old. Drive as many miles as I want. Therefore a clean, simple, easy to evaluate deal with the dealership. My GLE is my first brand new one. Couldn’t resist it.

Have always leased Honda’s for my wife in the past 20 years. I know the Honda dealer owner well. Accords, CRV’s. No money down, 36 months, cheap payments right at $300 monthly. she never drives more than 12k a year. I don’t have to worry about her breaking down in an older car.

DMG

Interesting take guys but here was my leasing logic (and I've owned my other car for the last 12 years and have done great so I understand both arguments): If you are comfortable borrowing the MSRP, or whatever amount you negotiate, at 4.5% (for the 450), then it makes sense and I'll tell you why. (and 4.5% in my opinion is still cheap money especially if you can deduct a portion or all of the lease payment). The residual value is a free call option that you own, in that at the end of the lease, if the car is worth more than the residual amount, you can buy the car for the residual amount and sell it immediately after at the higher price, capturing the value you suggest you lose by leasing. Conversely, if the car, in your opinion, is worth less (ie there was an accident, your kids/dog destroyed the back seat, etc), you can give the car back and you win. I think it's that simple. The reciprocal amount of the residual that you pay along with the interest each month is what you would have lost in depreciation and because of your optionality, you can capture the overpayment back at the end if you in fact paid too much. Am I wrong in my logic?

DMG

By the way, I would also suggest that it usually doesn't make sense to buy the car back at the end of the lease because it is usually worth less than the residual value. In that instance if you really want to keep the car you can give it back and negotiate to buy from the dealer at a lower price once they own it, or do a search to find a similarly optioned same MY car for less. Granted, this is leg work many might not want to engage in but, in my opinion, with the advancement in tech over the next several years in the form of autonomous driving systems as well as higher adoption of electric vehicles/more models production in the electric format, the automakers could be way off on the residual values with these cars being worth much less in 3 years than we anticipate today. Major case imo for leasing with very little downside.

DaveD9

My wife gets bored with her car after 18-24 months. The gold Macan cost $5k for the gold paint and we lost another $3k because it was gold on the trade in. We lease three years and its a struggle to keep her in a car that long. The XJ lost $35k the minute we drove it off the lot. I know because we tried to dump it at the 4 month, 1800 mile mark. Worst car I have ever owned in 40 years!!! She just got her ordered E450 cabrolet. The grandkids love it so maybe we can keep it 3 years.

My 2020 GLE450 is a 4 year lease.

C280 Sport

I always buy CPO. Put a decent amount down and finance the rest at a very low interest rate. Cash stays working in my business and dividend stocks that get reinvested. I only paid cash one time for a car and that is because I wanted it on the spot and had to close the dealer super fast. (Porsche 911 C4s) If you have great credit, income, assets and you shop around you can get interest rates at next to nothing. I only leased 2 cars before and they were for tax purposes for my business. (I do not like to rent cars). Purchased 3 cars brand new

DMG

Understood, however, if you leased, you'd get a lower rate (in most scenarios), pay the same in depreciation as you would buying, and if you turn out to be wrong about that (you won't) you can always buy at the end of the lease for the residual value. Your "rent" metaphor is slightly to grossly inaccurate because in a lease you have the option to buy or to put back. It's so advantageous to lease that I'd love to hear the argument against leasing other than "you can get a good rate" (because the lease rate is better).