Hi y'all. I am currently leasing my GLE 350 and I am 13 months into my 36 month lease. Given the way things are now, I am considering (well, most likely will be) buying my GLE at the end of the lease or possibly during, depending on the numbers. One concern I have is keeping it outside of warranty. Luckily at 10,500 miles and 13 months, I have been mostly trouble free/minor software issues which seem to patch themselves with each update. If I were to buy it at the end of the lease, I should have 1 year of new car warranty left.

I'd like to get some input from others who have done this/already went through the process, and my questions are:

1. What is the latest I can buy the new car extended warranty from Mercedes?
2. If that time has passed, how is the CPO warranty and when can I purchase that?

As of right now, it appears I have 6K in equity if I trade in my GLE and 8K if I sell it myself, but I do not want to get rid of her yet and everything else I would maybe want seems to have "mArKeT aDjUsTmEnTs". Also I am in Florida for location purposes. Thanks in advance!

 

Perhaps the easiest thing to do is wait for your 3 year lease to be near expiration. At that point I would look to buy it at a price that has already been determined. If you believe that it is a discounted price based on market conditions, which is nearly impossible to determine at this time, then you’ve captured a good deal. If market conditions are different, which they most likely will be, then you can opt to give it in , or buy it. If you do buy it you will then have 1 more year of warranty remaining. I personally would never want to own a MB off of warranty. I buy my cars keep between 3 to 4 years and then trade them in . Most likely at the end of the 4th year the car market will be significantly different than it is now. At that point you should trade it in, and start enjoying your new MB. I don’t believe that buying an extended warranty is a good move. You will most likely want a different vehicle after 4 years, and the extended warranty is costly. I know 3 different individuals who just did what I am suggesting. Why commit now when no one knows what the new car market will be at the end of your leases.

 

To me, the question is whether I like the car or not. If I like it and want to keep it, get a longer Warranty (from Mercedes) or a Service Contract (Breakdown Insurance) (from an Insurance Company.)

I would call your Dealer and talk about extending the factory now, usually to seven years or a fixed mileage. We choose 125,000 miles, but the prices change with mileage.

Second choice would be to ask your Dealer if they will sell you the car out of lease at the residual value PLUS the dollars they spend to inspect and subsidize the CPO, and it'll be an unlimited mileage warranty that you can add years to at purchase.

Third choice is to buy that Breakdown Insurance from an Insurance Company, but it's best to take that contract to a Service Manager and ask if they have good claims experience with that company.

We did this a little differently with a recent purchase. We actually leased (my first, having been an F&I Guy before) our 2019 GLC. We took a 48 month single pay lease, with a 48% residual. (48% at 48 mos, figured in fall of '19, was quite high.) The Dealer agreed to reselling it to us at that residual plus their CPO expenses - if we still want the car. We did this because of the anticipated facelift and potential value drop at that time, and to give us more flexibility. And then this spike in used prices hit and our options are wider.

 

A 48 month single pay is a terrible idea. If the car is totaled the money is gone.

 

Ha ha. You should check it out, see the reduced MF and residual with a single pay. If I'm making 3% on my money, I'll keep it and come out ahead. I actually know how this works.

But I have solved your problem! I buy car insurance.

 

If the car is stolen or totaled, insurance will pay only for the current market value of the car, not how much money you’ve already put into it. In todays market that might work out. No one knows what happens in four years. If 3% on that small amount of money makes you happy - enjoy. Same line of thinking would be if you care about 3% you might care more about writing another check. My point is there is a lot of risk in that option most buyers don't consider. You know more than one person might actually know how this works

 

I’m not an expert so I may not be correct but from what I understand, when you pay a Jesse in cash, or a one payment, the money is out in escrow and if the car is stolen/totaled the excess is returned to the leasee. Similar to if they had done a no money down lease. The worst you can do is put a significant amount down and still pay monthly.

 

Insurance does not change, whether you buy, lease or finance a car. It pays Replacement Value or Replacement Car. And if you have "put money into it" and it increased the value, it would increase the Replacement Value. If there is a Loss Payee, any shortage is paid BY you, and any excess is paid TO you.

And my point is that a one-pay lease gives more options, with certainty - therefore less risk.
I am normally opposed to leases, but you should investigate before you claim knowledge. We were pretty sure we would replace the GLC with an EV, so this made even more sense.

Sorry I mentioned a one-pay. Few people investigate them, but they can be useful, if understood.
This was a thread about Service Contracts, not resale strategies.

 

I had my daughter do a single pay lease on her GLC. This was 25 months ago when interest rates were near zero. Since she was earning nothing with her cash, she does have a portfolio of other investments, I calculated at the time that at the end of the 3 years she will save over $1000.00. I did look into the possible drawbacks of a single pay, the obvious one is not having use of the money. Since insurance is mandatory, no matter how she paid for her car, it was still insured. Many people do not have the money to put out in one lump sum, that negates any consideration of a single pay. There is certainly the valid argument that there are better things to do with that amount of money, no argument, however if you are going to just let it sit there at near 0% it is something to consider.

 

If your car should be stolen or destroyed in an accident, your insurance would pay only the current market value of the vehicle, not the total amount you have invested in your lease. Mikapen - you might want to listen to your own advice.

 

I'll try to help you understand a single pay lease, and how insurance works.

Here, I'll post what I said above, if you missed it:To clarify, if you pay cash, the insurance company pays the replacement value. If you lease, the insurance company pays the replacement value. If you finance, insurance pays the replacement value.

If our GLC were totalled right now, we would probably pocket about $20,000 over residual value, leaving our 3 1/2 years of ownership costing us about $5,000, including taxes.

Or, I could trade it or sell it and realize the same gain. Actually I think it would have cost us more if we had paid cash.

I could have paid cash, but I did make a significant return on the $20,000 we held back - well over the $5,000 the cost to own, as above. I'd call it excess returns, and nothing to count on, but the flexibility the lease gave enabled it this time.

On a single pay lease, in a zero interest rate environment, you are paying virtually nothing for the money, and essentially all you pay for is anticipated depreciation.

It's always best to weigh and understand your options when purchasing a car.

 

I am not going to argue with someone who can only see one side. I get there are times it works and there are also times it doesn't. I don't care what you do. I just want to make sure forum members know when they read this and think there is only an upside. There is more to it. I will no longer engage on this topic.

 

Sorry you thought this was an argument. I was merely disclosing what anybody considering a lease should be aware of.

To those on the thread who might think that your insurance doesn't cover a leased car, I suggest you meet with a finance person to explain leasing and insurance. After all, this is the internet.

Again, I apologize for derailing this thread by bringing up a single pay lease, because apparently it's a confusing subject.

 

Obviously off-topic but since this is being discussed, in case of a loss the insurance pays MBFS, not you since they are the title holder.

 

You can buy out the car anytime and while the dealer will push to CPO the car I would only go for the extended new car warranty. It covers significantly more on the car than the CPO warranty and don’t have to pay to CPO it. Plus if you get rid of the car and want to sell it without the extended warranty you can cash out the full or pro-rated portion.
I have done this at the time of buyout. Don’t know if this can be done early since the lease holder is not actually the owner of the car.

 

MBFS is the Loss Payee, so they receive the insurance settlement, and any excess is paid to you, who owns the Insurance Policy. Same with a financed car.
In both cases, if the Buyout or Payoff exceeds the insurance payment, the "Obligor" pays the difference.

 

That's the best answer to the OP's question. I didn't know you could still extend the original warranty beyond a certain time from In-Service Date. I know I extended our original extended warranty from 75,000 miles to 125,000 miles later in its life, but I don't remember "how much later" it was. Worth investigating.

 

I am really trying to stay away but I think we have a miscommunication. I think the point is if the car is totaled and the payoff matches the value - you could be out the lease payment. The lease is basically a rental, the bank only cares about the value of the car and the insurance company the same. When leasing monthly you could be protected by a gap insurance policy.

 

Yes, this can be done as long as the car is within factory warranty conditions and the car was purchased/leased new (first registration).

 

I don't understand your misunderstanding here. There is really no difference in insurance coverage, or potential loss of your payment(s) in any scenario.

Yes, you can add GAP insurance if you don't have equity, but it's expensive. It's kind of like Mortgage Insurance if you borrowed more than 80% of your home value.

Aside from that, auto insurance is just like home insurance in that the Leinholder is paid first. The homeowner pays a shortage, or gets money back if the insurance payment exceeds the payoff. It's the same with a lease / finance / cash purchase of a car.

Hope this helps.

 

Thanks for that clarification.
I think I extended my factory extended warranty from the original 75,000 miler to 125,000 miles at about the 47th month. Used 103,000 of it by year seven, the max time you could extend.

 

There isn't one for me.

 

Thank you @Wolfman !

And now going back on topic, since it is possible to extend the warranty while the new car warranty is in effect, I think I will probably go that route if things are still crazy by beginning of 2024. That way my GLE is covered if something were to happen to it.

 

I wouldn't rush but its also okay to get the numbers from your dealer on the warranty once that gets closer. You might want to shop around too. Lots of people here have bought out of state where some dealers are more generous with discounts.

 

I think I will ride out the lease and then towards the end start shopping it. Florida used to be great with discounts, but now it seems like they are all at MSRP. What states do you recommend for better discounts outside of Florida?