Hi, do you guys think my dad got a good deal on this lease:

We leased a new 2013 ml350 4matic bluetec (about ~65k value) for:

0 down and $1660 a month (not including tax)

30,000 miles a year, 24 month lease.

What are your guys thoughts on this, and do you think it is a good deal or even worth it to spend this much money on this car?

Thanks

 

Let me start by saying that I don't know a thing about leases but I am sure you will hear from people that do because Mercedes leases about as much as anyone in the car business. In fact, I think something like 30 or 40 percent of their business is lease. On the surface there are two things that jump out at me: no money down and over $40,000 (with tax) to drive a car for two years. Would a $65,000 car depreciate $40,000 in two years? I don't know but I would not think so.

Your father probably could have bought that car for somewhere between $55,000 and $60,000 so you see that the difference between what he has to pay for only 24 months is not that great as compared to full ownership. The zero money down, however, is a big factor, especially if someone can make monthly payments but does not have enough funds right on hand available to make a good down payment. Credit problems, if any, might also come into play, not only on Mercedes' end but the inability to obtain financing from banks or credit unions. I don't know if this is the situation here but if it is it could explain it. Also, are there tax write offs involved because of business considerations that would lessen the blow? Did he negotiate the price of the car down just like he would if he were purchasing it? I do know that in a lease you negotiate the price of the car just like if you were buying it and then go to the lease details. With Mercedes, sometimes that is not possible if they have a special lease incentive going at the time that is authorized by the main office. In that case the terms of the lease are pretty well set and there is some but very little room to negotiate outside those terms. But if you walk in and just want to leae a car it is all fair game. It is a game the salesman plays every day whereas the rest of us play it only once every few years. Who do you think has the advantage in that game? It is like walking into the ring with Ali - you know you are going to get hurt, you just want to be prepared enough so as not to get killed.

As I said (and I could be wrong), but at first glance and without knowing all the details, it just seems to me like an excessive monthly payment.

 

What we don't know is whether or not the payment includes taxes, extended warranty, maintenance, and any other add-ons. Obviously, a very large part of the cost is the high mileage included in the lease. A two year old Mercedes with 60,000 miles will be a tough sale when returned.

 

Exactly what I was thinking, therefore the residual value must be terrible.

BTW - the OP said the payment did not include tax. I don't know what his tax rate is but for me that would be an approximate $140/month added to the payment.

 

THanks for the replies guys. A little more info:

My dad has excellent credit and we do own our business(s) so there is the potential for a tax write off.

Also
Lease WITH Tax is: around $1810 a month, the lease does not include any type of maintenance plan or the like.

What I have also noticed is that although the official lease document says 24 month lease, the dealership lets my Dad trade in his old ML350 for a new ML350 every year.

 

We had 2k down on a 58k ml 840 a month for 30 months. My dad got a 2012 s550 108k car for 18 mo lease for 1700 a month. Both of these rates are with tax included. Yeah you got ripped off.

 

Oh saw the 30k miles a years that's high. That definitely knocks it up a lot. Tax write offs will soften th blow a lot. So makes the blow easier to take.