hyperion667

wow you have your own CPA? I imagine a CPA waiting in it's box or cage, patiently waiting for a task
oh damn!!! where did I put my CPA!!!!! has anyone seen my CPA laying around anywhere?


I don't have 'my own' anything.......well, except for my wife......
I use doctors, I use lawyers, I use plumbers: doesn't mean they're mine




disclaimer: this is only intended for a laugh and is meant to cause no real harm as it's a bit in progress

MTrauman

Very interesting about the money factor. They just don't want you to lease or they think you will lease and make a "boat load" of money off of you on the lease financing. This can be negotiated but they are not willing to negotiate so if I was in your position I would take the 1.9% financing.


If you look at MBUSA's website, they are running lease specials on the 2014 S Class. Since I am a numbers guy, I backed into the money factor they are using on the 2014 S Class for MB Financial's "special". It equates to very close to the 1.9% rate. So one can get a money factor rate on a 2014 S Class at close to your offered finance rate.


Looks like you will get a great financing rate at 1.9%.

Wolfman

I think your math is wrong on the lease special. The SL money factor is close to that rate. If you look at the MSRP of the S versus SL and then look at the monthly rates, there is a dramatic difference.

Wolfman

MB lease maybe the only game in town, but not a dealer. I would call some larger dealers in CA with lots of S-classes in stock (14&15 models) and quiz them on the most aggressive lease rate. If you get a discounted rate, use that to talk to the dealer.

Unfortunately MB always has had very bad lease rates on S-class. That was the same on the W221 when they came out. This will change in time.

Financing will work of course but keep in mind that depreciation changes as well and you might end up getting less than you think.

MTrauman

Well my math could be wrong. However, I am using finance company software that calculates lease payments so I doubt it. It is not wise to compare other models money factors especially when there are specials advertised.


I am using information directly from MBUSA's website. That is a Cap. Cost of $98755, Residual Value of $51,676, and a monthly payment of $1399 excluding taxes.

ajm0623

the sl550 base rate for those with super-duper credit is 2.74% (mf of .00114) and dealer can markup from there. i realise this is the s-forum but because the sl was mentioned upthread i thought i would tell you what i know w/r/t the sl lease interest rate/money factor.

MTrauman

Great info!


It looks like (just playing with numbers and lease software) that the 2014 S Class lease interest rate could be negotiated to somewhere between 1.9% and 3.5%. Remember, I am talking about 2014 S Class cars and not 2015 S Class cars.


Until one goes and negotiates the deal with cap cost, cap cost reduction, down payments, money factors, etc it is hard to pin down. Even the MBUSA website lists a negotiated price of $2570 below the MSRP. I think you should be able to negotiate a price lower then that. Bottom line is that Dr. Bob's rate could be significantly below his quoted 5.42% lease rate. It looks like he will be better off with financing at 1.9% since it is unlikely that MB Financial would match this in their money factor rates especially on a 2015 S Class. In fact, the dealer told Dr. Bob it is either 1.9% financing or the money factor that equates to 5.42% So that dealer was not willing to negotiate on the 2015 S Class money factor for a lease.

ajm0623

using the mbusa website 2014 s550 4matic disclosures for lease specials, i calculated the base rate to be ~ 3.5% (money factor of .00146). as follows (show your work! hahaha)

msrp 101,325
agreed upon value 98,755 (reflects suggested dealer contribution)
capcost reduction 4,400
net capcost = 94355
residual - 51% or 51,676
payment = 1,399

then, i the backed into the base rate of 3.5% using the above website disclosures.

and here is the calculation or proof, i guess.

depn charge = 94,355-51,676= 42,679 / 36 mos = 1,185.53
rent (int) charge 94,355+51,676= 146,031 * .00146 = 213.21

total payment = 1,185.53 + 213.21 = 1,398.73 or 1,399 rounded up

i think that is right. somebody please check my work.

of course, this is just the base monthly payment and does not does not include all the bs fees and taxes. but it was a way for me to help this group understand what the base interest rate (for top tier credit customers) is as imputed from the details in the website disclosures. then using this calculated 3.5%, the buyer can decide the quality of deal s/he is getting. devil is in the details. and so is a fair deal for both parties.

MTrauman

CORRECT! Perfect on the numbers.

ajm0623

yay!

Wolfman

Just saw that MB had dropped by monthly special by $100 a month. At least rates are improving

rusty104

Ratings

Comedy: Hmmmm

Female photos: A+

ajm0623

and penguin slapstick comedy: a+

schuk

Can I lease Mercedes through another bank? Or MBF is the only game in town? What is a residual on on S500 4-Matic on 36 and 42 month?

theboogers

We always bought most of our cars used and paid cash. Except for a 03 sl55 with only 35 k miles on it still that was bought new.
Then we decided to lease a s350 in 2012.
The 2012 s350 was fully loaded at 1320.00 a month and now has 20 k miles on it and due to turn in at lease end in august. I think i am going to extend the lease another 2 plus 4 months and wait to see if the rates change and also see if they are coming out with another diesel s class. The car has a buy out of about 70 k plus and they are only bringing 45-48k at wholesale auction. Looks like mercedes is eating the extra depreciation.
Anyhow i appreciate everyone sharing there rates. If i am making 9 % on my investments then i still am looking at leasing instead of buying.

brabus benz

Mbusa does not allow room to negotiate the MF, it is what they offer for that car period. The MF does go up and down so they might be offering a good MF a given time, but this is not negotiated in the part of the buyer. Also know that when they offer a great MF, they will screw us on the depreciation. If anyone has ever been able to negotiate their MF, it's because your dealer was screwing you to begin with, as they were marking up the MF upfront.

brabus benz

The worst option for a $100k+ above all is purchasing with cash when they are offering a 1.9%. You are FORCED to take the financing at that rate. Finance 100% of the cost of the car plus the taxes and licensing. It's one thing to be principled and not want to owe, but it's another to just be stupid with your money. It's an even better proposition if the car is expensed as a business car, since interest expense is deductible. Your interest rate will be a hair over 1% after tax. After inflation you're making money. Now factor in liquidity premium (you're getting paid to have an $100k+ available to you) and opportunity cost of being able to invest that cash and why would one not finance if eligible. With automated bill pay there's even no loss of convenience with having to mail a check every month. Why turn down free money?

brabus benz

Financially this is the correct move to make if you have the cash to eat the cost of a loss. But no one including myself has the ***** to ever do this. I've never even heard of anyone not having comprehensive insurance on a new mb.

DaveVY

Everyone has different values when it comes to life and money.

For some, myself included, I will pay cash for a car. I understand the logic of what you said but I still don't want to owe a debt, even if I have the cash set aside to pay it. I have seen financial markets crumble and investments lose large percentages, I have seen (and experienced) financial accounts being frozen for close to a year when a financial institution went under. Yes, these things are rare, but I choose to not have to deal with that stress. It isn't stupid, it is my choice to protect myself.

AppleFan1

That makes two of us! I just despise the idea of owing money to anyone.

schuk

Very well laid out! Even if I had large liquid cash I would never freeze my assets on a 100K car. By the time my 4 year lease is over I would double my money. And someone is just driving a 4 year old paid off 40K car.

MTrauman

This is very interesting since these are the types of conversations I have had (and continue to have) over the past 25 years with my clients as a financial planner/investment advisor/CPA/JD. As someone with a law degree and financial background I can "spin" this either direction but here is the bottom line:


The rationally inclined person will look at low interest rates such as the financing I did on my 2014 S550 4Matic for 60 months at 1.94% and say I can confidently earn more then that on my invested money and borrow money to buy a car. Since my firm and I have billions of dollars invested for clients and for myself I feel extremely confident I will earn more then 1.94% on my investments.


The emotionally inclined person will say "I don't want to owe anyone anything--I will just pay cash".


Neither is right or wrong. It just depends on how you view things. I think of one of my clients that is worth about $30 million in net worth. He initially had a mortgage on his million dollar house here in Pittsburgh knowing I can invest his monies and earn a decent spread above his mortgage rate after considering the mortgage interest deduction. Ultimately he just did not want a mortgage no matter what the financial leverage was with the interest spread of what he was earning vs. what he was paying out. With that said, he purchased a second and a third real estate property in FL for about $3 million a piece without the financial leverage. This client went from the rational to the emotional. But he is not right or wrong. He just did not want to pay mortgage interest expense. Even I did not finance all of my 2014 S550 4matic. I financed $85,000 of the $120,000 purchase price--the rational side of me should have financed all the $120,000 at 1.94% while the emotional side of me should have paid cash. Like most of us humans we have a rational side and an emotional side and we constantly move between them.


Now all that I need is a degree to be a shrink/psychiatrist to counsel them--oh that's right I am a "money shrink"! I should have had a psychiatrist degree while counseling a former Doctor client that is serving a federal prison sentence for insurance fraud for stealing money from Medicaid and 20 other insurance companies claiming he had multiple personality disorder. That defense did not work however.

schuk

May be one day when I have $30 mil's in my bank I won't be worried too much about dropping 3 large on a condo in Miami and not making up on difference between mortgage and investment rate. But until then I don't have the luxury of taking my emotions over and will have to go by rationale.

AppleFan1

That's and outstanding post Trauman. Man, we have some incredibly intelligent people on this forum.

brabus benz

Trauman, that's my point exactly. People are letting emotion overtake logic when they forgo financing at 1.9% simply out of principle. But when it comes to money, emotion should never supersede cold hard logic. That is just a fact. Hell, even zuckerberg has a mortgage.

A person should not be turning down free no hassle money just out of sheer emotion. If one does not have an investment vehicle that is currently returning more than 1.9% then that person has no business buying a $100k car.