BluetecKING

Money is not an issue if I wanted I could be driving a Rolls but I want a new car every 3 years so the S class seems like a good idea. Although, I might wait for the S500 Plug In but I am not sure. It is not like I am strapped for cash in any way.

jenz

I think you're having a reading comprehension issue, my post mentioned nothing about your ability to afford, type of car, etc

Benzfooled

7% discount looks like the standard opening dealer quote and I think they could be negotiated down more without much effort.. My local dealer says they give larger discounts on the luxury versions as they are less in demand. But focusing on a discount from MSRP alone on a lease seems like the key factors are being overlooked.

ajm0623

after looking at some of the responses on this thread, i think it is time for a little leasing 101. you'll see here lots of pockets of money for the dealer to make on you in addition to just the msrp negotiation. i'm not an expert - by any means - at this so if I have erred on any of this - please provide corrections. no pride in authorship here, fellas. a few things to know first:
1> every state is different on how they treat leases so you may need to see how your state works with respect to taxation and the lease components as well as when amounts are due.
2> taxes with respect to trade-ins are handled differently by each state as well.
3> i am not a dealer and what i have written here is based on my research and leasing experience.

basic lease components (and what is negotiable and what is not)
a. msrp/agreed-upon price – negotiable. additional dealer profit here.
b. administration fees (plate, title, registration, documentation, e-file) – usually not negotiable.
c. lease acquisition fee – base mbfs fee of $795 can be marked up by the dealer to $1,095. additional dealer profit here.
d. upcharge sell-on products (tyre and wheel warranty, maintenance, dent protection, ext/int protection packages, etc) – negotiable. additional dealer profit here.
e. trade-in value (if applicable) – negotiable. additional dealer profit here.
f. security deposit (if applicable) – negotiable. refundable to you at the end of the lease.
g. residual factor – not negotiable – set by mbfs every month based on term (24mos, 30mos, 36mos, 39mos, 42mos, 48mos, 60mos) and per-year mileage (7,500, 10,000, 12,000, 15000, etc)
h. money factor (interest rate expressed as a factor of 2400) – negotiable and set by mbfs based on your credit score, history, risk. changes (but not necessarily) every month. base rate or ("buy" rate) available to "tier one" customers (best credit history) is usually marked up. those with less than perfect credit will receive a higher money factor that can also be marked up. additional dealer profit here.
i. sales tax – not negotiable.
j. over mileage charge. negotiable. you only pay this per mile charge if you exceed the maximum amount allowed by lease contract. usually $.25 per mile.
k. lease disposition fee. base mbfs fee of $595. never have seen it marked up.

as a working example (won't be entirely correct as we still don't have exact numbers), let's use bluetecking's values that he has supplied thus far. this will demonstrate how all this works even if the values aren't spot on given the lack of authentic values from him.
a. msrp: 122,185 and agreed-upon price: 113,632 (msrp less 7%)
b. administration fees: 400 (estimated – assumes all taxable and residualized as part of the lease instead of being all paid up front)
c. lease acquisition fee: 795 (assumes residualized as part of the lease instead of being paid up front)
d. up-charge sell-on products: 0
e. trade-in value: 0
f. security deposit: 0
g. residual factor: 58% (BIG assumption as we don't have the actual number yet. assumes 3yr term and 10,000 miles per year)
h. money factor: .0013 (assumes base ("buy") rate given good credit and no markup by the dealer); this translates to 3.12% (.0013 X 2400)
i. sales tax: 8% (is this correct for new york city?)

CAPITALIZED COST: 114,827 (agreed-upon price plus fees and acquisition cost)

RESIDUAL VALUE: 70,867 (msrp X residual value percentage – 58%)

DEPRECIATION MONTHLY FEE: 1,221.11 (cap cost 114,827- residual value 70,867=43,960/lease period 36mos)

FINANCE MONTHLY FEE: 241.40 (cap cost 114,827+residual value 70,867=185,694 X money factor .0013)

TAXES MONTHLY FEE: 117.00 (depreciation fee 1,221.11 + finance fee 241.40 = 1,462.51 X ny tax 8%)

TOTAL MONTHLY LEASE PAYMENT: 1,579.51 (sum of all three components above)

TOTAL COST OF LEASE: $57,457.39 (36 payments of 1,579.51 + 595 lease disposition fee)

any thoughts?

Wolfman

Looks good, Ajm0623.
Price can be negotiated down to the desired amount and the dealer will try to add to the MF rate. But it should be close to that. Is 58% the residual for 36 months? If so, that is pretty sweet.

Thought: I wouldn't overlook the 30 month lease rates from MB; they are typically the sweet spot (more or less the same as the 36 months one). Dealers like that one too as they can get you into another car sooner. With lease forgiveness, they can shorten the lease even more so that you could switch cars in just over two years while paying the lower 3 year rate...

ajm0623

thanks, wolfman. as to the residual value - I DONT KNOW - as i said above that was a big assumption on my part as i am still waiting on someone to tell me the real number is for the month; it's probably too high. but my calculation was just for illustrative purposes only. if i could get real numbers, i can calculate what the best deal would look like.

and agreed on the 30mos deal. mbfs runs special rates now and then to get a buyer into a 30mos or sometimes a 24mos lease. and with the pull-ahead programmes that exist now and then, you can be in a new car every 20mos or so. dealers love that!

ajm0623

ok fellas - i did a little more research on my own as to what the mbfs lease rate for jan 2015 would be on the s-class for a 36mos term and 10,000mil per year and it is 48%. so i have redone the calcs as per below. this is good as you can now see how each component matters in the lease calculation and its impact on the total cost of the lease transaction.

CAPITALIZED COST: 114,827 (agreed-upon price plus fees and acquisition cost)

RESIDUAL VALUE: 58,649 (msrp X residual value percentage – 48%)

DEPRECIATION MONTHLY FEE: 1,560.50 (cap cost 114,827- residual value 58,649=56,178/lease period 36mos)

FINANCE MONTHLY FEE: 225.52 (cap cost 114,827+residual value 58,649=173,476 X money factor .0013)

TAXES MONTHLY FEE: 142.88 (depreciation fee 1,560.50 + finance fee 225.52 = 1,786.02 X ny tax 8%)

TOTAL MONTHLY LEASE PAYMENT: 1,928.90 (sum of all three components above)

TOTAL COST OF LEASE: $70,035.41 (36 payments of 1,928.90 + 595 lease disposition fee)

bluetecking - if you want me to show you the payment with the 20,000 cap cost reduction that you said you might put down - let me know.

BluetecKING

I think im gonna try to negotiate the lease price down to 108 or 105 and go from there because 2k a month is too much but 1600 is on the money. I do prefer something closer to 1400 though.

MTrauman

Good luck on that!


Taking a $122k MSRP purchase price to 108 would have been best in December when dealers had the $4000 MB incentive. Not sure if that still exists but I doubt it. Remember that with your 7% discount you initially mentioned, you are already at invoice price. You might get a dealer to "dig" into their holdbacks but you may be swimming upstream on this one.


The other way to lower your monthly cost is to simply purchase the car and keep it for around five to six years. You will get your "true operating cost" of depreciation and interest cost closer to where you are comfortable instead of leasing for three years.


Just my 2 cents.

Streamliner

Were you ever in the military, even a state national guard? If so, you can join USAA. They are currently offering a $4,500.00 certificate on a new S Class. It costs nothing to join, but it is only open to those who served in the military. I joined USAA just to get the certificate, which I used in December. Now, for my wife's new E350, since it is another calendar year, we can get a certificate for $3,500.00 off of her new car. It really is something worthwhile for any Vet looking to buy or lease a new car.

BluetecKING

Sorry no just corporate discount for my area i can try inputting other zip codes and see if that works.

ajm0623

if you put down $18,000 (of the $20,000 you mentioned upthread) as a cap cost reduction, you could drive the payment down to about $1,400/mo. i don't advocate that move for the reasons stated in this thread but that is one way to keep the existing deal you have now that i modeled above and still get to $1,400/mo. the oveall cost of ownership only drops by about $1,500 with the cap cost reduction and you're effectively tying up $18,000 in cash flow that could otherwise be deployed in investments earning more than the buy rate of 3% (no tax effect consideration) interest you are paying on the lease. but this is not finance class so i will stop here.

openwyder

I'm negotiating for purchase, and now at 9% off MSRP of 122,800.

As a PenFed member, I'm able to print a $3,500 certificate for S550 thru their website.

Is 9% good deal at this time? Dealer won't budge for more.
Would it help if I present the certificate, maybe for additional 1% off?

BluetecKING

Worth a try.

BluetecKING

I agree I don't think I will be putting that much down