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Decided to pull the trigger on a 2019 S63. The S63 has been my dream car for a long time so I know I will keep it for a long time. My salesman recommends lease for 48 months and purchase the car at the end. I haven't received the money factor details yet however, below is the breakdown of the lease.
2019 S63
MSRP: $167000
Discount : $7000
Down Payment: $5000
48 months lease
10k miles per year
Monthly Payment: $ 2945.
I wanted to finance the car for 84 months and pay it off sooner instead of leasing it. The dealer says the lowest interest rate available on financing AMG' is %5.99 ( MBFS) !! Not sure if I can get a better rate from my credit union or no. I wanted to share this with you before going any further. What do you think? If I can get a lower rate for finance like %3.99, does it make sense to purchase the car or should I go with the dealer offer and lease it at first? I was just curious why my dealer is trying so hard to push the lease offer instead of purchase? Thanks for sharing your opinion.
You might as well buy it. The lease payment is probably only $200 less per month. Expect to lose $100,000 within the first 3 years of your 84 month purchase. The only reason to lease it is to protect you from the dramatic loss in value, and you also can go into a new car after 40 months or so.
AMGs are not ideal to finance (lease or loan) as you are seeing. What you have been quoted would not work for me. If leasing, don't lease-to-own. However if you do, make sure you negotiate the residual/purchase price much farther south (at time of purchase post-lease, not negotiable for the lease itself) than what was quoted (though not stated above). Finally, is my math off here? To purchase at $160,000 and finance over 84 months (yikes) @ 5.99% = $2337 a month.
Goodness. You are paying too much!
You are at the end of the MY19 cycle it would be crazy to pay less than 10% off a S63. Check on $4k trunk money plus $4.5k fleet discount.
Any lease over 36 months should be a purchase... Based on your credit, your local bank/credit union should be able to give you the best rates. If you like, you can finance with MBFS and then refinance and pay-off for a lower rate.
Personally, leasing the S-Class is only valuable when switching cars often (as we do). If leasing, I'd rather pay more for a 30 months lease and then drop the car as the W223 S63 is out by late 2020. This way you are not stuck on a highly depreciating last gen. model.
Good luck!
FYI Here is some info from 8 weeks ago. Numbers tend to get better before MY20's come in.
You realize this car depreciates around 60K in the first year right. If you are looking at leases and financing why not look at a 2018. You can get a loaded up MY2018 with under 10K miles for around 100K. Just looked on autotrader and found a bunch at that price. Basically a new car with the ability to extend the warranty for another 5K or so and have the same outcome. I don't think there are major differences between the 18 and 19.
You realize this car depreciates around 60K in the first year right. If you are looking at leases and financing why not look at a 2018. You can get a loaded up MY2018 with under 10K miles for around 100K. Just looked on autotrader and found a bunch at that price. Basically a new car with the ability to extend the warranty for another 5K or so and have the same outcome. I don't think there are major differences between the 18 and 19.
Superpop
Not sure what planet you are on. You may have found the ‘18 S63 at $100k but everyone of those are Lemon Law/Buy Backs that MB bought back. I don’t think you would really advise someone that is looking at a new ‘19 to buy a car that has a branded manufactured buy back title.
The issue with the ‘18 S63 and the ‘18 E63’s have been the CEL (check engine light problem). Some of these cars the engines have been torn apart trying to find this issue (thankfully it appears the ‘19 S63 was fixed before they sent cars like mine out into the world since I have over 7300 miles on my ‘19 S63 without a single issue). I would be very hesitant on recommending an ‘18 over a ‘19 due to this issue. On the other hand, if the problem has been fixed and one does not care if they have a Lemon, one might be able to get a good deal. But with an AMG and no manufacture warranty that is risky especially with a buy back car. And you cannot extend a warranty on a buyback since I believe the buyback cancelled the initial manufacture warranty.
I am on a planet called reality where we do not light 10s of thousands of dollars on fire for the privilege of driving a new car off the lot for the first time. I agree that I would not buy a lemon or buyback car but I also found several MY18 S63 cars for around 120K with clean carfax. Even found a MY19 CPO with 12K miles for 124K. My suggestion was more around looking at lightly pre-owned for substantially less if the OP was concerned with lease and payment values. Cheers.
I am on a planet called reality where we do not light 10s of thousands of dollars on fire for the privilege of driving a new car off the lot for the first time. I agree that I would not buy a lemon or buyback car but I also found several MY18 S63 cars for around 120K with clean carfax. Even found a MY19 CPO with 12K miles for 124K. My suggestion was more around looking at lightly pre-owned for substantially less if the OP was concerned with lease and payment values. Cheers.
Yes I agree that the S63 value drops like a rock when purchased new but I just wanted to make sure the person looking to buy a new S63 does not think he/she can get a like new ‘18 for $100k like you suggested.
Just to be sure all of us on this website that own late model S Classes all burn money—it just is a matter of degree. If you did not want to burn some money we would all own the cheapest cars possible and dispose of them at the first sign of trouble.
You are right about CPO’s and huge savings I could have by buying one of those instead of brand new. I had a bad experience with a CPO AMG a few years ago. Apparently the previous owner who leased the car under his business did not follow the break-in period instructions and put lots of pressure into the engine under 1000 miles. So I decided to go with a brand new S63 AMG. I know I can use It as everyday car and keep it for a long time. I’m also aware of the huge depreciation. But as you said, we burn lots of money because we are car enthusiast!
You should be able to do better than 7K discount. Also, I would never lease for longer than 30/36 months. Purchase only if term is longer. That being said, what about a CPO 2019? Should be able to pick one up with low mileage (5-10K) for 130-140K.
Oh my, there are really smart people on this website. I agree, I'd buy the 2018 S63 and negotiate a seller down to about $110k - 115k if possible. The CEL issue is no big deal. I brought mine in 4 X for this and the last time they said there was finally a software fix and it's supposedly fixed now, a month ago. Who cares? Not me. I got a 10 year 100k warranty when I bought it new for $177 ($10k off the MRC of $188k. I knew I'd lose a lot of money in the first 3 years but I don't care. I just wanted my first new car ever and I didn't want to wait. I wanted the new steering wheel, the new look. It was worth it. I have no kids, no wife, so I could swing it. If I had kids and a wife I never would have bought a new car.
The 2018's I saw on Autotrader are a GREAT DEAL right now. Just.... wow. So much car for ... much less than new. Many of the cars had only 7000-12000 miles on them. That is new to me.
with the new body coming out and those prices... your nuts. Id def look into a few lightly used ones before pulling trigger. Ive never found leasing to benefit me.
with the new body coming out and those prices... your nuts. Id def look into a few lightly used ones before pulling trigger. Ive never found leasing to benefit me.
If you are planning to commit to holding the car for 7 years/84 months (which is what it sounds like), I'd probably recommend just purchasing it and making sure that it is in warranty for 7 years (extended warranty for 3 years -- seems like you'd be ok on miles). The lease doesn't make much sense to me at this time, but knowing the residual/MF could change that (could you ask for residual and MF and post back here -- or better yet, a lease worksheet?). Of course, you could also commit to keeping the car for 6 years/72 months on 7 year/84 month financing, and about then I imagine you'd be roughly even on the car as far as a trade-in goes (remaining loan balance likely would equal value of the car).
If you're not going to commit to owning it through to the end of that term, I would assume you are financially capable of setting aside more money every month/year to deal with the longer term, or, better yet, reliably have the money/income to simply not worry about it and deal with it if/when it becomes an issue for you. It sounds like you fall into one of these two categories from your post, where you mention paying it off early -- that's great, if this is the case. With this, it's best to be aware of and make sure you are comfortable with the true cost of owning this vehicle. If you are, awesome.
Personally, I push the financing terms as far out as I can (reasonably -- depending on interest, impact of payment, etc) when I finance cars because our business is commission based, and monthly income can vary significantly. I constantly set money aside (in consideration of the fact that I've extended the term beyond my actual intentions) and allow it to grow (typically in a manner that keeps up with the interest on the loan or grows at a higher rate -- which, of course, can be messed up for various reasons including bull markets and is never guaranteed, but usually has worked out pretty well for us over the long term since sometimes the money is in the market and other times it's in private investments, including real estate -- generally, it's a mix), but when a really bad month comes around I feel better not having to pull money out of our reserve... In a way, I am very rigid with budgeting and money, so this works very well for us.
Manufacturers can play with leases in so many ways, either to the customer's benefit or to the customer's detriment (interest rates, residual subsidization/artificial lowering -- which you could deal with at the end of your lease, and so on and so forth). Either something is happening to your detriment (artificially low residual or high interest, or both) or it depreciates like 75%-80% of the way in the first 4 years (this is a figure I have done no calculations to get other than multiply $2945 by 48 and get $141k, considering you're putting down $5k and getting $7k off, and considering what I think interest could be). If it does have a ~20% residual at the end of 4 years and you want to keep it for 6/7 years, I would still recommend just financing it and having the lower payments to invest your money elsewhere. Or keep those payments and lower the term if you won't be (reliably) investing elsewhere. Additionally, I try to avoid putting money down on a lease entirely. Another poster mentioned why already, but I thought I'd reiterate the sentiment.
This is my humble opinion... I don't mean any of this to sound like a lecture, or state the obvious, sound like a know-it-all, conceited, or anything like that, depending on who's reading. Just want to explain my thought process, what I like to do, and why.
Also, I think you should be getting more than $7k off a $167,000 car. I've never bought an S63 personally, but I don't think it's in particularly high demand (as much as I love it), and I think you should get a bit more off. I would try to shop it a bit. I live in NJ/PA/NY areas, so MB Flemington typically offers the lowest prices for me. Not sure if there's a notoriously "fair" dealer near you, but that's the one for my area.
Also, as far as getting the best rate with MBFS, I would never believe what they tell you. I was told the best rate was 4.99% for my last purchase by multiple dealers and said "ok well no thanks I can get financing for 3.69% elsewhere" and they made one phone call and guess what my new rate through MBFS was...
Also, (third "also"!) there are some times where leasing to buy can be a good option IMO -- but that mainly has to do with residual subsidization and a dealer agreeing to buy it from MBFS and sell back to you at market price (and sometimes with CPO for warranty purposes, sometimes with ELW, etc), and putting some money aside during the initial lease term to compensate for the financing term. But, it doesn't seem like you'd be benefitting from this plan, given that lease.
Last edited by cjaredscott; 07-07-2019 at 10:51 PM.
Funny but a lot of the perspective is that the buyer cant really afford the car and has to do this or that to accomodate this. If you can afford the monthly number than who cares your happy with the number and want that car.
I just read an article about how in the 70's compared to today how banks would never give the loans they do today for cars. If you were buying a $175k car you would have had to make $250k yearly with a track record of this. I recently sold a property where they had to get 3 loans and hav their grandmother live with them. I told the agent tell them not to buy the house its out of their range. Its so crazy how people live today with this fake sense of wealth and it's the banks that support it.
Today people making $75k are buying $175k cars and the banks are allowing this to happen. It puts people so out of their income range that it is ridiculous. You see younger 20 somethings feeling that every purchase they make has to be this high end piece. Look how many many Rolex were sold in the 70's compared to today. The same with MB, seeing an S class was not a daily occurrence.
I know nothing about your income level and am not trying to insult anyone here but it just would not be a concern if you liked the car and had the cash. I get stretching and playing with your cash vs tying into a car but just buy what you feel comfortable with a car is the worst investment you will ever make. Leasing for 4 years or extending payments to 80 months is just the wrong way to go unless you have a specific plan for that freed up cash.
Go look at 6 year old S classes do you think you would still want to be making a $2500 a month payment on it???
I get people love their cars but I go buy a collector car or something that doesn't depreciate like a G wagon or a used S63. E63S or even a C63 looks the same from 10' and is probably the better all around car if you can get the "S" class out of your head and would cut payments in almost a 1/3rd.
just my 2 cents!! If I cant pay cash I don't buy except real estate!
I have always subscribed to the theory that if you cannot pay cash for it or write it off, do not buy it. The only exception would be real property or a business. 170K is a ton of money to spend on a rapidly depreciating asset like a car but hey, to each his own. OK, old man rant over.
Funny but a lot of the perspective is that the buyer cant really afford the car and has to do this or that to accomodate this. If you can afford the monthly number than who cares your happy with the number and want that car.
I just read an article about how in the 70's compared to today how banks would never give the loans they do today for cars. If you were buying a $175k car you would have had to make $250k yearly with a track record of this. I recently sold a property where they had to get 3 loans and hav their grandmother live with them. I told the agent tell them not to buy the house its out of their range. Its so crazy how people live today with this fake sense of wealth and it's the banks that support it.
Today people making $75k are buying $175k cars and the banks are allowing this to happen. It puts people so out of their income range that it is ridiculous. You see younger 20 somethings feeling that every purchase they make has to be this high end piece. Look how many many Rolex were sold in the 70's compared to today. The same with MB, seeing an S class was not a daily occurrence.
I know nothing about your income level and am not trying to insult anyone here but it just would not be a concern if you liked the car and had the cash. I get stretching and playing with your cash vs tying into a car but just buy what you feel comfortable with a car is the worst investment you will ever make. Leasing for 4 years or extending payments to 80 months is just the wrong way to go unless you have a specific plan for that freed up cash.
Go look at 6 year old S classes do you think you would still want to be making a $2500 a month payment on it???
I get people love their cars but I go buy a collector car or something that doesn't depreciate like a G wagon or a used S63. E63S or even a C63 looks the same from 10' and is probably the better all around car if you can get the "S" class out of your head and would cut payments in almost a 1/3rd.
just my 2 cents!! If I cant pay cash I don't buy except real estate!
You are correct overall in saying that if you can afford the car, and are willing to pay for it, then do it or be happy. I don't think that affording it is the OP's issue. At least it doesn't seem to be. What appears to be the issue (at least how I interpreted it) is what exactly he wants (how long he plans to keep the car), and the best way to get there. If he only wants it for 4 years, then he should either A. lease for 4 years or B. finance in a manner in which he would not be underwater on the car at 4 years (e.g. 5 year financing) -- doing whichever is cheaper. Interest rates or artificially high/low residuals could make one option less costly than the other (as much as lease residuals are artificially inflated oftentimes these days, I feel like this one may be artificially low -- of course, in the event that it is in fact artificially low, he could always lease to trade and pick up the equity from his overpayment during the lease term, but there are various costs associated with this). If he wants to keep it for 5 years, or 6 years, or 7 years, then we're looking at his question of lease to buy or just buy, and how best to do that.
I personally do not agree with people living out of their means like that, but, for everybody, it depends on what is important to you. Likewise, I would never think of buying a $175k car if I only made $250k/year, unless I had significant other assets, inheritance, whatever that would allow me to afford that, or (for example) it was the one/biggest thing that brought me joy in retirement. But as I said, I don't think that affording the car is actually the OP's issue and reason for posting...
Personally, I try to avoid any money out of pocket and prolong my payments because A. I do have other plans for that cash where my gains (historically) out-weight the costs of the loan, B. it helps mentally on months where our income is abnormally low (happens about one or two months out of the year -- though we always plan around this as there are two or three months where income is abnormally high typically), and C. we understand the true costs of our cars and have the cash ready when it is time to trade in -- not just pretending that the cost of the car is our monthly payment and being SOL with an underwater loan.
People think about things in different ways, and this is just how I think about things. I love cars, and I love watches -- funny you mention Rolexs, they're my favorite -- but I love cars because I love driving and I personally drive a lot (for work and for pleasure), and I love watches for so many reasons (the complexity and nature of a mechanical watch, the way they're crafted, the elegance in how they look, the materials, etc etc). But the cost of my cars and value of my watches amount a cost that I am comfortable with as I do want to enjoy my life now and not just save and invest everything to the point that I only get to really enjoy 20 years of my life and (wouldn't this be nice) have more money than I know what to do with (I'll keep dreaming on that one)! It's a balance I like to strike, and it works for me. Ultimately, in finding this balance, those costs remain a fraction of the overall picture, and that's why I'm comfortable with it.
Again, this is just the way I think about things, and the way I run my life. And it's how I frame my advice. Everybody has their own way of doing things that works for them in their own situation. I'm big on planning everything out and having backup plans. And your conservatism is very respectable, without a doubt.
I have always subscribed to the theory that if you cannot pay cash for it or write it off, do not buy it. The only exception would be real property or a business. 170K is a ton of money to spend on a rapidly depreciating asset like a car but hey, to each his own. OK, old man rant over.
Plenty of my family members have subscribed to the same philosophy, and ultimately, it's always served them well. It's put them in a more secure position, without a doubt, and minimized their risk in life. Many of them were raised during the Great Depression and/or were hit really hard by the Great Recession, so that's influenced their mindset. Personally, I fall somewhere in the middle... I'm willing to take a bit more risk and take on the debt to invest my assets elsewhere, but I only do so in a manner as I feel as being safe -- I try to avoid the possibility of my life changing in a negative way, and the though of being late on a payment scares the life out of me. Many people probably have a lot to learn from (or at least consider in) "old man rants!" I'm sure I do, too!
Originally Posted by rediesel
1. Only lease it if you own a business and can deduct it.
2. Pay cash unless your interest rate is lower than what your investments earn you. (Then go to rule 3)
3. If financed put enough money down to never be upside down on it.
I agree with all 3 of these, but personally with #3 I think if someone is disciplined enough (but so few are) and in a financial position where they can understand and allocate for the true cost of their car, then they could be "underwater" on the loan, as long as they've specifically set funds aside for the difference between where the LTV is and to bring it down to at least 100% LTV. Personally, I conservatively invest those funds (at least in a manner I think is conservative), but historically earn higher rates than the loan. When I take more risk, it's risk I'm comfortable taking because that "upside down" amount (in a case where I do in fact take more risk) would never be great enough to cause distress but the reward could be great, and I assess risk/potential reward in a manner in which I'm comfortable. That's all relative to the risk, the amounts, our personal financial details, etc.
Now, I write that as my last 3 or so car loans have had LTVs significantly under 80% from inception, but that's for different reasons (inheriting a car that was traded in and taking advantage of the tax credit, a specific personal/business situation where making a large down payment was beneficial, etc)... On these loans, I did stretch the payments out for reasons I've written above (with such low LTVs for me these past few times I wouldn't be underwater ever, but even if that weren't the case I'm completely and fully aware of my plans for each car and the true cost under those plans, and set money aside specifically every month in consideration of that, and invest it in a profile in which I'm comfortable, so I never would be truly underwater (as far as my financial situation, not the actual loan itself) even if I didn't start at a (relatively) low LTV. I would have the funds to draw on, whether they're in cash or conservatively invested but relatively liquid. If they're more riskily invested, that's a risk I'm willing to take and I either would have the cash to deal with it elsewhere or the income to support it.).
Last edited by cjaredscott; 07-08-2019 at 04:46 PM.
Don't want to be the spoiler here but I have to say that it's really annoying to read everyones financial philosophies every time a poster is asking for anything about leases/financing. Broken record, same song...
The OP didn't ask for it and few others care. Quick sanity check is good but in the end giving the OP the best info on discounts and then tips to optimal lease or financing choices should suffice.
Don't want to be the spoiler here but I have to say that it's really annoying to read everyones financial philosophies every time a poster is asking for anything about leases/financing. Broken record, same song...
The OP didn't ask for it and few others care. Quick sanity check is good but in the end giving the OP the best info on discounts and then tips to optimal lease or financing choices should suffice.
Don't want to be the spoiler here but I have to say that it's really annoying to read everyones financial philosophies every time a poster is asking for anything about leases/financing. Broken record, same song...
The OP didn't ask for it and few others care. Quick sanity check is good but in the end giving the OP the best info on discounts and then tips to optimal lease or financing choices should suffice.
Well, feel free to ignore what I (and others) wrote if you find it annoying. I have no issue with that, and I'm sure they don't either. I like to get into it, and go in depth, especially when I think there is a possibility that a potentially non-optimal decision may be made, and that's how I explain my thought process, reasoning, etc. Like I said, if you don't like it or care to read it, feel free to ignore it.
Well, feel free to ignore what I (and others) wrote if you find it annoying. I have no issue with that, and I'm sure they don't either. I like to get into it, and go in depth, especially when I think there is a possibility that a potentially non-optimal decision may be made, and that's how I explain my thought process, reasoning, etc. Like I said, if you don't like it or care to read it, feel free to ignore it.
While not directed at you, I am glad you like to get in-depth on off-Topic discussions
The forum is full of threads with people lecturing others how they should or should not spend their money.
07-06-2019, 01:05 PM
I agree that I would not buy a lemon or buyback car but I also found several MY18 S63 cars for around 120K with clean carfax. Even found a MY19 CPO with 12K miles for 124K. My suggestion was more around looking at lightly pre-owned for substantially less if the OP was concerned with lease and payment values. Cheers.
