PaulRobertson

Can anyone tell me if there is a program or app out there that will give the dollars spent, for a given time period, for a lease vs purchase of a vehicle.

ajm0623

sure. there are a lot of them. have been for years. just google it, chief. or do the calcs by hand like i do - the old fashioned way!

Steinhart

http://www.cars.com/go/advice/financ...nLeaseCalc.jsp

zukiper

Leasing the S550 thru MB - the interest % is very high. What they call MONEY FACTOR
For Dallas TX - they rate was going to be 7%

I ended up "purchasing" using my credit union, with rate of 1.25% - spread out over 60 months.

If after 3 years - I decide to get another S550, I will sell my current model and probably do the same thing again, unless MB have lowered their rate.

PaulRobertson

Thanks Zukiper, I too decided to purchase.

docsout

Since 1976, I too have purchased. Typical purchase is 100-120. After 7-8 yrs, trade in for 20-25K. I've often toyed with idea of leasing. Never came close to doing it, yet. I don't know. Might try it with refresh of 17-18. Comments pro and con welcomed.

WEBSRFR

If you own a small business leasing could really make sense if you use the vehicle for business purposes. By leasing you can essentially write off the entire depreciation of the car.

dbtk

Ouch! My MF (money factor) was .00001, however that was for a single pay 30 month lease in October 2015. Mercedes-Benz Finance either had significantly higher MFs when you were getting your S550 or the dealer was padding your MF in a big way at that time.

WEBSRFR

If you prepaid, the money actor should essentially be zero; right? Because in that case you are really not borrowing any money to pay down the depreciation with the monthly lease payments...

jenz

Finance office always wants their cut

dbtk

True, however, MB Finance is still loaning you the residual value amount...approximately $100K at the start of the lease and $67K at lease termination.

AustinGuy

How do you calc. the depreciation for each year? Eg. when you lease, there is the sale price and the residual. If you subtract the 2 you get the deprec. right? So is that that number you write off in the first year you file taxes? What do you write off the 2nd and 3rd... years?

MTrauman

Writing off essentially the entire depreciation can only be accomplished if you use the vehicle 100% for business in a lease. Assuming one is a cash basis taxpayer, you use the monthly payment times your business use percentage. There might be a small amount of "included income" on a lease based on IRS tables--ask your accountant/tax lawyer about this.

You can ultimately write off the "depreciation" if you purchase the vehicle. It is actually not all depreciation but considered a sale of property loss when sold but accomplishes the same thing. Ultimately this is true when you finally sell the vehicle outright since if you trade the vehicle in it is considered a like kind exchange and the basis is carried forward to the new vehicle and will not be able to capture the loss until outright sale. Speak to your tax accountant/tax lawyer.

AustinGuy

1 pay lease. Is this viable? Does it make sense? What are the drawbacks?

Just as an FYI: I'm very averse to leasing but in the case of the S550.... I'm really in a dilemma bec. of depreciation/cost of ownership, etc..... What will I be stuck with at the end of 4 or 5 years if I bought.... how sexy would the car be, etc.?

WEBSRFR

Huge, Huge drawback.

If you total the car you are essentially screwed from what I understand though I could be wrong about this. The insurance company will write a check to whoever owns the lien for the lease car and good luck trying to get what you prepaid from the lease company.

When you lease, always best to pay as little down as possible.

WEBSRFR

That's why I said "if you use the car for business purposes." Even if you use the car 80% for business the lease deduction is huge as they limit big time how much you can depreciate a "luxury car" and their definition of a luxury car is very low. The lease deduction is even more attractive if you drive very few miles so you can't really come up with a large enough number by doing a mileage deduction.

Another option is what they call a "TRAC Lease." It's like a lease on steroids and can be used as a financial instrument to basically structure a loan as a lease so you can deduct the lease payments. The benefit then is you can accelerate the depreciation by assuming a 30% residual in 3 years. If anyone is unfamiliar with this look it up as it is a great way to buy a premium car and receive a nice deduction given the car is mostly used for business purposes. At the end of the lease period you get to then buy the car out for very little.