Single pay lease
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From: Saratoga Springs, NY
2018 S-450
Single pay lease
I've been reading a lot about it but can't find any calculators to see what the cost is. Anyone done single pay leases on a s class recently? I am mainly looking at the single pay to be able to have a big deduction this year and to save on the overall cost. Let me know what you think or if there are some other things I should consider. Thanks.
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I've been reading a lot about it but can't find any calculators to see what the cost is. Anyone done single pay leases on a s class recently? I am mainly looking at the single pay to be able to have a big deduction this year and to save on the overall cost. Let me know what you think or if there are some other things I should consider. Thanks.
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I have done single pay leases. Most recently in October 2015 for my S550 4Matic. I paid $36,297 for a 30 month / 10K mile per year lease. The MSRP with 2 year PPM came to $116,860. Excluding upfront costs the lease cost $34,400.
The IRS now requires you to amortize your usage over the life of the lease. There was a time when you were able to deduct the full payment in the year in which you acquired the car based on percent used for business purposes.
The IRS now requires you to amortize your usage over the life of the lease. There was a time when you were able to deduct the full payment in the year in which you acquired the car based on percent used for business purposes.
Last edited by dbtk; Jun 25, 2017 at 08:01 PM.
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You may be able to calculate that depending on what MF you are quoted for a traditional 30 or 36 month lease at this time, suffice it to say that with a one pay lease you pay virtually no rent financing charge.
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I believe the buy rate on MF on S550s are at 0.00095 or approximately 2.28% (vs. 0.00001 or +/- 0.024% with one pay leases). You may have to check with your MB store as some "pad" their factors to make a little money on the financing. Keep in mind that 2.28% on an S class can amount to $150 a month or $1800 a year or over $5K over a 3 year lease.
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There is a REAL MB Finance Guy who posts on the W213 forum and is willing and able to answer most any question regarding an MB purchase or lease. In addition, he is VERY polite and helpful. His handle is Mercedesfinance. Check him out.
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I have done single pay leases for my kids. From what I remember, you don't save much. I was shocked at how little. It's not like you are saving all the interest on the 2 or 3 years. If my memory is correct, it does not work like that.
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You may want to consider multiple security deposits (MSDs) which I recently did on my C450 AMG and E300 leases. I saved about $60 per month by putting 10 MSDs down which are completely refundable, including if you total the car. On an S it may be slightly more. In effect the return is about 40% on a 36 month lease. This is validated on the W213 forums with the thread from MercedesFinance. He initially did not believe me until he ran a hypothetical on the MB Finance software.
Last edited by dbtk; Jun 26, 2017 at 12:13 AM.
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So here's a question I always had about the one-pay lease (and I've done them in the past): what happens if your car is totaled? Is that money gone? The insurance company is only responsible for paying the owner (in this case the lessor) the value of the vehicle. So what happens to your one pay cash if the car is totaled in month 1 or 12 or even 24? Do you get that money back? If so, from whom? Just something I've thought about but have yet to figure out....
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If you have "equity" in your leased car, you should always exercise the option to pay off your leased car with lien release. You can then have any insurance payout sent to you directly, as you are then the legal and sole owner of the car thereby recouping any equity you have.
The only caveat here is that you need to make sure you can payoff the lease at any time and obviously have the funds to cover the lease payoff mid-lease before you receive insurance compensation.
The only caveat here is that you need to make sure you can payoff the lease at any time and obviously have the funds to cover the lease payoff mid-lease before you receive insurance compensation.
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I had the same concern re: MSDs. I was told by my MB dealer that there is gap insurance provided by MB Financial and that all security deposits will be return in the event of a total loss.
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I frankly can't understand the concept of a single pay lease. It adds a minor convenience with a potential risk (depending on how the down payment is handled) and upfront expenditure for minimal, if any savings at all.
Dealers don't like them as another revenue stream is pulled from them and if done right, a low MF is easily offset by a better deal on the package.
To me, a lease simply minimizes the risks of excessive depreciation (which is usually higher than than the lease payments, especially in a highly optioned car) and it allows to move more rapidly between cars which enables you to stay current on the latest safety tech.
On the other hand, MSD's are different and can make a difference on the monthly payments. Standard fare on BMW's I am surprised they are not more commonly used on MB's
Dealers don't like them as another revenue stream is pulled from them and if done right, a low MF is easily offset by a better deal on the package.
To me, a lease simply minimizes the risks of excessive depreciation (which is usually higher than than the lease payments, especially in a highly optioned car) and it allows to move more rapidly between cars which enables you to stay current on the latest safety tech.
On the other hand, MSD's are different and can make a difference on the monthly payments. Standard fare on BMW's I am surprised they are not more commonly used on MB's
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Single Pay leases made more sense when you were allowed to deduct the full amount of the lease in the year acquired. That said, however, my single pay lease for the S550 saved me $4,300 over the term of the lease ($4,749 without AutoPay), or about 12.5% of the total payment on the 30 month lease.
Yes, I found MSDs to be just as good and less money upfront. I have done a couple of MSD leases. In my most recent E300 lease the MSDs shaved $60 a month for a total of $2160 using MSDs of $4500. The return over the 3 year period is about 48% (14% per annum on a compounded basis).
Yes, I found MSDs to be just as good and less money upfront. I have done a couple of MSD leases. In my most recent E300 lease the MSDs shaved $60 a month for a total of $2160 using MSDs of $4500. The return over the 3 year period is about 48% (14% per annum on a compounded basis).
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From: Pennsylvania
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If you have "equity" in your leased car, you should always exercise the option to pay off your leased car with lien release. You can then have any insurance payout sent to you directly, as you are then the legal and sole owner of the car thereby recouping any equity you have.
The only caveat here is that you need to make sure you can payoff the lease at any time and obviously have the funds to cover the lease payoff mid-lease before you receive insurance compensation.
The only caveat here is that you need to make sure you can payoff the lease at any time and obviously have the funds to cover the lease payoff mid-lease before you receive insurance compensation.
I guess this is the same scenario when you buy a car (gap insurance notwithstanding), but I am comparing more so to a "regular" lease, where you'd be protected and simply move your monthly payment to a new vehicle.
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RoseyPSU, according to my local SA and MB Finance guy MBFS covers any shortfall between your insurance and the value at time of accident (totaled or otherwise). Any portion of the lease not used will be refunded to the leasee. Like any MB lease no gap insurance is required (this is similar to BMW, not sure about other brands).
On a related note, I have taken advantage of LAP incentives and have been refunded the unused months on single pay leases.
On a related note, I have taken advantage of LAP incentives and have been refunded the unused months on single pay leases.
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Just to simplify my lease savings as explained in #3 and #13: my month equates to about $1147 on my 2015 S550 4M ($117K MSRP) with single pay versus $1305 if I had taken the traditional monthly leasing option.
