Steinhart

what are your thoughts on this lease

I'm considering the following:

'18 560 MSRP 122,100
negotiated price: 113,940 (includes paying 1 remaining month of my current lease of 1250)
42 months, 42% residual, 8.75 tax rate, MF .00120, after 10 MDS's reduced to .00050, 12k miles/yr
1712/month, includes tax
3731 drive off, includes 1st payment, license and registration

superpop

Not a fan of leases but that is just my opinion. You are paying 73K to drive a car for 3.5 years and will have no equity at the end. Why not buy it and have something to sell in 3-4 years. The only time a lease makes sense is if you can write it off as a business expense or if you have to have a new car every few years, which will haunt most people in the long run.

Steinhart

yes, I can write it off my business expenses

if I buy the car for 113,940, it will take at least 50% hit in depreciation after 3.5 yrs, so lets say I lose 57K. Then I also have service/maintenance expenses, sales tax, and if I get a fender bender on my carfax, the value of the car takes a major hit. Now, when I'm ready to get another car I don't like to sell on my own so I will trade it in on another car, so there is another hit. So, when it's all said and done, I don't think I save much, if anything, in purchasing it. From what I have read one must own for 7 or more years to make the numbers more favorable. Thats too long for me.

hyperion667

I bought an S with cash........drove it for 4 years.......sold it back.........ended up being about 20K per year.....4 years.........I got 45K back when I sold it back..........so yes................but why keep paying for an expensive car when it isn't expensive anymore you know?

superpop

This is precisely why I buy 2 year old off lease cars. One I just purchased was 118K new, I picked it up for 60K plus another 3K for ELW that will cover me for the time I own it. Had 17K on it when I purchased it. In my mind it is essentially a new car and in 3 years I will still get 30K or so for it so I end up spending around 10K per year or half as much for in essence the same experience. I suppose if I could write off a lease I would do it but I am not in to cars to the point I am willing to spend 20K per year on a single car, I could but it seems silly to me. YMMV.

Steinhart

In 3 years you will have a 6 year old car, with probably 50K miles if you are an average driver. These cars continue to depreciate like a rock, so my guess the car would be worth around 20-25K, you also paid sales tax when you bought, plus service/maintenance costs outside your warranty. So my guess is you will pay 50K total over the three years including depreciation. Yes, it will probably be less money than leasing, if you don't get into an accident that will put a blemish on the CarFax. However you are driving an aging car. So, given the amount you are saving, is it worth it? Not for me.

I'd like to hear if my lease numbers that I posted are competitive in today's market? Anyone?

Steinhart

anyone? thank you

Wolfman

This is a tired argument. Some like new. Some are good with used. Lease is a hedge against unknown depreciation since a larger influx of EV's over the next years will make resale values more difficult to predict. Buying a used car for less money is not a better deal. You simply bought a $60k car that will be worth half that in another 3 years.
Not saying it doesn't make sense but it's not a better deal. It's just one that works for you. To me, there is no pride to owning a quickly depreciating asset.

That said what makes the least sense to me is buying new. Have done that plenty of times and it was never pretty. I was recently offered a 2016 McLaren 650s. Stunning car with only 500 miles on it! Now that could be called new. MSRP $320k. Now $200k obo. Depreciation at $240 per mile. Now that hurts...

Wolfman

Lease rates on the S-Class hurt as MB has learned their lesson from prior years and adjusted their residuals aggressively. That is what makes the MY pricey.

While you use MSD's, your MF is too high to begin with. A few weeks ago the retail MF was 0.00109 which should be negotiated down to under .001. Then apply the MSD discount.
Not sure why you want to go to 42 months or 15k miles. Are you driving that much? You could go 36/12k at 46%. You can pull ahead 5-6 months anyway.
Last but not least, the discount is very low for a MY18. Is this a special car? For the next few months they should try to blow them out. A lot will happen within that time. Since you still have a lease payment in there there is no need to rush...

Steinhart

thanks Wolfman, I appreciate your insight

I was unsure of the starting MF, they quoted me .00120, I will try to negotiate this further
I drive 12k miles per year. The car has the options I want, including MBC, HUD, P1, D+, light color interior. Almost none currently available with these options. The ones I've found have sold upon arrival at the dealers. Hence, not much discount.
I was planning to wait until the end of the year, as I have 4 payments left, pull ahead is now 3 months. However I realized I may not find the options I want and would then be looking at MY19 cars with less leverage to negotiate.
42 months is 130/month less than 36 months. I look at what is the cost to drive the car over time. 36 m is $1560/yr more than 42 m lease. I don't really care about another 6 months lease term.

Wolfman

Steinhart

Yes, good points and much appreciated Wolfman. Thank you!

Steinhart

how much of a discount off MSRP should I expect?

Wolfman

It's based on location. I remember going to Schumacher last fall while in Scottsdale and my experience was almost comical. Virtually no inventory and when quizzing about model and discounts, the salesman told me just how may wealthy families live around there that many buy cars unseen at list prices and any desirable cars have significant ADM and sell out instantly.
Not disputing it but the guy literally wouldn't believe me that these models have normal discounts (S-Class, GLS, AMG's). Our E63s had $20k ADM there. Eventually he just said that the Mpls. dealers must be desperate with nobody living there that could afford these for list. It was funny and insulting at the same time. On top of this he was pretty clueless about the product.

Under normal circumstances, I expect a commitment of a 10% discount off MSRP for a custom-ordered car at the time of order. I will get that in writing (email) and no deposit. Don't discuss price on arrival; they will have the leverage then and you loose. It helps to shop around. Smaller dealers may want to use an allocation even at a discount to get more moving forward...

Good luck!

Steinhart

haha, I know Schumacher MB well, have purchased many vehicles from them, and yes I agree with you, there are no bargains there because too many people are willing to pay, I remember a story that the salesman told me of a client that purchased a new SL65 and literally forgot he bought it, they called him several times to come pick it up, he apologized he completely forgot, haha

well, with the dealer I'm working with, who btw is not Schumacher, after paying a lease payment on my current car, is essentially giving me a 10% discount, so it's not all that bad, and the car has everything I want, they will deliver the car to me and pick mine up, as part of the deal

I don't particularly like going through the time consuming process of negotiating back and forth, it's not a good use of time IMO, so I will probably pull the trigger on this one

many many thanks Wolfman, you are always very helpful and informative

Wolfman

Steinhart

thanks, yes, I will post a review