given the example of 2026 450 on mbusa and reverse engineering the numbers, the APR is 6.84%

 

Yep, that’s probably about right, so it’s marked up. I’ll get the numbers here shortly. The rack MF for MB is usually .00268, that’s the MF they apply when there isn’t lease support for a model, and that comes out to a interest rate of 6.36

 

do you know how much they are allowed to mark up? BMW dealers are allowed up to .004 mf.

 

I don’t believe MB has a limit, I’ve at least never heard that they do.

In all the cars I have leased I have only one time paid a marked up MF, it was on a 14 Jeep Grand Cherokee, it was part of a forum group buy and the deal on the Jeep was excellent. It PAINED me, but the deal was still the best there was so I did it. When you call them on the fact that they are marking it up, often it makes them really mad which is funny. The guy who I leased the S580 from was like “we absolutely have the right to do that”, and my response was you absolutely do but I’m not paying it lol

 

FWIW:

Not from any data base, but from a Mercedes dealer, Rallye Mercedes, in response to the question of whether going to a different lease term, 36 months instead of 48 months as posted by SW20S, post #9, would result in a lower monthly payment and in particular the high money factor of .0032:


Whether you choose to believe the response from Rallye Motors, Money Factor confirmed by Helms Brothers Mercedes, or not is up to you. Both Rallye and Helms Mercedes are competing with each other and trying to make a sale. I see no reason for either of them to fabricate either the MF or the above in response to my direct question.

 

I have never paid a mark up and if I found a dealer who tried, I would never do business with them except as an exception where the price was better than anywhere else regardless of the MF as you posted above with the Jeep.

 

If you don’t know what the retail MF is from a source other than the dealer you have no idea if you haven’t paid a markup lol. Like I said I have never had a dealer quote me the retail MF on the first go. Never once. They always try and mark it up, it’s standard practice. The dealer above is inflating the MF because they are trying to make money, they let you walk because they know they can sell the car to somebody else for what they want to sell it for. Classic dealer game, offer you a 5% discount and then inflate the financing to recover that 5% and they’ve sold you a car at MSRP and you think they made you a deal.

And yea the MF is usually the same regardless of the term, what changes is the residual. MFs also vary by trim, AWD vs RWD etc.

 

that was 36, example taken from special offers on their site

 

The retail MF might be that, but that is the highest MF from MB I have ever seen so I seriously doubt it.

 

I work with leasing and lease calculators a great deal. When I used my lease calculator using .0032 for a money factor my lease payments including taxes and all fees came to $1208 vs. the dealers quote of $1203 which I think all can agree are the same numbers. see post #18.

Can you set forth the methodology you used in reverse engineering the MF to be 6.8% and not 7.68% which would be a MF of .0028 and not .0032.

Thanks in advance.

Here is a link to the lease calculator that I used: https://www.leaseguide.com/calc.htm

 

I believe that was for a 2025 model and therefore not relevant. Certainly we should all be able to agree that lease payments for one year old left overs will be low, especially when dealers are now expecting delivery and taking special orders for the model year 2026.

 

• Gross Capitalized Cost: $71,701 1
• Capitalized Cost Reduction (Down Payment): $5,509 2
• Residual Value (Purchase option price): $40,453 3
• Lease Term: 36 months 4
• Monthly Payment: $1,019 5

Step 1: Calculate the Adjusted Capitalized Cost

The adjusted capitalized cost is the net amount being financed after the down payment.

Adjusted Cap Cost=Gross Cap Cost−Cap Cost Reduction

$66,192=$71,701−$5,509
Step 2: Determine the Monthly Depreciation Cost

This is the amount of the car's value you pay for over the lease term.

Monthly Depreciation=Lease Term(Adjusted Cap Cost−Residual Value)​

$714.97=36($66,192−$40,453)​
Step 3: Find the Monthly Finance Charge

This is the interest portion of your monthly payment.

Monthly Finance Charge=Total Monthly Payment−Monthly Depreciation

$304.03=$1,019−$714.97
Step 4: Calculate the Money Factor

The money factor is calculated using the monthly finance charge.

Money Factor=(Adjusted Cap Cost+Residual Value)Monthly Finance Charge​

0.00285≈($66,192+$40,453)$304.03​
Step 5: Convert the Money Factor to APR

To get the equivalent annual percentage rate (APR), multiply the money factor by 2400.

APR=Money Factor×2400

6.84%≈0.00285×2400

 

No. I guess you and I are in different markets. The NY Metro market is highly competitive with over 20 Mercedes dealers within a 20 mile radius. Dealers cannot fool around with the MF. A simple call to a competitor will expose a mark up of the MF. Consumers here are sophisticated. When leasing everyone asks for both residuals and MF. As I posted I have never had a dealer mark up the MF. Periodically I have checked the dealer MF with MB USA. They are always the same. Nor is the dealer "willing to let me walk". I am ordering a car with delivery at a later date: The more cars a dealer sells the more slots for future orders the dealer is given. Dealers to stay in business must sell cars. They do not want to let customers walk especially by jacking up the MF. The car is not in inventory so there is no one else they can sell the car to or have bidding on the car. Here in the NY Metro area orders are common and dealer's love them: Car comes in, is prepped and out the door in a matter of days. No inventory, no floor financing - just an in and out clean sale! This is what ever dealer wants.

I get it: you cannot believe the $1203 monthly quote for 48 months, 7.5K miles per year. Frankly I was shocked at the quote. As I posted the lease payments total over $57,000 for a car with a MSRP of $76,000. You feel they are ripping me off by giving me a 5% discount and jacking up the MF to recoup the 5% discount. Not so unless all the local dealers are in collusion with each other in setting the MF - which is highly doubtful.

Suggest you employ Occam's razor: The MF factor and residual are correct. As compared to the BMW 540i, the Mercedes E450 is just plain overpriced!

As I posted above, blind loyalty to a brand can be very, very expensive!

 

I suggest you just wait until I get the retail MF and then we will know. I absolutely believe the payment, like I said it’s the worst time to lease a 2026 Mercedes, you can save $300 a month by leasing an identical 2025. The E450 is not overpriced, lease support will come and the lease payments will be more similar to the 5 Series.

I live in metro DC and we have a ton of dealers too. I have negotiated deals on cars in the NYC metro area…they try and mark up the MF. Dealers mark up the MF, they all do it. So yes when you are shopping dealers they know everybody else does it so they do it too. If you don’t have a non dealer source for the retail MFs you have no idea if you are paying a marked up MF or not.

 

I am very much confused by your methodology.

Every lease calculator I have ever used starts with:

• MSRP: the MSRP is necessary to determine the residual which is a percentage of the MSRP. I do not see the MSRP
• The next steps require the inclusion of any down payment, dealer incentive, trade in value or manufacturer's incentives. These collectively are the "Cap cost reduction"
• The next step are add ins for example the lease acquisition fee
• Then the number of months are put in.
• Then the MF

All of the above gives you a monthly lease payment. If the dealer gives you a lease payment, the residual but not the MF, you can solve for the MF by using different MF in the calculator until you hit the monthly lease payment the dealer gave,

All of this is pretty straight forward.

The problem with your method is that you have not shown how you determined the monthly lease payment. Without knowing how you arrived at the monthly payment, there is no way to verify your MF. It is like a spread sheet where wrong numbers are put in: It is mathematically correct, but wrong. To correctly solve for the MF, you must demonstrate how you arrived at the lease payment.


This rather straight forward. But the easiest way is to use a lease calculator.

Here is the one I use: Suggest you try it.

see: https://www.leaseguide.com/calc.htm

 

I just got the numbers. The retail MF for a 2026 E450 4 Matic sedan is .00285, so they are inflating the money factor.

 

Since I know you won't believe me, here it is:

 

You are beating a DEAD HORSE; What part of the MF, .0032 that several dealers have given me do you not understand????? This is the money factor, and your reference to the MF on left over year old E350 is irrelevant.

I cannot save $300 a month by leasing an identical 2025 E450: How many times do I have to post that in a 500 mile radius, there are no 2025 E450 with the Driver Assistance and with the standard wheels. The car I want, a 2025 E450 with drivers assist, heating, digital lights and Burmester sound DOES NOT EXIST!

It is easy for you to say that the money factor will come down and that Mercedes will start to support the E450 - you are not leasing the car. I am and I choose not to lose the deal of $885 on the BMW 540i in the hopes that some time in the future the price of the E450 will come down by 30%. That is wishful fantasy thinking.

As they say in the market: Hope is not a strategy.

 

Speaking of tariffs, don't forget MB absorbed all tariffs on 2025 inventory.

 

Can you give me the link to this. I want to show it to my dealer.

I am zip code 11050 but we are the same as 10001, midtown NYC.

Many,Many thanks.

 

monthly lease payment was given in the example. All the numbers I provides are given except MF. If I used the calc, nobody would've known how it's done.
Here I wrote it all out. Besides, I don't know who wrote the calculator

 

You can use that screen shot, it’s a database that I have a subscription to there’s no way to send you a link to it. Let us know what the dealer says. It’s always funny how they try and backpedal when they know you are on to them. Almost no consumers know the real retail MFs and lease terms. I have had sales managers get really mad when they are called out.

As for “hoping pricing will come down 30%” in the course of a year shopping for my S580 the lease payments came down $700, which is 30%. I promise you the payments will come down as is necessary to move the vehicle.

The point about the tariffs is a good one. We don’t yet know how MB will adapt their pricing for the tariffs, they might raise MFs to help offset it.

 

Here is what I found on the Mercedes site:


2026 E 450 4MATIC Sedan
Lease Payment$1,019/moDisclaimer[42]for 36 months. $7,323 due at lease signing
$3,000Disclaimer[35]Loyalty bonus for eligible customers only.
I'm Interested
Offer Detailsfor 2026 E 450 4MATIC Sedan

Lease Disclaimer

Available only to qualified customers through Mercedes-Benz Financial Services at participating dealers through September 2, 2025. Not everyone will qualify. Advertised 36 months lease payment based on MSRP of $73,550 less the suggested dealer contribution of $1,849 resulting in a total gross capitalized cost of $71,701. Dealer sets the final price and Dealer’s contribution may vary and could affect your actual lease payment. Includes Destination Charge. Excludes title, taxes, registration, license fees, insurance, dealer prep and additional options. Total monthly payments equal $36,684. Cash due at signing includes $5,509 capitalized cost reduction, $795 acquisition fee and first month’s lease payment of $1,019. Your acquisition fee may vary by dealership. The acquisition fee charged by the dealer may affect the total cash due at signing. No security deposit required. Total payments equal $42,988. At lease end, lessee pays for any amounts due under the lease, any official fees and taxes related to the scheduled termination, excess wear and use plus $0.25/mile over 30,000 miles, and vehicle turn-in fee. Purchase option at lease end for $40,453 plus taxes (and any other fees and charges due under the applicable lease agreement) in example shown. Subject to credit approval. Specific vehicles are subject to availability and may have to be ordered. See participating dealer for details. Not valid in Puerto Rico. Please always wear your seat belt, drive safely and obey speed limits.

Special lease rates may not be reflected in lease calculator prices shown on MBUSA.com. Please see your dealer for final pricing.

This is completely different that what you posted.

Can you please send me the link.

Thanks.

 

it's still 27% by the way, not 15%. Need to make it up somehow.

 

this is what I had used in my calc