SL/R230: Lease or not ???
Thread Starter
Senior Member
Joined: Oct 2002
Posts: 369
Likes: 22
From: USA
S550
Lease or not ???
Hello BenzLovers,
Do most of you lease, finance or pay cash for your high end cars. I was going to pay cash, but my salesman is offering various finance and lease options. He said that most people lease mercedes and other high end cars..Any thoughts?? Thanks
Do most of you lease, finance or pay cash for your high end cars. I was going to pay cash, but my salesman is offering various finance and lease options. He said that most people lease mercedes and other high end cars..Any thoughts?? Thanks
Senior Member
Joined: Sep 2002
Posts: 490
Likes: 0
From: New Jersey
2003 S500 4-matic, 2003 SL55
TestnDoc If u can write the car off on business or some other way a lease is the way to go. If u can afford to buy the car out right then there is no reason to lease or take out a loan because you are only getting 1-2% in the bank. Why pay 8% or more for money in a lease. Why not just buy and pocket the difference, its like leasing it to your self, definetly the way to go. Your salesman gets a commission from his dealership if you do something other than just pay cash. When ever u look to buy a car always tell them that u might lease and trade in a car, their eyes light up because its another way to make money off of u!
Banned
Joined: Mar 2002
Posts: 1,384
Likes: 1
From: House of Imports, MBZ (So. Cali.)
'06 ML500 w/Apperance pkg & '07 SL550 w/AMG pkg
I think that you need to ask yourself one question, are you planning on keeping this car for 10 to 12 yrs? If so, you should pay cash for the car, you will save money in the long term. Now, if you have any thoughts of possibly getting rid of the car before 5 yrs, I would lease. It is simple as that, my reason behind that is that your are not going to be able to buy this car, then turn around in two weeks and sell the car to make a profit. I know the market a little on the east coast & it is no where near what it is on the west coast & the market is flooded with people trying to make a quick buck off of this car. Its not going to happen, people just don't have the craving to pay crazy money for things over there. If you lease the car & in 4yrs decide to get rid out it, you will be in a better postion and will not have as much negative equity. Just my .02!!!!!
Senior Member
Joined: Aug 2002
Posts: 337
Likes: 20
From: Dallas, TX
2017 AMG C63S Coupe
I was recently in the same position over lease vs. buy. I've decided to buy.
For a $45K C 320, leasing for 36 months with 12K miles per year and $8K down was going to be in the $575/month range, as quoted by my MB dealer based on current money rates and a 62% residual. The balloon option was going to be around the same amount. See my calculation at http://briefcase.yahoo.com/bc/jasonh...e+Calculators. "Lease"
With 72 month financing at Peoplefirst.com, you can get a 5.75% interest rate loan for a new dealer purchase. With the same $8K down, the payment would be in the $650/month range. Yeah, it's $75 more per month, but after three years in this scenario, you have $5,400 equity in the car. In the lease after three years, you have nothing. See my calculation and graph at http://briefcase.yahoo.com/bc/jasonh...e+Calculators. "Finance 2"
If you can swing it, financing makes much more sense!!
For a $45K C 320, leasing for 36 months with 12K miles per year and $8K down was going to be in the $575/month range, as quoted by my MB dealer based on current money rates and a 62% residual. The balloon option was going to be around the same amount. See my calculation at http://briefcase.yahoo.com/bc/jasonh...e+Calculators. "Lease"
With 72 month financing at Peoplefirst.com, you can get a 5.75% interest rate loan for a new dealer purchase. With the same $8K down, the payment would be in the $650/month range. Yeah, it's $75 more per month, but after three years in this scenario, you have $5,400 equity in the car. In the lease after three years, you have nothing. See my calculation and graph at http://briefcase.yahoo.com/bc/jasonh...e+Calculators. "Finance 2"
If you can swing it, financing makes much more sense!!
Last edited by jhillman; Oct 19, 2002 at 12:14 AM.
MBWorld Fanatic!
Joined: Jul 2002
Posts: 2,447
Likes: 14
From: UK
SL55 AMG
If you have the money on deposit, it's earning next to nothing. If you have it invested, it's more than likely going down. If you lease, you're asking someone else to take a risk on you and you end up paying. No question, buy it outright if you can. Cash is King!
Member
Joined: Oct 2002
Posts: 131
Likes: 0
From: London, UK
sl55 2002
Hi
It totally depends on your situation.
I did a 50/50 deal, paid 50% cash MB financed the rest at 4.5% over 4 years. If I can't make more then 10% per year with the money then frankly my money isn't working...
Also isn't the tax situation in the US different? Can't you offset interest against your tax bill?
You always have the option to pay off the finance if you want to sell the car later....yea right I'm ever gone sell this car...take the keys from my cold dead fingers.
Pauld
It totally depends on your situation.
I did a 50/50 deal, paid 50% cash MB financed the rest at 4.5% over 4 years. If I can't make more then 10% per year with the money then frankly my money isn't working...
Also isn't the tax situation in the US different? Can't you offset interest against your tax bill?
You always have the option to pay off the finance if you want to sell the car later....yea right I'm ever gone sell this car...take the keys from my cold dead fingers.
Pauld
Trending Topics
Banned
Joined: Mar 2002
Posts: 1,384
Likes: 1
From: House of Imports, MBZ (So. Cali.)
'06 ML500 w/Apperance pkg & '07 SL550 w/AMG pkg
With 72 month financing at Peoplefirst.com, you can get a 5.75% interest rate loan for a new dealer purchase. With the same $8K down, the payment would be in the $650/month range. Yeah, it's $75 more per month, but after three years in this scenario, you have $5,400 equity in the car. In the lease after three years, you have nothing. See my calculation and graph at http://us.f1.yahoofs.com/users/dc928...cMxr9AB7wZsdnL
If you can swing it, financing makes much more sense!! [/B]
If you can swing it, financing makes much more sense!! [/B]
For some reason your link is not working, but I'm very curious to see how you came up with the results in your statement. I've been in the car business for a while and have purchased & leased about 7 cars. I have never ran into a situation where a person has hardly any equity, never mind $5,400, after only being half way into a standard finance. If you would please post your calculations, I'm sure everyone on this board as well as myself, would appreciate an education in how to save that much money in such a depreciating assest.
MB World Stories
The Best of Mercedes & AMG
Manual Mercedes? 6 Times Sindelfingen Let Drivers Have All The Fun
Verdad Gallardo
Mercedes SLR McLaren 722 S Is Extremely Rare Example Modified by McLaren
Verdad Gallardo
8 Classic Boxy Mercedes Designs That Have Aged Like Fine Wine
Verdad Gallardo
Flawlessly Restored Mercedes 190E Evo II Heads to Auction
Verdad Gallardo
Electric Mercedes C-Class Unveiled: 11 Things You Need to Know
Verdad Gallardo
Mercedes EQS Gets A Major Update: Everything You Need to Know
Verdad Gallardo
5 Underrated Mercedes-Benz Models That Don't Get the Love They Deserve
Verdad Gallardo
Mercedes 300D Has Pushed Well Past 1 Million Miles and It Ain't Stopping
Verdad Gallardo
10 Most Reliable Mercedes-Benz Models You Can Buy Used
Verdad Gallardo
Member
Joined: Jan 2002
Posts: 237
Likes: 1
From: MA, USA
W126 1991 350SDL
us tax rules
pauld - we can't deduct interest expenses on stuff like cars and credit cards. just our primary residence home mortgages.
many people though refinance their homes and pull out cash to buy a car or whatnot. or get a home equity line to pay for a car. deducting the interest this way is technically in violation of the spirit of the rules (and may be in violation of the law), but it happens ALL the time.
doody.
many people though refinance their homes and pull out cash to buy a car or whatnot. or get a home equity line to pay for a car. deducting the interest this way is technically in violation of the spirit of the rules (and may be in violation of the law), but it happens ALL the time.
doody.
Senior Member
Joined: Aug 2002
Posts: 337
Likes: 20
From: Dallas, TX
2017 AMG C63S Coupe
Fixed links for lease and financing spreadsheets
Referenced in the my earlier post...
See "Lease" and "Finance 2" in the following link:
http://briefcase.yahoo.com/bc/jasonh...ce+Calculators
I'd be interested to get you guys' thoughts or questions on these calculations.
See "Lease" and "Finance 2" in the following link:
http://briefcase.yahoo.com/bc/jasonh...ce+Calculators
I'd be interested to get you guys' thoughts or questions on these calculations.
Last edited by jhillman; Oct 19, 2002 at 12:16 AM.
Almost a Member!
Joined: Sep 2002
Posts: 58
Likes: 0
From: Los Angeles, CA
2002 CL600, 2003 SL500, 2001 BMW X5
us tax rules
Actually (don't quote me on this because I may be wrong) but from my own personal experience, the only kinds of cars you can write off the interest as a "Business expense" are cars or trucks that weigh over 6000 lbs because they are no longer considered luxury cars (such as the BMW X5). They are now considered heavy machinery or something to that effect. However, the high majority of cars will be under 6000 lbs...so to agree with Doody, there will be little or no tax benefits if you finance most high end mercedes. So if you're looking for tax benefits, definitely go with the leasing program.
Last edited by bruinguy; Oct 18, 2002 at 05:40 PM.
Almost a Member!
Joined: Sep 2002
Posts: 58
Likes: 0
From: Los Angeles, CA
2002 CL600, 2003 SL500, 2001 BMW X5
One more thought
I, for one, am a lover of new things...cars, houses, toys, girls etc... So paying cash for a car, unless you're really planning on keeping it, is to me almost pointless. After 2 or 3 years, I get sick of my car and want a new one anyway. Now when you're talking about classics, that's something different, but I would never take an 01 SL over an 03. So I would definitely lease. You're pretty much driving around a free car for 2 or 3 years (tax deductible), then swapping it in and getting a new one. For one, your car is under warrantee for parts and service the entire time. For another, you won't get hit hard on the resale value as you would on any used luxury car.
Super Member
Joined: Nov 2001
Posts: 894
Likes: 1
I buy my cars. I like to say "I own It" and actually mean it.
My rule is I never buy a car unless I can financially buy at least 3 of them.
Leasing is a good deal. Allows you to buy a car you otherwise couldn't afford. But at the rate the stock market is right now, cars depreciate slower than investments hah.
Plus, if you plan on doing alot of work to your car and unless you have a good shop connection that will install and 3,4,or 5 years later remove it all, you're better off buying.
My rule is I never buy a car unless I can financially buy at least 3 of them.
Leasing is a good deal. Allows you to buy a car you otherwise couldn't afford. But at the rate the stock market is right now, cars depreciate slower than investments hah.
Plus, if you plan on doing alot of work to your car and unless you have a good shop connection that will install and 3,4,or 5 years later remove it all, you're better off buying.
Newbie
Joined: Oct 2002
Posts: 24
Likes: 0
From: Kirkland, WA
S500 - 96
leasing vs. buying
There is no simple answer to this question except for the two extremes.
1) you want a new luxury car every 2-3 years and can afford it.
- Lease for all the reasons people have listed above
2) you take care of your stuff and you want to keep this car for 10 years or more, buy it out right if you can as this is the cheapest for of financing.
I bought my dream car 3 years ago this coming january, a S500.
I wanted the security of new car warranty but there was no way I could afford a new or next to new S500.
I found that you could lease used cars and in February of 2000, I winded up leasing for 3 years a S500 from -96.
We paid 52000$ (36kmiles) and the bank signed up for a residual of 38000$. As the car was starmarked I negotiated 4 years complete warranty for 1800$. ( that was a good idea given the heater core/vaporator issue (3800$) and Mercedes winded up buying brand new tires due to wheel balancing problems ).
Nothing else has gone wrong in the 3 years which I like.
My point is that when the lease is up the bank will have little choice than to sell it to me for way less than 38000$ and I stand to have saved the difference. I am hoping for 24000$ wholesale.
Anyway I am very glad I did not buy this car given the development of resale value.
If I had bought is I would also have had to finance with 8-9% as oppose to the 6.5% money factor on the lease.
To me there is no clear answer but one must look at the car in question and the time period that the ownership will be for.
In this case leasing was the best option for me even everybody I speak to say oh leasing a used car - man they will make money off of you.
You be the judge!
Jari
1) you want a new luxury car every 2-3 years and can afford it.
- Lease for all the reasons people have listed above
2) you take care of your stuff and you want to keep this car for 10 years or more, buy it out right if you can as this is the cheapest for of financing.
I bought my dream car 3 years ago this coming january, a S500.
I wanted the security of new car warranty but there was no way I could afford a new or next to new S500.
I found that you could lease used cars and in February of 2000, I winded up leasing for 3 years a S500 from -96.
We paid 52000$ (36kmiles) and the bank signed up for a residual of 38000$. As the car was starmarked I negotiated 4 years complete warranty for 1800$. ( that was a good idea given the heater core/vaporator issue (3800$) and Mercedes winded up buying brand new tires due to wheel balancing problems ).
Nothing else has gone wrong in the 3 years which I like.
My point is that when the lease is up the bank will have little choice than to sell it to me for way less than 38000$ and I stand to have saved the difference. I am hoping for 24000$ wholesale.
Anyway I am very glad I did not buy this car given the development of resale value.
If I had bought is I would also have had to finance with 8-9% as oppose to the 6.5% money factor on the lease.
To me there is no clear answer but one must look at the car in question and the time period that the ownership will be for.
In this case leasing was the best option for me even everybody I speak to say oh leasing a used car - man they will make money off of you.
You be the judge!
Jari
