So Cal Sam

I was talking to my Sales Associate at Fletcher Jones in Newport Beach about financing options on the 2005 SL500 that I want and he suggested the above leasing option. Does anyone know anything about it - good or bad?

Thank you.

nasdaqsam

I've never heard of multi-security deposit. Multi-term yes but.....

I would interested in hearing details.

carlosfernandez

I also did not hear anything regarding multi security deposit or whatever it is. It is something new?

acicchelli

Multiple Security Deposit:
Reduce your monthly payments by making additional security deposits at lease inception.

Basically just like putting extra money down on a lease to lower your monthly payments. This is usually not a good idea to do because in the event your car is totalled you will lose that extra money you put down.

carlosfernandez

It's like the mortgage that you could pay the monthly payment and also another amount to the principal of the loan.

ldye

MSD's are returned to you at the end of lease. I did this on every Lexus I leased. Lowers monthly payments. You have to look at what return you could get from your money vs what you saved in monthly payments. To protect yourself you can purchase gap insurance to cover difference of the value of the car vs amount owed in case of a total loss claim. Most auto insurance companies offer this coverage for less than the dealer(leasing company).
I've not leased any German cars so I'm not sure if they even offer MSD.

So Cal Sam

The last post had it correctly - you up your security deposits (multiply it hence the name) to get a lower monthly payment. The Sales Associate looked at a few different purchase options and he didn't end up presenting the MSD one. This SA is really sold on putting down the bare minimum drive off cost and paying high monthly payments so that you don't have a huge financial exposure and you're supposedly tranferring the depreciation and the hassle of dealing with an insurance company in case the car is wrecked because of the lease package gap insurance. I could drive off a $102,610 MSRP SL500 for $2600 and pay $1600 for 36 months on this lease. This is opposed to purchasing it for cash and owning it and paying the sales tax on the entire price (another reason to lease he says). I'm was hoping to negotiaate the price to $97K, pay the license and tax (approximately $106,000) and drive off into the sunset but his reasoning is sounding better to me if I can get a good residual. After leasing three years I would be out $60,200 for the drive off and 36 lease payments and then could purchase the car if I like instead of being out $106,000 today with some of the neagatives of ownership i.e. wrecks, immediate depreciation when I drive it off the lot, etc. I could use the $106K to make the monthly payments and have the balance for other things or just let it grow in some investment to purchase the car outright in three years. My dad always said save and pay cash for something like a car but maybe with something this expensive that advice is no longer the best way to go.