metalica_23

Wow, it never ceases to amaze me what a dealership tries to pull. I guess all in the effort to make a buck...and if someone takes it, what can you do!

When I just went on Edmunds, I rang up an E55 to $95,740 and saw an invoice of $89,240 (higher than I expected but I confirmed on Yahoo autos). The $56,184 resid is right on the money for 60%. Formula=

[ $95740-$2,100 (gas guzzler) ] * 60% = $56,184

Assuming you might be able to get this for $1k under invoice, means a cap cost of $88,240. (Maybe you can get lower, I don't know).

BTW, I agree with everyone else, with a money factor of 0.00100 (2.4%) from MB Financial there is ZERO reason to put a dime down! Go put the down pmt money in a muni fund or something and come back for it later. Or, keep the money in some decent yielding brokerage account and steal from it each month to supplement your slightly higher lease pmt.

"Marking up" the MB rate is not uncommon, but if a dealer really wants to sell you the car (and you can always find one that does), they'll "unmark" up that rate.

Anyway, back to the calcs. You've now got a 27 month lease (MB usually offers a "deal" where you get to use the RV and MF at 24 month over 27 months, so I'm just going to stick to that assumption) with a purchase price of $88,240 and a final RV of $56,184.

The principal portion of that lease is:
(88,240 - 56,184) / 27 = $1,187.26

The interest portion of that lease is:
(88,240 + 56,184) * 0.00100 = $144.42

Total pmt (with ZERO cap cost reduction) is: $1,331.68 plus tax.

There shouldn't be a ton of fees, so including the first pmt, you should be able to bring a check for something under $2,500 and walk out with the car (assuming your state adds tax to the lease pmt, and doesn't assess it all at time of purchase).

Every $100 you add or take away from your purchase price will result in a $3.80 change in your pmt. So, if you can somehow get another $2k off the price I assumed (bringing it down to $86,240), your pmt would drop to ~$1,250/month. MB is going to have to throw in some pretty significant trunk money (like $7+k!) if this thing is going to get down to $999 (over 27 months).

The resids definitely have been a big downer the last few years. When I bought my '06 in Apr '06, the resid value was 69% (27 months, 10k miles)! (...and the MF was 0.00125...and they were giving $10k off sticker! Ah, them was the times!) I walked out of there paying $1102 with 5% MA state tax and zero cap cost reduction...

BTW, looking at the dealer's final offer, doesn't look horrible. I'd ask them to back out the "cap cost reduction" and give you the cash due at signing and your monthly payment. If the cash at signing (including first payment) is less than $2,500 and you have payment something south of $1,300, you are probably getting a pretty good deal. Unless people here think that you can really score these cars for $3-$6k under invoice? Maybe!!

ldangeli

How is that being robbed. Do the math.. 96K car, sell for 81k..

metalica_23

Now, I don't think that deal is a robbery, but you can't just base it on what they're selling the car for. BTW, they're NOT selling the car for 81k. If that was the case, it would mean your entire $5k up front was going to fees and the first payment! Holy crap that's a lot of fees! (in which case, you WOULD be getting robbed). Anyway, the selling price is only a piece of the equation.

The cap cost reduction, the MF, and the RV are all important factors as well. Imagine if they sold the car for 81k and then offered a 0.009 MF! If you can list what all of the pieces were, you can get a clear picture of what kind of deal the NJ dealer offered.

Basing my thoughts on just what you mentioned, I'd say there's another ~$2k of room in there. This would mean your payments would be roughly $1,225, instead of $1,300.

ldangeli

No, thats the price of the car, that is how I got my ML63. The 5k includes, taxes, title, fees, first month payment, gas tax and down payment.

LeaseCalc is a good site that gives you a pretty good idea on the monthly payment. 1299 X 27 = 35073 in payments. The rest is residual.

Mr Kram

the $81k is the net capitalized cost after the cap cost reduction.

Vic55

Exactly and what I mentioned on page 1. The car was not sold for 81k- they applicant would have to participate to get to that number with part of the 6k in drives...

The deal is great if the gross cap is 81k before drives but if the net cap is 81k with 6k in drives, its not so great.

metalica_23

The rest is residual? I'm not sure I follow. Your payment isn't just principal, it's also interest. The principal portion of your payment is the only part that brings you down to your residual, so you can't just multiply by your monthly payment. You need to break out the 1299 into interest and principal, which means that you need to know what the MF is.

Yes, the price of the car is the price of the car. If your $5k includes "down payment", then either a.) your lease was for a cap cost something lower than 81k, or b.) you paid more than 81k for the car.

Again, you can't do any real math without having ALL of the components. Let us know what the cap cost, the RV, and the MF and you can see the nitty gritty. Without that info, you're just playing guessing games as to how good a deal is...

ldangeli

The 81K is actually the sale price of the car.. The net cap cost is minus the partial down payment included in the 5k. Its the same way they did my ML. Only with the ML, there was NO money down, only taxes, title, fees, 1st months payment.

ldangeli

Um, the 5k total out of pocket, was to keep the payment "less than 13 a month" since I just bought the ML63. This would be my 10-12th lease, so I know how leasing works and what is included, excluded, during the process to figure out the "exact payment". The 5k Includes, as previously stated, tax, tags, fees, 1st month payment, etc.

ldangeli

Here are the numbers as given to me by the dealer. Some how he's got it at 1299 a month.. Costs in the lease are 3514, dp is 1486, MF is .00121, RV is 60% or 54600. Price is 91000, Cap Cost (negotiated price) is 85000.

Vic55

Yes and no- I am speaking about the OP's case. The net cap is the adjusted sale price after down. The actual sale price of his car is higher. If the sale price was 81k then his adjusted net cap would be in the higher 70's after applying the remainder of the 6k in drives. Some of the 6k goes to first payment, bank fee, and TT&L's.

Sale price and net cap are two different factors in leasing- anyone can manipulate their sale price by putting more money down hence adjusting the gross cap price. Clearly in the OP posters case based on his payment the 81k is the final price but not the sale price. Its just like any car price negotiation, a dealer may sell you a car for 30k but if you put 10 k down the effective price is 20k but thats not what the dealer sold the car for.

ldangeli

Vic, I UNDERSTAND. MSRP is MSRP, Base Cap Cost is the "Negotiated Price" in my case 85000. The Cap Cost Reduction is the remaining out of pocket 5K that would be considered the "down payment - all up front costs" in MY case Up front was 3514.00 DP was 1486.00, Making the ADJUSTED CAP COST 87028. RV is based on MSRP, Lease price is Residual minus ADJUSTED CAP COST divided by term. i.e., 1468.48. I am not sure what you are trying to say other than what I have already been saying?

Vic55

Sorry I was confused by your other post. Your first statements have clarified that and I apologize if you felt I was questioning.

But in regards to the rest of this post, I am a bit lost- you know your deal better than anyone but this is how I read it. Please forgive me if I am confusing you.

If your agreed upon sale price for the lease was 85000 and out of your 3514 DP, 1486 is up front costs (tax, title, pmt, bank fee)- the remainder of your down is 2028 dollars which should have driven your sales price down to 82972 (85000 minus 2028)? This would be your adjusted net cap cost. But you added in the 2028 to your price to get 87028 which doesnt make sense to me.

ldangeli

No, 3514 was the upfront costs, which gets added to the "negotiated" price. Then out comes the first months payment and my DP of 1486. I should have added the 1299 to the 1486 as the DP. However he did it, it was 1299 a month. Which I honestly think is still a little high. But, I don't even know if I am going to do it. I still have money down on a Mas.. Waiting until Jan. Feb. until the Production cycle. Then again, I drove a Gallardo the other day and nearly messed my pants. So, not sure what to do.

1985mb

Ldangeli, you seem to be doing a good job of confusing Metalica_23 and Vic55, who both seem to have a good handle on leasing. Now you can add me to that group altho I'm just trying to get a better understanding of the mechanics of your arrangment.

Your upfront costs are 3514, which you capitalized into your net cap cost (thereby adding to your cap cost). Why is your 1st month payment in there? So you're capitalizing that too? Which month did you start writing your lease payment checks? So the only check you wrote at drive-off was for 1486?

metalica_23

I'm not really concerned with how many leases you've done. I have plenty of friends who've leased multiple cars and have no idea how they work. Having said that, I still follow that you understand how they work.

BTW, there should be no "somehow" the dealer got $1,299. You should be able to do some very simple math to verify their calculation, especially before making such an investment...

Looking at your calcs though:

1.) You earlier said a sale price of $81k. You put in $85k into this equation.

2.) You have $3,514 added into the lease cost, making the gross cap cost $88,514. Then, you only have yourself paying $1,486 out of pocket. So, your net cap cost is $87,028, which yields the $1,372.41 pmt (+tax = $1,468.48).

If you a.) put in a price of $81,000, instead of $85,000, and b.) change Cap cost reductions to $5k (which is what you are giving them), then you get a net cap cost of $79,514.

($79,514 - $54,600) / 27 = $922.74 in depreciation
($79,514 + $54,600) * 0.00121 = $162.28 in interest

Total pmt = $1,085.02 + 7% tax = $1,160.97

If they're selling you the car for $81k, 27 month lease, 0.00121 MF, and a $1,486 DP, then your total pmt should be $1,160.97, not $1,299.

ldangeli

I am not sure about buying the E. See previous post to Vic for corrections. And no, I am not confusing anyone. Vic knows me..

You're right, I thought they said the negotiated price was 81k. And FYI, I know how leases work. When I called my sales guy back to plot the numbers into the calc program provided below, that is what he gave me as figures. The 5K was total out of pocket including 1st months payment, up front costs and a small DP to keep the payment under 1300. Like I said previously. I was exploring the option of the E. As I just bought an ML63, I am looking for a car, but like I also stated to Vic, I am looking at a few cars. To stay on topic with this post, that is the price quoted to me by my sales guy for the E. 1299 a month, 27 months, 12000 miles a year, 60% RV. If ANYONE can find a better deal, great, show me. Every MB Dealer I've spoken to has the lease right in around that price, with that or more money out of pocket. The 5K is not a DP, it is TOTAL OUT OF POCKET.

metalica_23

I actually have a call into somebody to see what the going deal is for an E63, I'll let everyone know what I find out. Is the $1,299 including or not including sales tax?

BTW, I know the 5k is total out of pocket, but that's not how you entered it into the lease calculator. If you are going to add the $3,514 of lease costs into the lease, then your DP should be entered as $5k. If you leave the added costs as $0, then you would be correct in entering $1,486 as the DP. The end result being that you should be ratcheting down your lease by $1,486, not bumping it up by $2,028 as you had done in the attached screenshot.

ldangeli

Good question, I am assuming the 1299 is without tax. Run through the program, the way it breaks down is how I entered in the numbers. The 3514 is total costs as explained by the dealer, so the difference, 1486, I entered into the "down payment" section. Which I am sure is different then the way the dealers program works. Let me know what your dealer says. I am interested in knowing the differences.

I can give you the dealers name and number and sales guy if anyone is interested in the car, have him run the numbers for you.

metalica_23

Right, I think the problem is that the dealer is assuming you are going to pay the $3,514 (which you are through the $5k), but the lease calc application rolls it into the cost of the lease. In order to back it out, you either have to make added costs $0 (and use $1,486 as your DP) or you have to just put in a "fake" down payment of $5k.

I'll definitely let people know what I find, and I can PM people the contact info if he chooses to let me (I'm sure he would). He's always beaten any deal I've found here in New England on new cars. The only catch might be that you may have to ship the car, so you'll need to include that in the equation. On my '06 E55, he saved me $5k over what any of the stealerships in Boston would give me, so it was well worth the $700 shipping charge...

1985mb

Exactly. One can write a check for 5K to cover the 35xx in upfront costs + 14xx DP..............or you can capitalize the 35xx and write a check for only the 14xx DP. Otherwise you're paying the 35xx TWICE

metalica_23

I'm heading out to the Red Sox game, but I just got some figures in. It seems dealers are willing to go 8-9k off sticker. I'll do some math to throw the figures out there in the morning...

ldangeli

I would be interested in what the numbers are. Let me know.

Mr Kram

that lease calculator is retarded. let's all get our terms straight.

residual value is based on a percentage of msrp less gas guzzler

gross cap cost is the selling price of the vehicle

net cap cost is the capitalized cost after your cap reduction (contribution, down payment, whatever you want to call it.)

money factor is a number used to calculate interest. multiply by 2400 to find out what the effective interest rate is.

metalica_23

I agree the calculator isn't the best. Having said that, 95% of leases probably don't have to consider the gas guzzler tax.

I haven't priced out a lot of '08 E63s, so I'm just using a "random" MSRP at this point.

Using:
1.) MSRP = $91,000
2.) $8k dealer discount
3.) $0 DP (just pay fees and 1st pmt at signing)
4.) 60% RV (with GG tax = $53,340)
5.) 0.00100 MF
6.) 27 months (the only part I'm not sure of, seems like MB always offers an X month RV amortized over X+3 months)

Results:
Depreciation = $29,660 / 27 = $1098.52
Interest (Rent) = (83k + 53.34k) * .001 = $136.34

Total monthly lease = $1,234.86 (sans tax)

For every $1k extra in MSRP or for every $1k in extra dealer discount, you can add/subtract $16.41 from the monthly pmt above.

BTW, my contact isn't just for an E63, or MB in general. He's excellent at digging up deals on all sorts of brand new cars (and his money comes from the dealer, not you). If anyone wants his info, just PM me.