It's complicated formula and you have to separate business from personal use and keep detailed records (all receipts, mileage, etc..) Commuting is considered as personal use.

Use the capitalized cost of the car as in your lease contract to determine the car's fair market value for the IRS. You have to find the inclusion amount to use from the lease (it's in a list of table in the IRS publication.) Then you figure the % of business use, etc.. You have to do a lot of calculating to determine the amount of lease payment you can deduct in relation to the use of the car.

It's not like writing off 100% of your lease payments.

It's all under IRS 510 and IRS Publication 463. Go the IRS website and download those....

 

Interesting, thanks. I'll bookmark this and bring it up to my Tax Accountant.

 

220S - Totally agree that cars are meant to be driven.
I just purchased my CPO '06 E55 and it'll be my daily driver
for as long as I have it, which should be a decade or more.

 

Are you kidding me? My CDN$125k 2005 E55 AMG Wagon is worth low $20s wholesale according to local dealer? It IS that bad after that. 80% depreciation? MB should be EMBARRASSED beyond words that the marque can't hold its value. But I doubt it is 'cause there's always a sucker out there with more money than brains.

Don't get me wrong. I love AMG. Have had an '02 S55 '05 E55 estate and '09 SL63 and have loved them all... but never will buy a new one again after hearing what people are losing on them. Buy them at 3 or 4 or 5 years, get an awesome vehicle and pay pennies on the dollar.

 

It doesn't bother me at all....cause I get to save my money for other things while getting an unbelievable car. Plus, if you have that AMG fully checked before you buy.....there's a 90% chance that you won't have to do anything to it but get the service done when it's due for a long time. I can't wait til I add the SL AMG to my collection

 

I never look at a car as a financial investment. I do budget for expenses in the future, but I don't predict what the buy back will be, or the net cost is after X years.

There's another factor here too. Depending on how you look at it, if you're modding the car the depreciation is even worse.

For me, I look at it not as a financial investment, but an investment in fun. How much am I willing to pay over-all in the course of X years in trade for the exhilaration I feel when I mash the gas pedal? Or the feeling I get every time I park the car, start to walk away and pause to stop to turn around and smile at the car. Or the pride in all the double takes I get from people when I drive to work. Or laughing hysterically when I let that modded civic try to get me to race him (cuz he never met the beast before and just doesn't know).

Or how great it is to be a part of this community of exclusive AMG owners. Sure, there are car clubs out there, and I've been a member of a few, but this feels different (better) for sure.

All these things (and more I can't think of...it's too early) have a value to them, and what that value is worth will be different for everyone. But it's something to weigh into as well. I don't understand the concept of looking 5+ years down the road at resell when buying a new car. I price out what I want to buy at the time and weigh in how much fun I'll get out of it in that time, not how much I'll get BACK after I'm done. Sure it matters, but not very much, at least not to me.

On a side note, I also don't park my car 20 spaces from everyone else. Maybe if I drove a show car, but then why would I be taking that to the store? For me, if the car is an inconvenience then it defeats the purpose.

Maybe I'm just

-D

 

Any car as a 'financial investment' is an oxymoron unless it's a genuine collectable (even then it's a gamble just like collecting and buying art work.)

Anyway I'm with you. Just drive it, maintain it so it doesn't leave you on the side of the road, and don't look back. If you have to worry about what ownership is costing you or keeping the mileage down, then you're only spoiling the pleasure of ownership.

Drive it, enjoy it, and when its life is about over then give it away to a nephew or something

 

unless u buying true collectables cars are going down in value even if u dont add milage.

Buying a car new is a massive luxury - and defo not something Ill do again. Given what I spent and what I can get for it and what the relative value can buy me it makes no sense to sell it.... so I keep it. Take my chances on repairs.

MB used to be gr8 in resale, until they dropped their standard warranty to 3 yrs (from 5) and their service costs went thru the roof... not diff to see why the cars values began falling off a cliff.

Some massive bargains can be had second hand..... SL65's for 1/4 of new value with 15k miles? come on... why buy these cars new?

 

Why would any sane person ever buy a new Benz? Even if I had unlimited funds I still love a deal. My E63 was $97k sticker. Bought it as a 1 owner lease return for $39k with 65000 on the clock. #deal!

 

+1

 

WIth Farmers I pay $723.10/6 months but there are too many factors that determine insurance policy rates:

1. Who's your insurance carrier?
2. Age?
3. How long have you been insured?
4. At what age were you licensed?
5. Driving record?
6. How many vehicles do you have under your policy?
7. Is this a commute or pleasure vehicle?
8. How many declared miles per year?
9. What's you rcomprehensive deductible?
10. What's your collision deductible?
11. Do you have a clause for OEM parts only?
12. etc.

 

In general, cars are money pits. However, if you need it to get from point A to B then it's valuable, but that's all you'd be looking for, VALUE. For me, I'm an enthusiasts (I love cars and enjoy it), so a luxury/high-end car is worth it.

As far as luxury/high-end vehicle depreciation goes, I will never ever buy brand new unless I was a multi-millionaire.

I'm looking at a pre-owned 2008 Range Rover Supercharged for my wife right now. Depending on mileage and condition, I can get one for up to 50%-60% off the original MSRP. The pristine ones are still around 30% off the original MSRP.

 

How could you have bought a CPO 06 E55? I thought CPO's still had to be under the factory warranty requirements (4yr/50k)? Was the original in-service date sometime in 2007?

 

It was out of original warranty, but went through the CPO inspection.
This gives me one year (from purchase date), or 100K total miles.

Additionally, they'll offer 2yr/120K, and 3yr/135K on CPOs,
but only at time of purchase, and it ain't cheap for AMGs.
Retail = $2,495 and $4,495 respectively, as I recall.

I sprung for the extra year for the peace of mind.
Car payments and a $5k repair at the same time
would totally ruin my day.

 

We all agree that AMG's prices fall faster than a virgin's panties on prom night. -

But, it still intrigues me that the Manheim prices stay as high as they are. I was looking an an '09 E63 locally that an indie dealer had bought at auction in Nov '10 @ $55k, 28k miles. Had it on Ebay every week through the beginning of April. The highest bid that whole time was $39k . The BIN was $57.5k and eventually lowered to $52.5k. No bites. Then in April he sold it at auction at that same $52.5k.

And, guess what, it was bought by an MB dealer in PA, who CPO'd it, and is now asking $65.8k !! Click Here

I mean, jeesh, are their heads really that far up and locked out there?
Well, the point being that dealers at auction are referring to their book values and the MMR which, IMO, don't reflect what these cars can fetch at retail.

 

I'd think that '09 was still under warranty before the CPO.

I know I paid thru the beak for a CPO vs eBay or pvt-party,
but I'd been waffling between a used AMG and a new
American muscle car w/warranty for about the same $.
CPO gave me both peace of mind, and a much nicer car.

Besides,
I've lost too much hair to sport a Mustang Mullet effectively.

 

Yes, factory warranty until Aug 2013. My local MB dealer has told me that his service dept charges the sales dept, on average, $2k to cpo a car.

There's another added expense of the ELW, which is a must for AMG's.
And for a 7yr 75k warranty it costs about $4.1k, for example.

 

It's really only a must if you don't have money in the bank. It's a gamble if you're going to ever use up all that ELW cost. But if you have fewer funds then it's peace of mind. The MBUSA accountants have that all figured out as the ELWs are profitable to sell. The wouldn't sell them otherwise.

My next door neighbor doesn't even carry comprehensive or collision insurance. The premiums are not worth it to him and he'd rather take the risk himself. Add up all the premium costs you've spent over the years with no return. It's a lot.

Bottom line is that these cars maybe seem inexpensive due to depreciation, but they aren't. And people are buying used and financing their purchase, too. That means they're paying interest on a depreciating asset. Not smart. If you buy, use spare cash only.

It's like the old used Ferrari/Aston Martin/Maserati stories. The used versions drop in their purchase price and people without the financial position to ever even consider buying a new one, flock to get into a "cheaper" version. And then the ownership costs rear their ugly head.

Cars like these are never inexpensive in the long run. If you're even slightly worried about repairs or any aspect of ownership, then maybe it's just better to wait until your situation changes. I'd rather live like a poor boy and let money in the bank build up then get immediate and short term thrills buying an expensive used car. I did that for many, many years and drove crappy cars and lived like I was homeless. But now I have enough money and assets to where I don't have to worry anymore. The reward is a new car once in a while and it doesn't hurt the pocket book. Those years of penny pinching are gone and they paid off.

 

Just like buying a nice car is a luxury, buying New is another luxury. I used to have the "only buy Used" mentality, now, if I can comfortably afford it, I'd rather buy New, every time (and wait for/research for great incentives).

Even though it's primarily peace of mind, there's something to be said about a car that only you have been responsible for, have all the stories of, etc. etc. If you're keeping for a long time, it's even more paramount, if you're getting in and out, then it doesn't really matter.

 

As far as depreciation goes on this car, I used to worry about it (because I am a cheapskate who hates losing money), but now I really do not care since I plan to keep the car for a very long time. It all came down to a few instances that changed my perspective on the car.

The first one was when I almost got rid of it to help out some family members that were in a pinch and realized that I had bought this wonderful car, and had been too nervous to put any real mileage on it for fear of losing even more than I already had. Then, faced with possibly not having it anymore, I was ticked off at myself because I had not fully enjoyed it. When that situation was fixed, I swore I would not care about depreciation, and have been driving it almost every day since then without regard to mileage.

The second part came when I looked at what I had. Having purchased an E63 that was only a couple of years old, for roughly half of the almost $100,000 sticker price when it was new, I realized that if I had been blessed enough to own such a fantastic car, I owed it to myself to enjoy it. Having saved myself the pain of losing almost $50,000 in a couple of years of depreciation, I was really sitting in the cat bird's seat. I mean, was the car 50% less fast because I had not bought it new? Nope. Was the car 50% less amazing in terms of safety for my daughter and I to ride in? Nope. Did I get 50% less compliments on the car from family, friends, and perfect strangers, because I had not bought it new? HECK NO!!

Really, buying a car like this used saves you a lot of pain in the wallet from what you would have from buying it new. So, while I am still too cheap to buy a car new and lose wads of cash those first 2 years, I am perfectly happy with the depreciation curve from year 3 on forward. Because this car is one heck of a lot of fun to own.

 

http://autos.yahoo.com/news/a-good-t...-used-car.html

"Late-model, mid-size luxury cars—a segment that includes the Mercedes E-Class and the BMW 5-Series—are worth about 6% more on average than a year ago, according to NADA."

Interesting Article. I have notice the price of E63s from 2008 and 2009 have not shifted much in the last year, which is i think is also attributable to production volume but used car prices are in a odd place right now, since cash for clunkers.

 

Personally I think the depreciation factor is a good thing...because I would have never paid what a new one goes for. I picked up a 6 year old C32 with 70K on it for just over $10k. God bless the new model snobs than don't want anything to do with the previous model year cars...

 

With the depreciation I've seen on the W211 E55 I've decided that I'm going to be the last owner of mine. Might as well get some more juice out of her and make her more fun.

 

^^^^^^^^^^


I will NEVER AGAIN, have a "Garage Queen"...you simply, just miss the whole dang reason for having a nice ride...Drive it...that is what they are meant for! Life is too short

 

Shhhh!!! These are a steal for anyone that can do the work themselves. Stop trying to ruin our cheap fun. Lol

I like to think of this as a bit of a payback to myself for all the yeas I spent learning to turn wrenches. Parts really aren't that bad outside of a couple things. E55 is the best thing for a gearhead growing a lil older since sliced bread!