Hi, I've been shopping around for an E63 (love my C63 but I need more room), and found one with P2, Parktronic, rear side airbags, pano-roof, 19" twin 5-spoke wheels, sticker almost $100k. I have 18 months left on my C63 Lease (monthly payments are $1180 + tax) and the dealer will buy out my car for me. The deal I was offered was originally $5k + first payment down, 10k miles a year, 36 months, @$1458 + tax. I got him down to $1375 + tax. Is there any more room to negotiate?

Any advice would be appreciated!

 

Dont do it! That is insanely expensive.. You're not getting a good deal at all. Wait til the end of the year when the 2012 TT E63 rolls out. You can pick up a 2011 with the NA engine for a good deal. That is what i plan to do. Patience!

 

Great advice Esix, wait for the incentive money in July. I had E63 lease deals on the table last July for less than your current C63 lease payment. 4 months to go.....

 

I'm not sure you're going to see the same type of deals we saw last year. MB won't make the same mistake two years in a row an take another hit to margins b/c of overproduction/bad demand forecasts...Just my opinion tho.

 

MerPlease, I was in your situation 4 months ago. I had a 2009 911 C4S (tracked out), with 18 month left on my lease ($1500 per month); but I just couldn't take it anymore, it was just too rough of a ride for my long daily commute to my office, so I picked up a 2011 E63, I knew going in I would have to pay a lot, but patience was not a virtue, plus it was a special Designo Matte finish, so I couldn't not wait!!!
Now I'm so happy with my E63

 

MB made the same mistakes twice for me already. Once overallocation incentive on a GL550, and once on my E63. I would bet they do it again.

 

not on the same cars. I can see it happening on two different models b/c they are likely different buyers (for the most part). my opinion anyways.

 

OP is buying an E63. I cashed in a 15k over allocation incentive on an E63. That is the same car.

 

what!? no way a car like this goes for $900 per month lease around here you are getting ripped off.

 

Without big discount incentives, I don't think $900 on an E63 is too realistic, without too substantial a downpayment?

BTW, I'm still learning about the world of Leasing, but am I right in reading that you can take your car to certain Dealers, and in order to get into a new car, they may simply offer to buy out the remainder of your Lease, no extra cash out of your pocket?

 

No it doesnt not now--- the only time people got close to this number was when there was regional trunk money for 20k and then one still needed to get well back of invoice before applying the 20k.

MBCC has too low of residuals and too high of MF's to get there. Plus with a 100k sticker that raises the net cap. Of course one can get there with cap reduction but who wants to do that with a lease?

 

That is very expensive. This is why I waited a couple years and bought my barely used E63 AMG CPO. Got the car for 1/2 the price. Not sure the differences in the cars (to me) justified an extra $50K. But that's just me. My wife always buys new vehicles...to me I have to hunt for better bargains:-)

 

Agreed may be expesive but you are talking about a $100K car. I also dont think the same deals will be had this time around. I am already noticing much fewer E63s in inventory than last year (leaning me to believe the problem of over allocation has been corrected and hence no trunk money). We will see I guess.

On a side note, yea $50K difference is a lot of money but the handling of the W212 versus the W211 E63 is night and day difference as well as the transmission (not to mention the technology updates). Both great cars either way but if you can afford the payments, I would reccomend the W212 E63. I am more in love with the car after 7 months of ownership than when I initially bought it

 

LOL, you guys should come to Canada. An E63 here starts at $1,400 a month with $10,000 down and 24,000 km (15,000 miles a year). That's before taxes.

 

Wouldn't put $5K down on a lease.

Our drive-off was approx. $2,500 (first month + title/license) but we also used Multiple Security Deposits (MSD) to buy down the money factor (MF). MBF allows up to 10 MSDs which decreased our MF from the base .0024 to .0017 (each MSD takes off .00007 from the MF). IIRC, that reduced our monthly payments by over $100 per month.

Instead of putting $5K down, use that as approximately 4-5 MSDs that could reduce your MF (and consequently, the interest you'd pay over the duration of your lease). If you have more cash sitting around, put down the maximum 10 MSDs because it's a much better ROI than having it sit in a bank account (btw, just to clarify, you get back the MSDs at the end of the lease while you do NOT get back any amounts you use as cap cost reductions). =)

 

MSD's are arguable based on the actual gain versus what you could gain elsewhere. Your bank comparison was spot on because you saved about 1.68% in APR equivalent dropping your MF from .00240 to .00170 (if what you said is correct) and most banks are not paying 1.68% interest right now. But money at 1.68% is hardly a yield I would forgo investing in the market to reduce my car payments since there are many other places to invest.

 

Actually, my expected return on my MSDs is ~10%. Which is much better than just the 1.68% APR savings. =)

Not sure why you don't believe the MF info. It's generally available information and for JANUARY on the E63 it was: 36 Month – Residual 58% of MSRP – .00240 Base Rate (https://mbworld.org/forums/automotiv...ry-2011-a.html)

Anyway, the reason why MSDs are a good idea is that the return isn't on JUST the MSD amount... but rather you get the savings over the entire amount financed. On a nearly $100K car, I'm saving 1.68% on nearly $75K rather than on just the $10-15K that is put down as MSDs. (http://www.leaseguide.com/mf2400.htm)

Also, since the finance fee is lower due to the lower MF, a secondary benefit is that the tax payment is also lower.

I don't suppose there's any other investment that is GUARANTEED to return ~10%? =)

I just wish I'd learned about MSDs sooner because I definitely would've done the same with our previous leases.

Anyway, it took me a lot of research to even find out about MSDs and I figured I'd share the knowledge (and the savings!)...

 

WHAT are MSD's?! Do share your knowledge......

 

Multiple Security Deposit

 

I was just on a BMW Board, and it seems that the numbers that some people here are calling "high" for the E63, are numbers that are relatively common, or even decent on F10 550i's with M-Pack (or even without M-Pack, for that matter).

I dunno how that happens, but it seems like M-B is trying to really move their cars via super low Lease Deals, considering the price of the cars (and if you compare to about any other manufacturer with cars of equal value).

 

I didnt mean to imply your numbers were incorrect- I was referring to the MBCC MSD value adjustments. Some other lenders vary. Here is how I see it:

The MSD's do not save you on the purchase of the car- the purchase is the negotiated price and its not lowered by the MSD's. MSD's do one thing, the lower the Money Factor and MSD's are refundable at the end. Your base payment in a lease is composed of the net cap cost minus the residual divided by term. Then you add in the interest equivlent (MSD affects this range) and sales tax. What matters is how much money does it cost to lower your MF for the term and can you use this money to make more elsewhere.

MF is the interest equivalent on a lease or in your case it was .00240 base value prior to the MSD reduction- this is almost equal to 5.76% APR. A drop to .00170 is equal 4.08% or a 1.68% APR adjustment.

The MF is only applied to the Net Capitalized cost of your car plus the residual. Lets use this basic lease:

MSRP/Net cap 95k
Residual is 48% (or 95000x.48 which yields 45600)
Take the net cap of 95000 plus 45600 and you get 140600- times this by your original .00240 and your interest per payment is 337.44 and if you times it by .00170 your interest per payment is 239.02. So you save 100 dollars per month (slightly less plus sales tax on the amount for the term). Now what is the term? If its 48 months you saved 4800 dollars over the 4 years for MSD investment of how much?? So depending on the term and what it cost for MSD it could be a value.

Im not disagreeing with what value you have gained but for me, I wont put 10k (if it cost 10k) in MSD's to save 4800 over 4 years or 3600 over 3 years. Yes I get it back but I have ways to make more than 100 per month off 10k. Its all relative to how much money you have and what gambles you are willing to take. Now would I be willing to save 100 per month for 3k in MSD's-- maybe depending on the term of the lease. So again it all depends on how much the MSD's cost you IMHO.

The MSD's are not released until the lease is over and then you have to deal with wear and tear and other items. Again its a benefit for some and not for others.

 

Vic, I think we're mostly on the same page.

I completely agree that MSDs do not save you on the purchase of a car. In regards to leasing, MSDs come into play AFTER you have already negotiated the purchase price, term, residual, and money factor. So, after you get to the best deal that the dealer will accept, you can now further reduce your monthly payments via MSDs.

You are exactly right about the 1.68% APR adjustment. However, based on your calculations, if you save $4,800 per year with $10K MSDs, that's $1,200 per year on $10K which is a 12% guaranteed annual return. [EDIT: Forgot to mention that unlike the return on most other investments, you don't get taxed on this amount!] (My actual MSD amount was somewhat higher for a ~10% return). If you have better places to put your money, props to you. My point to the OP was that it'd be better to use MSDs if they were going to put $5K down as cap cost reductions anyway. =)

Wear & Tear and other items would be incurred REGARDLESS of MSDs so I don't think that needs to be considered.

As you said, it's a benefit to some and not for others and as I said in my original post...

 

Sorry to revive this extremely old thread...but after reading through this am I to understand that utilizing Multiple Security Deposits in this way is relative to buying a four year $10k CD with roughly 10% return per annum (which is realized in the monthly payment)?

 

In this particular scenario, yes.