Hi guys, so I've finally completed my long treacherous journey of becoming a physician after spending the majority of my youth with my head in a book, saving money and swimming up to my neck in student loans. It's finally time for me to enjoy life and I've decided the first step will be to jump into an E63S.

I had a few questions as to how to go about this... First off I want to lease the car. Second, should I consider Euro-delivery or have prices come down since it's release to be able to purchase at a local dealer and wind up with a similar price?

Ive also read there's a significant discount being a member of the AMA (it's finally useful for something!) should I wait until a deal is worked out and then have that applied?

Any idea on what I should be paying monthly for a 3yr lease?

Thank you guys in advance and I look forward to becoming a solid/regular visitor to these forums (I've previously been on e46fanatics and g37forums)

 

congrats on finishing school, i've been done for awhile now and it's nice to not worry about $$$ anymore.

i wouldn't recommend a lease, better to finance and then sell in 3 years if you really have to.

best of luck. i'm in the market now for a S212S(always wanted an AWD wagon with power but there wasn't anything ever available in north america) having come from a couple RS4's, E92M3, and now a TTRS.

cheers!

 

Congrats on being done. The AMA increased discount is $4000 right now, up from $2500. I don't think it is going to last long. I think it expires at the end of the year but who knows if they will continue it in 2014. Only time will know. Negotiate your deal and then apply/tell them about AMA. It should not change the deal as the discount is added to what ever you negotiate. Call several dealers after you know what you want. I got $2k over invoice with little hassle and then added the $4k AMA discount. I know a few people have gotten $1k over so good deals are doable.

Lease rates for the car are poor so unless you are writing it off pretax through your practice (I could not) I would suggest financing. I got 1.79% from BoA.

Good luck
X

 

The advantage of leasing would be the ability to deduct from income tax if you are incorporated ( i dont know in the us but in Quebec physicians can incorporate themselves). That is why i will lease but otherwise buying is probably better since rates are better... I'm still maybe considering buying when the car will arrive!

Anyways welcome to AMG world. It's like sex, once you start, you cant stop... This will be my second AMG and I see a long future of AMG cars in my garage!

 

Yes you can deduct from your income but only if the vehicle is part of your business. Driving to and from work does not qualify as it is considered a personal vehicle in that case. Also, you can only deduct the amount actually used for business reasons. Ie ., need to keep logs of driving km and where you drove to and from. Be careful, if you ever get audited and your vehicle is not deemed necessary for your profession then you are not going to be a happy camper.
http://business.financialpost.com/2013/02/19/get-the-most-out-of-tax-deductions-for-car-expenses/

 

Well done. Heck you are not doing too bad already with a G37. When I finished my training, I was still driving a Nissan that was a decade and a half old. I have also read in an article not too long ago that the days of buying the biggest house and baddest car post residency is over for new physicians...and sadly that's mostly true. And if you're in the US, the ABMS will make sure you will never be able to fully enjoy life by constantly tapping into your money and time for unnecessary recert and hoax. But no worry, it's still a good choice to hop into an E63s when everything is in order.

It sounds like you have read that thread about all those discounts. I think the other posters so far have also summed up everything nicely. Wow, you might really want consider financing especially with that 1.79% gotten by "335X-ray." That's the lowest I have heard. Of course, leasing has the least headache especially if you like to hop from car to car in a short amount of time.

 

Leasing isnt the cheapest option, but its the most hassle free and eliminates liability. When you look at even best case scenarios of buying/selling <3yrs, leasing is even or is marginally more expensive which is worth it IMO (no hassle of selling car, no risk of an accidents hit to depreciation/resale ability, can still trade in early if you want, etc).

Also, I believe there is $4k trunk money/dealer incentive for all e-class, including AMG's in December, isnt that correct?

 

Lots of docs in here.
Paper is cheap, but MB and BMW support leases with strong residuals. Perhaps unrealistic in our favor, but works for me. Always have risk of resale market tanking, and dealer lowball. Said as someone who has paid cash for everything for a long time.
Money factor is higher than interest, 4.4 %(.00185 x 24) vs. 1.5% on loan. However, you're only financing part of car you use, ergo 43% (57% resid on 10k/yr x 36mo) with no resale/trade BS. So really only a few hundred difference. If you can't make 4% in this market, you're doing it wrong. Take down payment, put in in 7-8+% div yield, and pay finance costs.
Just like government, use OPM (other people's money).

 

Interest rate applies to the entire purchase price with both leasing and a traditional loan. As I wrote in another thread here... those that lease are paying $7-$8K ++ in additional finance charges over a three year period. Then factor in the lease inception fee$ and lease dispo fee$, and you really have to do your homework on whether it makes sense. Tax consequences. Ease of disposition. Etc. Etc.


Please be careful when leasing. It's not the automatic "no brainer" that many will make it out to be. And if you don't understand how the contract works... please learn everything about it.

$0.02

 

On the other hand, if you want to own a car for several (in my case around 12) years, then consider the outright payment on a carefully chosen lease return. In this market (3% loans, good investment returns) I only put down what it will take, in my estimation, to never be upside down in the car. That's around $10k on a *really* well taken care of $75k well-optioned station wagon (plus 7yr/135k ELW) in my case. Are the 2014s really worth $35k more? If I own it for 7+ years- no. In the meantime 72 months of payments is around $1100 a month. Also, interestingly, I save on insurance by owning the car vs. leasing. Its probably only $200-400 a year, but its in there.

What I can do is every 6 years or so, alternate between making payments on a really nice family car and making payments on a 2-seater. When the payments for the Z06 ran out, I saved up for the money down on the E63 wagon while I looked for the perfect car.

In a few years, once the payments on the E63 are done, I put some money down on a 2-year old 911 Turbo S and have (once again) a pretty nice pair of cars for one payment at a time.

Thats how us Non-Doctors/dentists/Chiropractors/wealthy people have to do it while contributing enough to our 401k, not raiding our company stock options, saving for college for our 3 kids, and keeping our demanding spouses happy

We'll call that the "alternative" viewpoint.

 

Unless you finance it all, nothing down, there is a down payment. I'd assume 20% + TTL. A lease doesn't need that, and a lease does not finance the whole price of the car. A lease pays for the depreciation plus an interest fee.

The point I made about optimistic residuals basically makes depreciation hit less, ergo lower payment. Paper is more expensive, but depreciation is supported. The 3 yr residuals are not 57% that I'm seeing at auctions for 2010 E63's, and if they are better, buy it off lease and resell it.

Captive sales with serial lessors and nice off-lease used cars offer dealer and MB, BMW nice incentives to keep leases cheap. Greatest depreciation occurs in first 2-3years, so normal people buy off lease cars from morons like us, or trade-ins from car ***** like us.

With cheap paper, harder to justify lease, but if you're young and financing house and young family, and need a new car to assuage the torture of a post-doc fellowship or residency, it's less $ needed upfront. Balloons work similarly, but cost higher than lease usually.

Cars like these have a TON of back end costs and needs that will crush wallets. $2-4k for extended warranty helps, but eventually you end up driving a damn loaner all the time, and can't predict when it'll take a dump. Cars are kleenex now, use 'em and dump before something needs fixing. Interest isn't what kills you.

 

The guys here have all given you great advice on the pro's and con's of leasing -- especially the math.

Let me give you the "rest of the story". The reason I lease is as follows:

1. It is relaxing to know that I am unlikely to get screwed at the end of the lease. You pretty much give the dealer your keys and start shopping for something else.
2. It changes the way you think about your car -- you simply do not "worry" as much when you lease. I know people will say "it's the same", but it isn't to me. I drive it more like a rent car. It's a mental thing. Perhaps this is only unique to me but I doubt it.
3. I know I will almost never have to pay for maintenance (note -- I have mainly been leasing high end BMW's...with free maintenance).
4. I know that I am not going to have to deal with any Craigslist weirdos when I go to sell -- or deal with any blood sucking dealers (they will have already extracted their blood from you in the form of the money factor). I prefer to lose blood to dealers slowly -- preferably in the form of monthly lease payments.

I agree with everyone here that it makes more financial sense to finance a new car with low interest rate paper or pay cash for a 2-3 year old variation of a model you like.

I want to drive a new car every 3 years and I take great satisfaction doing it in the form of a lease arrangement -- if only for the mental relief.

Not sure this helps, but my last "turn in" with BMW was a dream. Handed over the keys and drove off with another new one. Ahhhhhhhhhh......

 

Well, think of it this way... someone else did the math for us on those costs. The actuaries who price the warranties. I just paid $3400 for the 7/135. This is on a CPO car, so the 2-year old car was already 5-year warrantied. The $3400 is just for an extra 2 years. On the other hand, I just gave them $3200 (and the dealer $200) that they'll get to keep "invested" for 3 more years. Lets say they go conservative and get 5% on that, so they would have $3680. But administration, profit, and whatnot means that they are literally banking that an E63 wont have more than $1500 of problems a year between 5 and 7 years of age (which seems to me exactly when Bosch is built to sh*t the bed). Thats $125 a month. I can do that. This is my third top-of-the-line Mercedes. Only the 450SEL 6.9 cost me more than $125 a month to keep running (stupid nitrogen suspension). The Volvo S70T-5 I have for the kids cost me more than $125 a month.

They also sold me a lifetime oil/filter change for $600. The math was even easier on that one. Thats the cost of 6 oil changes and I'm at least keeping the car for the next 5 years.

On a different note,

Finance Fee = ( Net Cap Cost + Residual ) × Money Factor

So yes, you are paying interest on the ENTIRE value of the car, NOT just the residual that you are using. No one is going to simply loan you a car and not charge you interest on the value.

You guys have to realize (and I think you do) that using a car for the first 2 years of it's life, maintenance included, is going to cost a metric assload. Even the residual is a clue. 61% on a 2-year lease. Geeeeeeeeez.

Like I do in Vegas, I'm always going to bet with the house and the quants (and the index funds).

 

So lets get down to it, enough with the lease vs finance, this will go on forever! What are the current incentives to buy (AMA/fleet, conquest, loyalty, trunk money, etc) and for those that leased per OP's question, what kind of deal did you get?

 

With leasing You will always pay more over a fixed period of time compared to financing. Leasing appeals to people who can barely afford the vehicle and hence they are taken for a bath. Simple economics. Those who have the money can buy or finance and come out ahead compared to leasing every time. Having said that, buying and selling a depreciating asset is hardly a good financial decision for anyone to make. I look at it as a losing money proposition, just trying to lose the least amount possible but yet fund my addictive habit.

 

I haven't leased since 80's, used to trade more than Vic, and paid cash for 24 cars since 2000. Kids don't drive yet.

Health issues in family made me decide leasing is a nice walkaway. Really, there's a point you don't care what it costs to make a deal end. Charlie Sheen said it best- "I don't pay hookers for sex, I pay them to leave afterwards". I don't want family stuck with car they don't need nor want.

I don't know anyone that leases that can't afford to buy said car, so that kills that massive overgeneralization

So, to OP, some guys are rabid borrowers to buy new, some guys lease, some guys buy used-'em ups, some guys pay cash, and some guys do all depending on life.