hi everyone

i'm struggling with the decision to lease or buy my new e63 wagon. Being quoted money factor .0022 and 60-61% residual on a 36mo lease...neither seems terribly favorable, leaving aside my expectation that i don't think i'll want to part with the wagon in 3 years. I'm curious if anyone has seen anything materially different in lease rates, and if any owners have experienced better or worse resale values trying to sell on their own. On the flip side, i've owned my car for the last 5+ years in nyc and the ease of leasing is attractive. My guess is that i will be able to sell it for more than residual implies in 3years but i'm not sure if that will trump the convenience of leasing

thanks in advance to anyone who has thoughts

 

Tough choice and you have to factor in assumptions that may or may not be true. The old "past performance does not guarentee future returns". Leasing, you absolutely know the costs over the term up front and it's easy.

The figures I was offered on a 24/15 was $795 acquisition, MF about the same (.0021) and residual 58%. I am reasonable sure I will be switching cars in @ 2 years.

Looking at trade in value on KBB (not retail), the "residual" was @ 10% higher for a 2 yo E63S. KBB can give you a ball park figure to use on trade in values of 2-3 yo cars for sale, or trade in. "Past performance does not guarentee future returns", but it's a place to start to get an idea what the residual value might be based on what it was over the past few years,

http://www.kbb.com


For me, with that MF (interest), acquisition and residual, the money left "in the bank" by leasing vs purchase would have to earn an unreasonably high "safe" after tax return to break even. So I went with a cash purchase.

So, no worries about any mods, miles driven and some other things.

In general, if you think you are going to keep the car for an extended period, purchase (cash) is much better than lease. If the entire expense is a business expense, lease not purchase. Although purchase might be a better business decision with a lease back or expensing the purchase might even in a business scenario be a better option, explaining on audit those nuances can suck. DAMHIK.

To rub salt in the wound, California leases on E350s are going for as low as MF .00088 and residual of 68% on 24/15 . That is quite a bit lower than what is offered in NY and on AMGs.

Each situation is a bit different but I hope I gave you some factors to help make a decision that is the best for you.

 

not a car you'd ever want to service outside of MB warranty is another consideration.

after one-year with the fancy sound system I think I'd say pass on that but get the CCB for sure (WOW)

 

A business lease also may be more financially beneficial to you than a business purchase of you are writing off this vehicle

 

Not a business write off so that scenario doesn't apply unfortunately.

I feel like ill love this car, and want to keep it for a long time, but in 3 years i will be lured by the new gadgets of the next generation e63 and want to swap into that. Lease is a bird in hand for that purpose of course, but as I figure the numbers if the dealer is willing to pay me more than 58k in 3yrs for the trade-in than buying is economically advantageous. My guess is that it will be close to a push

 

Is this a 2015 or 2016? How many miles per year?

That residual sounds like if might be for the sedan - suggest you double check and nail that down.

You should also consider a single pay lease. It drops your money factor way down. And you will only be paying interest on the residual value amount.

This option basically gives you the ability to opt out if the car has issues, gets banged up in an accident and is never really the same, find things that annoy you etc etc. There is also an opportunity to get a purchase price lower than the residual - thereby further reducing the price you pay for the car. Other minor details are you defer the majority of the sales tax and you are not required to purchase the GAP insurance as the lease takes care of it.

 

thanks for your thoughts Otis

that was indeed the residual

I was advised against doing a single pay lease because that money is at risk if the car is badly wrecked and the leasing company gets paid first by the insurance company and you might be out your payment

at any rate, i decided to buy it. bank of america 5yr loan 2.14%. higher payments of course but i think it will save me a good deal of money even if i trade the car in 3-4yrs

 

Sounds good.

You may have been mislead a bit. Under the Mercedes Single Pay Lease terms if the vehicle is a total loss you get your money returned pro rata based on how many months there are left on the lease.

 

Thanks for the info. I'll investigate when I pickup the car Saturday...

 

Also, I think they take .0008 off of the the money factor for the single pay. So if you can get their "buy" rate money factor then subtract the .0008 off of that.... could be a very good option to consider.