stratman

Hello all,
Just curious: It seems that some are leasing the E63s but the payments are quite large. Plus at the end of the lease you walk away with no car unless you lease another. Of course one also doesn't have to eat the depreciation or worry about the warranty expiring either. Which brings me to purchasing: Yes you own the car with no mileage limitations, can do what you want to it but if kept for more than four years or so then the warranty is up and if something breaks well, you're on the hook for it. Personally, I've leased one car and bought all of the others and I plan on paying cash for my E63s when it shows up sometime in July. Depreciation is a bear and if the e63 depreciates like my C63 did then it will be brutal. But if I get six years or so of reliable and fun driving out of it then that is ok with me. What are your thoughts on this? Also, my C63 was totally reliable and fault free for the just under four years that I owned it. Considering issues that some have had on the early cars, do you all think in the long run the E63s will be pretty solid? I thank one and all in advance for your comments.

Dagger9903

Buying. Probably finance given rates are low and terms generous.

Leased one car so far and found the experience annoying. Worried about using too many miles and annoyed at not using enough. Nickle and dime-ing at the end about scratches and dents also annoying. It made sense for that car though because we never planned to keep it long term (was a 1st generation Nissan Leaf) and was stupid cheap with the tax credit and free 3 months of additional time when gen 2 was delayed a bit.

Fundamentally though, I just prefer the flexibility of owning, esp long term. Plan on getting the extended warranty on the e63s and keeping it for 10+ years. Wagon body should make it super versatile and age well.

limeypride

For me, the decision is based on a few criteria: desired longevity, expected mileage, desire to drive something new frequently and whether or not you're looking forward to the day where you have no car payment. In my case, I drive ~30,000 miles a year; I'm perfectly happy with having a car payment for the rest of my life because I also like driving something new and have no plans to own more than one at a time hence ownership longevity isn't a consideration. Combined, I'm left with only one sensible option: to lease.

This part is complicated and rife with variables but I'll try and type up my thinking. I've done the math comparison between a 3-year lease and selling a purchased vehicle at the same 3-year term frequently. In many cases, favorable leases are far cheaper than buying, e.g. BMWs. The not-so-favorable leases, e.g. VW/Audi/Porsche/dieselgate-lying-sacks-of-$h!t, are either too close to care or in favor of purchasing. Low mileage vehicles also tend to go in favor of purchasing. For my requirements and especially considering my mileage, MB falls in between BMW and Audi on the lease terms and I come out on top... just.

That said, I don't ever see the leases through to completion either, rather, I sell the lease itself (not the car) roughly 12-18 months in rendering purchasing a non-option since the depreciation would encourage frequent vomiting.

If you plan to buy and keep a car for say a 3-year term, then high-mileage becomes a worry since it brings the risk of not being able to sell the car for a reasonable sum. Take my last RS7 Performance, for example, that was a $150,000 car that I kept for almost exactly one year. When I got rid of it, it had almost 28,000 miles on it. Imagine that car 3-years in--a 2017 Audi RS7 P with almost 90,000 miles and no warranty--yummy, that'll sell quickly... not.

That's my rather lengthy tuppence...

visualguy

My opinion... You should be able to get 60K miles out of these cars without the need for any repairs, just simple maintenance. Beyond that, it gets a bit iffy. I don't have anyone that I would trust to do repairs on such a car anyway, so I don't feel comfortable with keeping it beyond 60K miles.

Buying beats leasing only if you keep the car for 6+ years. This means that if you drive 15K or 12K miles a year, you're better off leasing. If you drive 10K, it's pretty much a wash, and if you drive less, then buying starts being attractive. For example, if you drive only 6K miles per year, why lease? I believe most people drive 10K+ per year, so leasing makes more sense for most.

stealth.pilot

Buying has always beat leasing in my case. Usually by about 20-30%. This is if you don't pay sales tax, buy with a deep discount and if you are able to sell the car yourself so you get out at a high price. In my case all three of those things are always true.

The issue with buying has been that the amortization schedule on a loan force you to build equity which is not a good use of your capital. I have solved that issue by using a balloon loan which has a lease like amortization schedule that mirrors the depreciation of the car. It essentially variabilizes the monthly cost of owning the car. $5000 down, $1260 a month. $117k MSRP.

limeypride

Interesting. After 3 years, you're into the car for just over $50K--sounds good! A few questions if you don't mind:
1. how long do you keep the cars?
2. what's the term on the balloon loan?
3. what's the interest rate across whatever your loan term is?
4. in your experience, has the re-sale value when the balloon pops managed to cover the loan?
... I forgot one ...
5. how are you avoiding sales tax?

Vic55

lol wait for this one--- Mit and I both do similar processes when buying cars.

I know that in his case for the E63S he used Pen Fed and they do have a cap on the amount to finance so it requires a decent down but the rate is "stupid" low. Pen Fed is hyper aggressive in rates when certain ltv's are met.

limeypride

The 'decent down' part doesn't work for me since I typically want out of the car within 18-months. Throwing money down at lease inception just makes it harder to sell the lease because it's too tough a pill to swallow causing most folks that do so to ask for the downpayment back in the lease-swap thereby reducing the potential for a quick sale in a big way. Of course, 'decent down' is a subjective number and, in my case, I'm happy to swallow up to 4-digits but once I hit that $10K mark, I start to feel a bit nauseous.

stratman

Thanks to all of you for your insights and strategies for purchasing and leasing. I personally only drove my C63 a max of 7500 miles/year as I use my truck for beach duty and share commuting to work between the two (about a 25 minute drive each way). So this is why I'll more than likely just buy the E63s outright. It's a big chunk of change and the tax alone is over $9k (thanks California) but at the age of 61 I'm pretty sure this will be my last performance type vehicle. Since most of my money is tied up in my 401k this is where the cash will come from and I'll have to allocate another 20% for taxes. But I figure I'm like a car with over 100k on the odometer. A few small dents here and there but still running well though all bets are off as to how much longer it will go. Also, this will not put a hurt on my ability to have a comfy retirement so why not.

Dagger9903

Never heard of a bullet auto loan. Could be interesting if it's not that expensive. Good way to align asset value with cash out.

kponti

Stealth, what is the term of your balloon loan? How many months and what is due at the end of that period?

Koru_Kinshi

I'm probably going to lease because of the tax deduction on the payment and everything associated with it. Depreciation on a luxury car sucks compared to monthly payments, heh.

cprx7

Current rates from MB on leases are really high about the equivalent of at least 8.0%

Vic55

Actually auto approval buyrate is .00230 or 5.52% and tier 1 is .00260 or 6.24% which is still several points lower. Now if one scores bad in the system or the dealer marks them up then you could see .00330 or 8%

But more than likely the buyer was Tier 1A or .00230 and the dealer made some reserve.

cprx7

I was also told purchase rate 1A credit is 4.9%

stealth.pilot

1207 per month (my previous number was a mistake because I looked it up), 60 months, 40k payoff. My credit score is over 820.

They had shorter terms with lower interest rates (mine is around 3%) but my goal is always to keep my capital invested at 12-15% per annum so the maximum term with the smallest down payment is always my preference.

Vic55

Not sure where you leased your car but they dont even use apr % and the best on any standard buyrate (non subvented) is .00230 and has been for months.

4.90% is .00204 and thats not even a rate they offer. I work with the banks for years so dont trust those dealers LOL

But if you are retailing the car then 4.90% could be real... and very very high.

Koru_Kinshi

Price on your car?

stealth.pilot

MSRP was around $118k and selling price was around $106k

Katkon

I always purchase, but not because it makes financial sense - simply because I don't like the idea of renting someone else's vehicle.