BLee80

Any input regarding a 36 vs 48 month lease?

My thinking is that I will definitely not mind driving this car for 4 years. Car will still be under original warranty, and the payments will be lower with 48m lease. Any downsides other than possibly getting hosed if I decide to jump ship mid lease? With MSD, interest rate will be around 3%, which is comparable to the interest rates on loans but without the back end risk.

drbeck13

The debate rages. Many of these manufactures do 'pull ahead's' after 36 or 48 months to get you into a new car. I have gone and on several sites plugged in numbers for both leases and financing with 36 and 48 month terms. They are almost identical at the bottom line. Living in CA where we pay the entire DMV taxes up front instead of the incremental for a lease, it's a no brainer for me. Sure, 48 months, why not? It gives you the option to buy it after 48 months if you love it anti has a value (doubtful) beyond the residual value Banks aren't stupid They know the value going in Even with the last 2017 911 Traga I bought and sold (supposedly going to appreciate), I still sold it and lost money Car=depreciating asset

Pertplus

Just to clarify, in California I'm pretty positive that unlike several other states, we only pay CA sales tax for the depreciated amount (and the "interest/usage" charge by the finance company) with respect to a lease. Are you talking about the DMV fees like license and registration when you say "DMV taxes?"

drbeck13

You are correct And IF you buy the car at end of the lease, you must pay taxes on that amount. It should have been "DMV fees/use fees/taxes"

Pertplus

Ok cool. I had an "holy ****" moment when I read your post the first time. Thanks for the clarification.

susman@eurogermantown.com

in Maryland you pay all the taxes upfront anyways so 48 is fine.. as long as 12k miles a year or less for warranty

on an 18 E63 sedan.. the difference in 12 months (36 to 48) is only 7% so a 48 month lease would be cheaper here.. plus spreading the taxes across an extra 12 months

Pertplus

I used to hear the "sweet spot" for many AMG leases (at least what I was told in the past) was 39 months. Does MBZ still do 39 month leases?

susman@eurogermantown.com

Yea but it isnt because they they do the average of 36 and 42 and round the residual down.. it honestly depends.. MB like most manufacturers artificially adjust the residuals if they want the cars coming back in 3 year, 42 or longer... sometimes (Like 18 GLE350's) they go from 36 to 42 months and drop 7-8% so a 36 month lease is cheaper than a 42.. if I did 39 it'd still be worse monthly than 36... but 48 is better on many cars (most depreciation is 24 to 36 months and tapers off)

Pertplus

Interesting. As always thanks for the info!

limeypride

Not entirely on-topic but close... see my thread wrt/ my lease being listed for assumption: https://mbworld.org/forums/w213-amg/...-000-msrp.html

I thought this might be of interest to you.

Vic55

Susman knows his stuff--- cause he Benz Jedi

Id say in this day and age with Benz, 36 is the best term to keep a car with a decent payment and especially those who like to get a new car every 3 years. The good thing about MBFS is that one can actually get the same MF for any term if they qualify from a credit and deal structure standpoint. Ive seen some opt for 60 months to drive their payment down while having the same MF thats offered at 36. Further, because the rent charge in dollars is a derivative of the residual plus the net cap cost times the MF itself, the longer the term the less one pays in interest per payment on average. But because of the much longer term, the monthly payment does not lower the payoff as fast.

There a basically 3 types of taxation on leases (outside of DMV costs): tax on each payment and any cap reduction, tax due up front on just the payments for the term of the lease and cap reduction, and taxes due on the capitalized cost of the entire car.

susman@eurogermantown.com

BLee80

Interesting with the 60 month lease Vic. I recently had a SA tell me to do a 60 month lease at 7500 miles, with all intention of only driving the car for about 36 months. This would net the lowest monthly payment, and probably $400 a month less than the 36 mon. He said to come trade in the car at 3 years, and the value of the car would be roughly the buyout of the lease. He says there is no prepayment penalty for the lease and the interest not charged on future payments.

Its hard for me to wrap my head around that. I just feel like I will probably owe $75-80k on the car and they will offer me $60k at trade in. If I walk and run out the lease, I have to drive it for one year out of warranty which makes me real nervous.

Vic55

He is smoking crack.... if you do a 60 month lease, the gain is the lack of payment but the loss is in the slower paydown of the payoff (while the residual is less, the term extension creates a much bigger impact). You may save 200-300 dollars a month but after 3 years, your savings could be 10k but your payoff will be far from ACV on a trade. I have seen this over and over and over for the past 20 plus years. What you would to see is an amortization lease schedule on the 60 month program vs the 36. The difference is you will still be on the hook for the negative equity at 36 months if you try to trade in early on a 60 month lease. The residuals are just too favorable on AMG's and while this creates attractive lease payments, it also locks you in because the payoff is that much more than true ACV's at any end of term.

Benowen

Vic,

If I was going to do a 36 month/45,000 miles lease on an 2019 E63S at a cost to me of $116,000 (not including taxes, fees), what would be considered a good monthly payment? Thanks for your help - have been going back and forth buying or leasing. Good thing the car is sitting in Baltimore, give me time to make the right decision

abhatti55

In all seriousness, what approach do the Vic55's of the world take, when one only wants the car for a year or so. ADD is too bad to keep one for 36 months.

Pertplus

You buy a used one with depreciation already built into the price. Buying a brand new car (or leasing one) and dumping after a year....unless its one where the demand far exceeds supply....will never net you a financial windfall.

susman@eurogermantown.com

ru8n away, find someone better.. that is all wrong

susman@eurogermantown.com

lots and lots of variables.. $2k? roughly

MSD's?

Pertplus

Speaking from personal experience with a Porsche 2015 TTS, never ever ever do that kind of deal.

Pertplus

Are the MSDs like BMWs program where you do up to (6 or 7 or something like that) payments up front and it buys your rate down and you get the money back (minus any damage or other things they take off for)?

X166

What's the max number of MSDs that MB will accept? And, assuming top credit profile and max MSDs, what is the absolute lowest money factor on the wagon?

drbeck13

AND lets not forget why 39 months? Because they get you to pay the DMV fees for the entire 12 months when you only drive it for those extra 3 months. No money back from CA DMV!!

Benowen

Vic55

This has always been an issue for anyone I know who is considering this term as well... the only caveat is an MBFS pull thru which can occur often and that usually entails 3 or 6 payments as a push. But its a gamble when someone is leasing the car for 39 at inception. 39 does work if someone knows for sure they will not keep the car to term. 1/12 lesser payment is not huge but can be slightly attractive.