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Mercedes-Benz E-Class, Car Leasing, Sedan, Wagon
#1231 of 3250 May RV and MF
Apr 16, 2010 (2:55 pm)
What are people's feelings (best guess) as to what Mercedes Benz Financial will do to the money factor and residual value for May. Trying at decide whether to lease my E350 this month or next month? I believe that the $2000 loyalty cash will still be there in May. I know it is not a guarantee but I'm guessing that the loyalty cash won't go away yet. I'm inclined to wait.
#1232 of 3250 Re: May RV and MF [msc5]
Apr 16, 2010 (5:31 pm)
The money factor on E-350 Sedan is 0.0025 which converts to 6% rate interest rate except for V12 models, AMG models and E-Class Coupe which use standard money factor of 0.00275(MBF lowered the standard rate from 0.00305 to 0.00275 this month) every other model from MB uses a lower money factor with the next highest model money factor being 0.00225 and the lowest money factor being 0.000125(SLK).
So it is not too far fetched to think MBF might lower their MF especially when most other manufacture MF are under 0.002 and most are under 0.015 considering car loans via most banks today can be had at rates sub 4% without even looking at all and sub 3% rates can be found at many credit unions for 36 months. So MBF cost of money is less than 4% for sure and more than likely under 3% as well.
The only reason the current money factor is so inflated is based on the fact MBF sets their rates to come up with a payment and not based on interest rate environment at all. They consider their competition on E-Class Sedan to be BMW 5 series which is being replaced this fall and Audi A6 which is getting replaced next year. All 3 leases come out pretty close to each other for similar priced cars. As both models are on their last stretch of life so their residual are super lower at this time vs MB is a new body so it has a much higher residual currently.
The BMW 5 series currently has a 46-50% but I expect that to be much higher on the new body coming out in Aug/Sept so if BMW puts an aggressive money factor on that car, you can expect MBF to react quickly and lower their money factor aggressively as well. On the flip side if BMW tries to pull a MBF like they did on E-Class Coupe and use a standard MF, then I would not expect MBF to lower or offer any other incentives on the E-Class sedan because it will lease cheaper than BMW 5 series.
Apr 17, 2010 (1:45 pm)
Hi everyone, I just want to share some info regarding to MSDs (multiple security deposits). Please correct me if my info is wrong.
The finance manager told me that the April's MF of 0.00250 is a special rate which CANNOT be further reduced by MSDs. No way in hell he would do it even if I mentioned the other dealer could do it (per poorprof's deal). If I really wanted to use MSDs, they would have to use a "standard" MF which is in the range of 0.003xx. So the MF w/ MSDs will still be higher than the "special" rate of 0.00250. So, I walked up and left the place.
Can anyone confirm on this issue? Isn't the "standard" rate 0.00275 per ob995's post? Thanks.
#1234 of 3250 Re: MSDs [outie]
Apr 17, 2010 (5:51 pm)
The standard rate is 0.00275 currently but dealers are free to mark up or down the rate as much as the want. If the mark up the rate from the standard program offered on that car, they get a bigger commission from MBF for getting the customer to agree to a higher rate and if they mark down the rate the commission paid to dealer would be less as well. I have no idea if MBF pays the dealer less based on MSD or not tho and MBF might ding the dealer after 1 security deposit which is why dealers do not advertise or even advise customers of that possibility. And if you credit is above 720 MBF will even waive the security deposit requirement to get "base" rate which is the published rate which on an E Class Sedan is 0.00250
#1235 of 3250 Re: MSDs [ob995]
Apr 18, 2010 (11:51 am)
substantial loss to them. This is not lip service, they reaally did. So my payment went up a little, but a better deal overall. Ob is absolutely right. MB fiance turned down my contract for the same reason (too low an MF to apply MSD to). The 0.0025 is the absolutely lowest rate dealers have. Beverly Hills MB was very professional about it. They worked out a nice deal for me at substantial loss to them. This is not lip service, they really did. So my payment went up a little, but a better deal overall. Of all the dealers I talked to, they ended up giving me the nest deal and then made up for MB finance. Just ask for their fleet manager.
Apr 18, 2010 (7:20 pm)
Thanks guys for all the information. It all makes sense now. Apparently the way MSDs work is very different from BMW and Mercedes. With BMW, you can buy down the MF with their published buy rate. With Mercedes, you can't use MSDs to buy down the published buy rate, but only the hidden standard rate.
I have asked several dealerships and some of the financial departments don't even know about MSDs and some have a substantially marked up rate of 0.0035. The only one that knows some of it is Beverly Hills but even they cannot give me a rate I expected with 10 MSDs (0.00275 - 0.0007 = 0.00205, but BH says they can only do 0.00217). I guess at this point the best option is to wait for May's rate to come out on the 4th.
#1237 of 3250 Re: MSDs [outie]
Apr 18, 2010 (8:13 pm)
The downside of waiting is that the RV may go down. They have held the RV the same for almost 5 months into the production year.
#1238 of 3250 Re: MSDs [poorprof]
Apr 18, 2010 (11:26 pm)
That's true. However, the RV for the new 5 series is 61% for 10k with a .0025 as well. I don't know if that would make MB stay with a higher RV.
I will wait for this dealer to get back to me tomorrow. They are willing to have the finance director to call MBFS to find out more info, which I really appreciated. If they can do the same as BH, I may just go with them since BH does not have the car I wanted, otherwise I will have to wait for May. We'll see & thanks again.
#1239 of 3250 2010 E350 RWD lease
Apr 19, 2010 (2:10 pm)
This is the lease that was accepted by my local dealer. Tell me what you think.
2010 e350 RWD/palladium silver/p1/wheel package
cap cost 50870
cap cost reduction 2000 loyalty
Adj cap cost 49965
term 39 months
MSD(10) reduces mf by .007 to get mf of .0018
#1240 of 3250 Re: 2010 E350 RWD lease [boomboom4]
Apr 19, 2010 (7:00 pm)
Are you sure your dealer accepted the 0.0018 mf w/ MSDs? That's the topic I've been discussing with other members in the last few posts. I have asked several dealers here and none of them could reduce the MF from the 0.0025 rate with MSDs. It's simply not allowed by MBFS. Even the dealer that originally accepted it later called poolprof that MBFS rejected it and he had to settle for a higher rate.
Which dealer is this?