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Prices Paid: Buying & Leasing Experiences Mercedes-Benz E-Class Lease Questions
1049 messages, Last post on Nov 25, 2009 at 12:39 AM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: ocautoseeker (May 14, 2008 10:10 pm) |
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Replying to: ocautoseeker (May 14, 2008 10:10 pm) In your explanation, you say to multiply the MF by 2400 to get an approx. interest rate. On the Bluetec Diesel for March it was posted as .00225, which would equate to an approx. interest of 5.4%. If I do the calc based on the March info and assume a cap cost of $52,000 and a term of 36 months I get: 52,000 X 55% = 28,600 52,000 - 28,600 = 23,400 23,400 / 36 = 650 (52,000 + 28,600) X .00225 = 181.35 650 + 181.35 = 831.35 Now, If I were to assume that I could make a lump sum for the depreciation of $23,400 and amortize over 36 months at 5.4% (the approx rate) I come up with a payment of only $705.53. To get to the payment of $831.35, the actual assumed interest rate is approx. 16.75%. That is based on amortizing the depreciation of $23,400 over 36 months (Assume you were to bouy a car for $23,400 and pay it off over 36 months, to equate to a monthly payment of $831.35, you would basically be getting charged 16.75% by the bank). Is there something amiss in the above calulcation? At a payment of $831.35, you are paying a total of $29,928.60 when you are theortically using $23,400 of the value of the car. Total interest is $6,528.60. At $705.53, you are paying a total of $25,399.08, so total interest is $1,999.08.
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Replying to: madmarlin (May 15, 2008 5:44 am) When you lease a car, you are borrowing the whole amount, not just the depreciated portion... Even if you paid the entire depreciation upfront, you'd still owe a finance charge each month.. In this case: $28,600 (cap cost) + $28,600 (residual) X .00225 MF = $128.70 per month... Hope that helps.. kyfdx |
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Replying to: kyfdx (May 15, 2008 7:10 am) i understand what you are saying. the one fundamental problem I've always had with leases is the concept of paying interest on the residual. The residual theoretically represents the value of the car at the end of the lease. When you turn it in, that should represent what the dealer could then sell it for to a new buyer. At that point, they would then charge interest on that value to the new buyer. By also charing interest to the lessee, they have, in effect, double charged the interest and recorded more profit. That is whay the actual interest rate I arrived at is 16.75% when you strictly look at the value the lessee is supposedly deriving from the car over the term of the lease. Not saying leasing is bad, by any means. there are deals to be had and you can always work a better one. there are other factors, too, that make leasing more attractive than buying. But the rates can be a bit harsh when viewed pragmatically in comparison to the value derived. With all that said, i still want to try to work a lease deal on a new Bluetec, potentially. We'll see what happens.
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Replying to: madmarlin (May 15, 2008 5:18 pm) First... the dealer does nothing but sell the car to a bank.. what happens when the lease is done really has no effect on your deal. In essence, you are taking out a loan for the full amount of the selling pricee, and paying the loan down to the residual, at which time you sell the car for what you owe on it (actually turning it in, but the same concept). There is no double interest or additional profit. It is no different than if you bought the car, then sold it to a private party after 3 years. But, leasing isn't for everyone! regards, kyfdx |
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| I am considering E350 lease or purchase. I see a couple of people mentioned about $2000 lease money but in Edmund incentive section, it also lists $2000 marketing support apply for all E classes. Since MB also offering 0.9%APR, would it be better to lease or buy the car? I drive only 10k annually. | |
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Replying to: mynextcar (May 16, 2008 9:42 pm)
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Replying to: ocautoseeker (May 16, 2008 11:56 pm)
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I am looking at a 2008 E63 Retail Price 95440, cap cost 86940 and I have been told two different MF and Residual values from two dealerships. I am looking at a 27 month 15k mi. per year lease. .00150 and .62 and .00120 and .59 are the two I was quoted. What are the real numbers from Mercedes Financial? Thanks. |
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Replying to: mynextcar (May 16, 2008 9:42 pm)
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