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You are in the Prices Paid - Buying & Leasing Experiences
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Mercedes-Benz S-Class, Car Leasing, Sedan
#103 of 213 2008 Mercedes S550 4Matic
Sep 04, 2008 (6:09 am)
I am in the process of negotiating a lease assumption on a 2008 Mercedes S550 4Matic in Long Island, NY. The car has the Premium II Package, iPod Integration, and Wood/Leather Steering Wheel. There are only 400 miles on the car and 38,600 miles to be driven over 34 months. The payments are $1585 per month (includes 8.625% sales tax) and there is $0 due at signing (current owner is willing to pay $595 transfer fee).
What do you think? Can I do better?
#104 of 213 Re: [juice1220]
Sep 06, 2008 (8:57 am)
Sounds like either you've been listening to a dealer too much or are a dealer yourself. There haven't been any such announcements by "the Germans." The dollar is actually growing very strong, and it's the euro that is crashing. If our economy is bad, very few people are buying cars. If very few people are buying cars, raising the prices means that the automakers would suffer even more. The future is only going to bring more discounts as the dealers realize that barely anyone wants their gas guzzlers.
Sep 06, 2008 (11:07 am)
Yes I am a dealer. I work for a BMW dealer, and I worked at Mercedes Benz before this. August 1st BMW did announce what I wrote before. Discounts will not happen as lightly as you think. Every company is in business to make a profir, and the profits bmw and mercedes are generating lately are not that good. Especially when they are taking huge hits on the lease turn ins. Go to bmw or mercedes benz websites in Germany and see how much an s class or 7 series is in euros. Its about the same. Plus they pretty much buy all their cars in europe so residuals really dont come into play, and the extra cost of shipping and insurance, blah blah blah. Mercedes Benz and BMW were once considered a high line vehicle, and were not mass produced as they are now. over the past 2 months BMW residuals have dropped 5-8% across the board. Leases have actually gone up. The car business will change dramaticaly in the next year or 2. Oh and the msrp of the vehicles for 2009 has increased already. The only thing that is going to happen is alot of dealers will be closing shop, because they will not be able to sell as many cars, I know you probably dont care, but the less dealers, the less chance for you to shop from dealer to dealer, which means less discount. I am in a bullet proof area in terms of the economy, but many many dealers will be hurting in a big way. We can talk more about this in about a year. Plus how cheap do you really expect a $90,000 S-class to get?? Its not meant for everyone to have one in their driveway.
#106 of 213 Re: [juice1220]
Sep 06, 2008 (5:27 pm)
Profits are made by either selling something exclusive at high margin or through sales volume. The reason Mercedes and BMW are not making good profits is that their cars are no longer as competitive as Lexus and other similar brands are. It's no secret that the MSRP for a new Mercedes in Europe is way higher than in the States. The reason is that the most of the sales are made here, and raising the price too much would scare away the buyers and drive the volume down. You can't be very profitable on a non-mass-produced high-line vehicle (see Bentley for a perfect example). You have to drive sales volume, and -- hence -- you need to stay competivie in terms of pricing. The MSRPs on 2009 BMW or Mercedes models didn't increase. Actually, the S550 is now cheaper since several former options are now standard (Premium Package I and Wood/Leather Steering Wheel). The inflation itself means that they are 5% cheaper than a year ago. I don't care for the dealers since there will always be competition. If you expect that people would line up to cash out $100k for a rapidly depreciating asset during a severe and prolonged economy downturn, you're in for a huge disappointment. The dealers in "bulletproof" area that I live in right now haven't sold a single 2008 S550 at least for the past 4 months. I expect to buy an S550 slightly above the invoice (and even then, barely anyone would buy it). After all, the most margin is made on warranty repairs, not the initial sale.
Sep 08, 2008 (7:32 am)
I am not sure of Mercedes MSRP's but BMW did go up. I dont know what "bulletproof" area you live in, but my local Mercedes dealer is selling s550 like Pez candies. The reason some of those options have become standard is because the longer a manufacturer produces the same product the cheaper and cheaper it gets to produce the vehicle, so they can give the consumer some standard options. For BMW the US. is not the number 1 market, but Europe is, so they fill production for Europe and then we get the rest. Like I said before we can argue about this for ages, but lets give it a year, and talk again.
#108 of 213 Re: [juice1220]
Sep 10, 2008 (7:16 pm)
OK, let's take a specific example. Back in 2006, I bought my dad a 750Li. The MSRP was slighly over $93k. I just built the same model on bmwusa.com and it came out to slightly over $90k. Bake in the inflation, it went down a lot. Which MSRP are you referring to? I'd like to see specific figures. I live in California. The only area S550s are selling well is probably NYC. Not to worry, soon enough those investment bankers will be trading them in to help the balance sheet Come on, do you really think it costs Mercedes $90k to build a new S550? It's not about transfering the savings to the customer, it's about staying afloat when a Lexus offers twice as many toys at a fraction of the price. As far as BMW selling in Europe, here's a quote for you (you can Google it for the source):
"The USA remained the largest single market for BMW and MINI cars in 2007. With a sales volume of 335,840 units (2006: 313,603 units /+7.1%), the BMW Group sold more vehicles there than ever before."
We can argue for ages, but somehow I'm the one who keeps getting the facts right
#109 of 213 Re: [skrontz]
Sep 10, 2008 (7:52 pm)
BMW's number one market is the US. Not europe. Audi's number one market is Europe. You can see their lease rates are not good compared to BMW. I was told by a BMW dealer that Audi A6 sells more in Germany and in europe than the BMW 5 series.
#111 of 213 Re: [juice1220]
Sep 13, 2008 (9:50 pm)
So what? Didn't find anything on the supposed MSRP increases you mentioned. I can post any rumors I want in my blog, too. One needs to look at the facts, not rumors.
Sep 15, 2008 (9:02 am)
These are not rumors in a blog. Being in the car business, we sometimes have info that maybe the general public doesn't have. Just maybe for once you can listen instead of trying to be right all the time. I dont know what you do for a living and dont know the ins and outs of your business, but I am glad you know everything that pertains to mine. I just hope you dont work for Lehman Brothers, but if you did, it would explain alot. At least one of us does. You are right, I am just a dummy manager in the car business, and really know nothing about what I do. I hope all your car buying needs in the future are wonderful, and may you get all your cars from now on at triple net. Enjoy !