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Prices Paid: Buying & Leasing Experiences Mercedes-Benz S-Class Lease Questions
134 messages, Last post on Sep 30, 2009 at 8:43 AM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: delta737h (Aug 14, 2007 4:25 pm)
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Replying to: mlroberts55 (Aug 16, 2007 11:04 am) Here is how it works. First, ask the dealer what the excess prepaid mileage charge is (one of the few things they can't lie about because it's itemized in the lease contract). Let's suppose that it's $0.15 per mile and that you're considering a 3 year lease. The pre-paid excess mileage charge is computed as follows... $0.15 x (20,000 - 15,000) x 3 = $2,250.00 Second- Yes, this charge is deducted from the residual. So, if the residual = $20,000, then... Adjusted Residual = $20,000 - $2,250.00 = $17,750.00 The adjusted residual is used to computed your payment. The $20,000 residual is based on 15K miles per year (res. factor x MSRP) and so it must be adjusted downward to account for the additional mileage. Because you're putting an additional 15,000 miles on the vehicle (assuming the benchmark is 15,000 miles... which, I believe it is), it depreciates an additional $2,250.00 over the term of the lease and so the residual is adjusted downward by this amount. One thing to consider... If you don't use all your pre-paid mileage, be sure that any unused mileage is credited to you at lease end. Many fund providers will not do this. Also, if your state charges sales tax, you will most likely have to pay tax on any pre-paid mileage charge. That tax can either be paid upfront or rolled (i.e., capitalized) into the lease. Another possibility is that a few fund providers might lower the residual factor by a few percentage points to account for the additional mileage. I've never seen or heard of that being done but I suppose that is a possibility. Hope this helps. John
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Replying to: delta737h (Aug 16, 2007 12:46 pm) Of course, you can't get any of that back, if you don't use it... regards, kyfdx |
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Replying to: delta737h (Aug 16, 2007 12:46 pm) John |
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Does anyone know the current Mercedes money factor and residuals for either a 2008 S550 (the one I'm looking at is MSRP at $102,515 with a sell price of $7,500 off) or an '08 S63 (MSRP at $140,090 with a selling price right about that). Thanks, Michael
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Replying to: qpmicro (Aug 30, 2007 4:37 pm) Can anyone help? |
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Replying to: delta737h (Aug 14, 2007 7:17 pm) Re: sales people's intelligence. I don't agree that the typcial sales guy should understand discounted cash flow analysis and I wouldn't trust his analysis anyway. But how about acquiring some basic product knowledge? Most of the ones I have met have never, ever, even "built" a car on the manufacturer's web site and have little grasp of which options are available for which model, etc. Call 10 Audi sales guys and ask if the performance seats are availalble as a stand alone option. Few know. Re: Julius' store in Greenwich. They have chosen a low profit margin path. This defeatist strategy is not my problem. Apparently, from what Julius says, they sell about 6 times as many low margin new units as high margin used cars. Why? I'm convinced that new car dealers sell far more new than used not only because of factory pressure but also because the average sales guy can't sell a USED car and so the store doesn't even try to hire anyone but willing new car order takers. Wiscasset Ford in ME is probably the biggest Ford dealership in New England. How do they sell so many new cars? Well, they are in a very rural area with low wages. Their new car sales guys are literally just $10-12 an hour order takers which saves the dealership money. They have almost no used cars.
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Replying to: blckislandguy (Sep 23, 2007 5:22 pm) Julius |
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Replying to: blckislandguy (Sep 23, 2007 5:22 pm) I agree with you 100%. The cheapest way to acquire a car is to buy a two or three year old unit and run it until the wheels fall off. I'm writing a textbook on car leasing which is the main reason for my participation in these forums. I love to help others as well as learn from them. I've learned a bundle just by reading a lot of posts not only from very knowledgable and experience people but by the inexperienced folks as well. It is actually the inexperienced people with very little leasing knowledge that often ask very good questions that really forces one to think (and sometimes drink). You also make a very good point regarding sales people and product knowledge. In fact, you hit the nail squarely on the head. It's product knowledge that really matters most. Regarding new v. used; it seems to me that there is a world of difference between the two. Used car sales is tough. One has to be able to properly appraise used cars and financing is some what more complicated. As such, I think used car sales people should be better compensated than the new car folks. I have no clue what the difference in profit margins is for new v. old. If I had to guess, I'd say that new car sales provides the larger profit margin and so it comes as no surprise that there are many more new car salesmen than used car salesmen. John
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Replying to: delta737h (Sep 24, 2007 2:29 pm) Factory pressure?? In Massachusetts, it is reported that Herb Chambers just paid north of 650 million for Foreign Motors West in Framingham. After the much delayed closing (the banks were understandably reluctant), BMW and MB each indicated that they wanted new 60 million dollar facilities. This at a time when the baby boomers are getting long in the tooth and the economy could be headed for the hopper. So, how do you move the new car iron and pay for the lavish taj mahals the factory makes you build? You hire platoons of pleasant young people for little money who like the idea of working 80 hours a week in a BMW store talking with their age cohort about cars that in truth neither one can really afford. But, around the corner in the used department is where the money is made.
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