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Mercedes-Benz S-Class, Car Leasing, Sedan
#91 of 193 Re: 2008 MB S550 4matic [blackmamba24]
Feb 14, 2008 (11:37 pm)
Here are MBC's current lease numbers...
2008 Mercedes S550 4matic Sedan
24 Month – Residual 62% of MSRP – .00365
36 Month – Residual 53% of MSRP – .00330
48 Month – Residual 42% of MSRP – .00330
60 Month – Residual 37% of MSRP – .00330
Numbers assume 10k annual miles.
As you can see, MBC has crummy rates on this model right now. You might try leasecompare.com or your local bank or credit union as an alternative.
#92 of 193 Re: 2008 MB S550 4matic [ocautoseeker]
Feb 15, 2008 (5:23 am)
Thank you- this is helpful!
#93 of 193 Re: 2008 MB S550 4matic
Feb 15, 2008 (3:06 pm)
Hey, thanks for that info...i had a question...what do you think i should be able to get on the price of a 2008 S550 4matic with the P2 package and the Wooden Steering Wheel option for if i wanted to buy it outright (sticker is $95,245)...i was hoping i could get a price including taxes (michigan tax is 6%), destination and all the other stuff...
-Just the price out the door that you think i should be aiming for paying straight up cash...i've decided that financing through my own bank is better than MBF, but ive decided that buying versus leasing makes the most sense for me currently...
Any help on a target price would be greatly appreciated...i know the whole between dealer invoice and msrp target...but i also know there are hidden extras and all that stuff...regardless, im not looking to get the car free or anything but im not into getting ripped off, which i know i did in 2000 when i leased my other S Class...then was able to get a pretty good deal on my lease in 2004 for an S Class...but now im looking to buy so i haven't really been too concerned with price in the past...help me out, please...thanks
#94 of 193 question about residuals
Feb 15, 2008 (4:02 pm)
Can someone explain something to me...
For example, if the msrp of a particular S Class was $95,500 and the residual after 39 months was around 50% (according to the info above) and the dealer invoice is somewhere around 89,500, then why is the lease around 1500 a month plus around 5000 down...i just don't understand this...
That means that after i have taken this car for 39 months, i have paid around 63,500 (including the 5000 down) and when i return the car back to the dealership, the car is still worth around 47750...that means that the car should have been worth around 111,250. (63,500+47,750).
Why isn't the lease per month more along the line of 1250-1300...thats a total ripoff...am i missing something?
Even if the lease per month was 1300 with nothing down for 39 months...i still play around 50,700 (the residual is still 47750) and the apparent total worth of the car would have been 98,450...thats still about 10,000 over dealer cost...what gives?
#95 of 193 Re: question about residuals [blackmamba24]
Feb 15, 2008 (8:27 pm)
On a lease, you pay the difference between the cap cost (negotiated price) and the residual value. This figure is known as the depreciation, and thus what you are paying. But, you then have to add in the rent charge, otherwise called interest.
So, assume an MSRP of $96,000 and you want to lease for 36 months. You take the residual (50%) and multiply it by the MSRP. In this case, the residual value (estimated price of the vehicle at lease-end) is $48,0000.
Now, say you negotiate a cap cost (hypothetically, a selling price) of say, $91,000. There is a spread of $43,000 (the depreciation), so you simply divide $43,000 by 36 (the number of months in the lease term). You get a base payment of ~$1195/mo. But, now you have to add in the rent charge (finance charge). With MBC's current buy rate .00330 (7.92%), you will multiply that number by the sum of the residual and cap cost. $48,000 + $91,000 = $139,000 x .00330 = $458.70. This is your monthly finance charge.
So now, take your base monthly payment of $1195 and add the finance charge of $458.70 and you get a pretax monthly payment of $1653.70. Then, depending on your state, you can have the sales tax broken down into your monthly payments. So, assuming a 6% sales tax, that adds another $99.22/mo to your payments giving you ultimately a payment of ~$1753/mo
The bottom line: you simply paid the $43,000 in depreciation + interest. Obviously, this vehicle has a crummy money factor through MBC currently and thus why you paid $20k total in finance charges.
Any cap cost reduction (down payment) simply lessens the spread, ultimately giving you lower monthly payments. Large cap reductions are not a good idea when leasing.
Hope this makes sense?
#96 of 193 Deal or No Deal?
Apr 23, 2008 (12:06 pm)
S550 4matic 2008
Total Cost = 97,665
Markup = -10,268.34
Total Selling Price= 87,396.66
Cap Red = 5825.92
Total Cap Red = 81,570.74
Capped Taxes = 3,761.30
Total Capital Cost = 85,332.04
Monthly payment = 1,310/mo (with tax)
Total out of pocket = 8,800.01 (includes 1st monthly payment, taxes, fees, etc.)
Residual = 47,160
Money factor = 0.0025
Not much haggle with the sales person. Just told him what i was expecting to pay and he worked the numbers (this is in NJ btw). Good deal or Bad deal?
#97 of 193 Re: Deal or No Deal? [moet]
Apr 23, 2008 (2:55 pm)
That looks like a good deal (based on the current pogram). The residual and money factor gel with current MBC numbers. My only advice would be to NOT make that additional cap cost reduction. I'd advise only paying your 1st mo and dmv's at inception.
Looks to me like a 36mo/15k lease, correct?
#98 of 193 Re: Deal or No Deal? [ocautoseeker]
Apr 24, 2008 (10:58 am)
ocautseeker: It's a 39mo/15k lease.
Made the deal!
Just out of curiosity, what difference would it have made if i paid cap reduction now or have it rolled to my monthly payment? Either way i end up paying the same $$ (Unless he'd bring down price of the vehicle by an additional 5k)?
#99 of 193 Re: Deal or No Deal? [moet]
Apr 24, 2008 (6:32 pm)
Congrats on the car!
Only reason I do not recommend cap cost reductions on leases is because if your vehicle gets wrecked (totaled) or stolen, you may not be able to recover the upfront down payment you made.
You may already know this, but I'll reitterate... The GAP insurance included in your lease through, in this case MBC, would cover the payoff of the vehicle, but most likely you'd be out the $5k. By making a cap cost reduction, you're essentially prepaying a portion of the deprecaition and not paying down any principle like on a purchase. In other words, there is no equity being built in a lease, therefore it's advisable not to throw any money at it.
However, many people are very pyschological when it comes to payments, so if the payment suits you and you had no problem laying out the $5k, and you're happy, then that's all that really matters.
Again, congrats - beautiful vehicle!
#100 of 193 Re: Deal or No Deal? [ocautoseeker]
Apr 26, 2008 (7:26 pm)
thnx for the advice ocauto. i didn't think of it that way (not building equity). I'll keep that in mind the next time i'm out to lease (another 3yrs to go).