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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
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Replying to: gmannj (Feb 15, 2008 4:23 am) -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 |
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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?
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Replying to: blackmamba24 (Feb 15, 2008 3:02 pm) 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? |
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S550 4matic 2008 PII package Ipod Integration Wood/Leather Steering 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? |
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Replying to: moet (Apr 23, 2008 11:06 am) Looks to me like a 36mo/15k lease, correct?
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Replying to: ocautoseeker (Apr 23, 2008 1:55 pm) 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)?
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Replying to: moet (Apr 24, 2008 9:58 am) 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!
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Replying to: ocautoseeker (Apr 24, 2008 5:32 pm) Thanks again!
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Replying to: moet (Apr 26, 2008 6:26 pm) |
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In terms of good deals out there. The deals right now on high line vehicles are very good. The germans have announced that they will be changing the way they do buisness in the near future. Our economy and dollar is so very bad right now. They are going to raise the prices of the vehicles, and cut production. So now is the time to buy before dealers are not going to want to discount vehicles at all. The car industry is going to go through some major changes in the next year or so. So grab the deals while you can, because who know what the future brings.
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