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Mercedes-Benz R-Class Lease Questions

803 messages,  Last post on Sep 03, 2012 at 12:17 PM

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What is this discussion about? Mercedes-Benz R-Class, Mercedes-Benz R63 AMG, Car Leasing, Wagon, SUV

Messages Page 25 of 81

#241 of 803 Re: Need Your Experts' Advise! [eugez] by martinf

Sep 25, 2006 (1:39 pm)

Replying to: eugez (Sep 25, 2006 9:27 am)
1. I do not have a feel yet for the pricing on the 2007's. The Mercedes sponsored leasing program suggests a selling price of $47,160.59 based on an MSRP of $48,700 for the 2007 R350 27 month lease, but suggest a selling price of $45,494 on a $54,175 2006 R350 (about $9700 off MSRP)which is still about $2000 to $3000 higher than what dealers are really letting the vehicles go for. We will have to wait to see what others are getting on the 2007's to know. Let's hope others join and participate in this forum!
 
2. In my opinion, the 27 month is the sweet spot. Although you have to pay one more year's registration, the residual value for 24 and 27 months has been the same. What that means is that you only pay interest and no depreciation for the last 3 months of your lease (i.e., the last 3 months are about "half price."
 
3. On the 2007's expect a "money factor" of .00165 (3.96% in English language)for a monthly pay lease. I advocate the one pay only if there is a money factor savings to justify it. With the 2007's, it does not pay. With the 2006's, the one pay lowers the MF from .00295 to .00185 (7.08 down to 4.44%)

#242 of 803 Re: Need Your Experts' Advise! [martinf] by eugez

Sep 26, 2006 (7:01 am)

Replying to: martinf (Sep 25, 2006 1:39 pm)
martinf,
 
 Thanks again for your help and detailed explanation.
 
 Issue with the 2006, that it's very few left on market (at least what I see). Anyway I'll try to find a deal, if not on 2006 than on 2007.
 
1. Any ideas what could be the target price in case of 2007 (MSRP 49K), how lower from the MSRP?
 
2. About time period. I understand that you prefer 27 months (and I see why). What about 39 months?
 
3. I got your point about advantage of "one pay", thanks.
 
 Also, I have a question about your lease calculation. Based on your email I have a formula -
   LEASE price = DEPRECIATION cost + LOAN fee
where
   DEPRECIATION cost = SELLING PRICE - PRICE AFTER LEASE
   6800 = 47K - 42000(MSRP * RESIDUAL value (60K * 0.67))
and
   LOAN FEE = INTEREST * LOAN
6000 = (MONEY FACTOR(.00295)*2400)= 7.08%) * SELLING PRICE
  Is it correct?
  What is the 2400?
 
Thank you.

#243 of 803 Re: Need Your Experts' Advise! [eugez] by leaseexpert1

Sep 26, 2006 (12:43 pm)

Replying to: eugez (Sep 26, 2006 7:01 am)
eugez:
 
Make sure you shop this vehicle hard! There are dealers out there that are selling the R 350 at $5000 UNDER invoice on the 2006 and $1000 UNDER invoice on the 2007. It is a CA dealer, but you can have it shipped to NJ for 800 to 1000. You are looking at a close to 10K off MSRP on an 06 and 5K on an 07.

#244 of 803 offer/counteroffer by zorogris

Sep 26, 2006 (2:57 pm)

In Seattle area I made an offer to the dealer on an R350 w/ $58605 MSRP as follows:
$47000 Purchase price
27m/ 10k yr w a MF .00295 Res 65% (I think those are the right numbers still)
 
He countered at $48500 purchase price, which is basically invoice - $7k. Any thoughts on this?
 
Also, can anyone explain if the 5.5% holdback comes from MSRP or sales price? Or if it works differently? Otherwise, I don't understand where the $12-15k off MSRP that I see people using on this board comes from. (MSRP is only 4k over invoice plus the 7k incentive gets me to 11k. Is the dealer getting another 4k in holdback?)

#245 of 803 Re: offer/counteroffer [zorogris] by irishrogue1

Sep 26, 2006 (3:19 pm)

Replying to: zorogris (Sep 26, 2006 2:57 pm)
MB walnut creek is advertising on their website "at least $12k off MSRP" any '06 350 or 500. the higher the sticker, the more mark up to msrp and thus more discount available.
 
dealers are going below invoice (and of course the $7k factory cash) into their 5.5% holdback.
 
MBWC has 16 350s and 21 500s in stock.....and the 07s are arriving....

#246 of 803 Re: offer/counteroffer [zorogris] by pureautomobile

Sep 26, 2006 (4:00 pm)

Replying to: zorogris (Sep 26, 2006 2:57 pm)
5.5% of holdback is from MSRP and giving away to the customer 4.5% is very real. I just received an email from Santa Monica W.I. Simonson Mercedes in So Cal, and they are discounting (advertised) $13,500 off MSRP of $60,630 (2 available) on 2006 R500 with options: 18in Wheels, Comfort Pkg,Trim Pkg, Entertainment Pkg, Sunroof Pkg. Not the greatest in options but very decent deal. Base on the invoice of $56,441 (Edmunds) with $7K incentive and $3,334.65 holdback, the dealer is making $1023.65 on paper.
The dealer is giving away 4% of their holdback without even negotiation. This is the perfect storm that MartinF mentioned. Get the R before MB put the brakes on production.

#247 of 803 Re: offer/counteroffer [pureautomobile] by zorogris

Sep 26, 2006 (6:30 pm)

Replying to: pureautomobile (Sep 26, 2006 4:00 pm)
Well, I wish the dealers in Seattle area were willing to play ball. I spoke with 3 dealers today and none of them are willing to go into their holdback! Greedy bast*rds! I may drive one up from NorCal since I am down there occasionally on business but an unnecessary pain in the rear if you ask me. If someone in the NW gets a dealer to play ball please post it!

#248 of 803 Re: offer/counteroffer [zorogris] by pureautomobile

Sep 26, 2006 (11:36 pm)

Replying to: zorogris (Sep 26, 2006 6:30 pm)
It's end of the month again, and once again, I am getting emails and phone calls even though I've told the dealers that I've got my car.
 
So Cal dealers will make every effort to get you buy here. They may even ship the R to you at their cost, or negotiate into the lease. North Cal will do the same.

#249 of 803 Re: Need Your Experts' Advise! [eugez] by martinf

Sep 27, 2006 (12:24 am)

Replying to: eugez (Sep 26, 2006 7:01 am)
First, the "perfect storm" lease situation that we have applies largely to the 2006 models. What I mean is that because of the huge discounts from MSRP, the "selling" price of your vehicle will be about 22% to 23% less than MSRP. That is to say that your original "selling" price is already a "residual value" of 77%. In 27 months, Mercedes would like to delude themselves into believing the vehicle will still be worth 67%. Therefore, your true depreciation costs on the vehicle will be only 10% for 27 months. Take the lease to 39 months (by the way, a generally cheaper way to go), your residual drops another 10%, but this time for only 12 months more of lease. In this case (very strange case indeed and like nothing I have ever seen in the car leasing arena), the shorter lease actually is more economical. The problem with the 2007's is that MSRP's have been adjusted downward to market conditions, and you will not be able to start off with the vehicle at 77% residual value like you do with the 2006's.
 
The 2400 is the way to convert the money factor (lease speak) into interest rate (normal speak). e.g., Money Factor of .00185 equals 4.44% interest rate. Swapalease.com does a very good job of walking you through the entire lease business, and it does it in just a few pages of easy reading. I would recommend it to any new or even experienced potential lessee. I found the information helpful, too. Your equation for the depreciation is exactly correct, but your equation for the "loan interest" may be off a little. That's where the swapalease site will help. Good luck and my thanks to pureautomobile for a lot of helpful information on this forum!!
 
I am still trying to find other "perfect storms" out there, but I have yet to find anything close on vehicles we would really want. Maybe a Lincoln TownCar or Navigator or Cadillac Escalade (previous bodystyle). The new BMW X5 is due in November, and we may see similar deals on the 2006 BMW X5 leftovers. I will keep you posted.

#250 of 803 Re: Need Your Experts' Advise! [martinf] by eugez

Sep 27, 2006 (2:08 pm)

Replying to: martinf (Sep 27, 2006 12:24 am)
martinf,
 
Thanks for your help and explanation.
Finally, found ok offer on the 2006:
MSRP $56K 3K drive-off 12K/year for 27 Mo - $480(includes all)...
Definitely not the best on the forum, but...

Messages Page 25 of 81

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