Is it Legal - Mercedes-Benz Forum

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post #1 of 7 (permalink) Old 07-18-2005, 08:43 AM Thread Starter
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Is it Legal

I still have 18 months left on my C280 1999 lease and now possibly upgrade to a E350. I went to the dealer and ask for that special offer 39months for $529. But they said I gonna be paying 700-950mo. because I still owe for the car so Im thinking, what I owe on the current car they are adding it to the new car I want. My guestion is that legal???, because I was told that they can't do that, most likely a penalty fee to break the lease contract but not to rollover the financial on the car I have now. Any opinions

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post #2 of 7 (permalink) Old 07-18-2005, 09:10 AM
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RE: Is it Legal

Don't know about the law in CA, but that's a common practice elsewhere....roll the deficit into the new car payment/lease. It's a real "snowballing" effect...Jaguar owners are most familiar with it.

OTOH, the "bank" will limit the amount of shortfall that can be rolled forward.

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post #3 of 7 (permalink) Old 07-18-2005, 10:17 AM
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RE: Is it Legal

Essentially, you have a legally binding agreement to pay for your C class that meets their "aging schedule" of what the C will be worth at the end of the lease.
Some dealerships will ignore the lease balance if you're within a couple months and bury the balance in the profit on the new car - - but you've probably got close to 7 grand hanging out there that's tough to ignore.
It's just like trading in a car that you still owe money on -- they'll roll that balance on top of the new car and accordingly, your payment increases.
I doubt there's much room to get around those issues for another 12-15 months.... but good luck !

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post #4 of 7 (permalink) Old 07-18-2005, 11:22 AM
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RE: Is it Legal

Just a note to any forum members: NEVER LEASE! It's a win/win for the dealership and the financing department.

My $0.02 on leasing

Irvine, CA
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post #5 of 7 (permalink) Old 07-18-2005, 11:34 AM Thread Starter
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RE: Is it Legal

Thanks for the input guys, yeah I guess Jomac915 is right. I might as well purchase a new C350 which is coming for 2006 and less money to purchase than the E instead of leasing. I guess I got myself in a sticky situation where I have to wait until lease ends and then see. Anyone with more info that be great

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post #6 of 7 (permalink) Old 07-18-2005, 01:20 PM
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RE: Is it Legal

Leases only work for someone who always gets a new car every two or three years and never ever needs to bail out early.

Auto depreciation is a "hockey stick" with a really big drop in year one, a pretty big drop in year two and a (merely) big drop in year three. The leasing company figures the value at the end, subtracts it from new value, adds profit, taxes, etc and divides it by 36 (or 48, 39, etc). If you don't stick to their schedule you are upside down right now.

They are trying to do you a "favor", like the Jaguar example by rolling it into the new deal and avoid you writing a $15,000 check.

We have all been tempted by the low monthly payments of a lease, but most of us are way better off buying the car of our dreams the old fashioned way.[8D]


Now: 2010 GLK350 4Matic Then: 2003 C320 4Matic, 2006 E320 CDI, 2000 E320, 1994 E320, 1991 190E, 1985 300D, 1983 300D

"Eagles may soar, but weasels don't get sucked into jet engines."
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post #7 of 7 (permalink) Old 07-18-2005, 03:53 PM
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RE: Is it Legal

Right on, Jomac!

A lease is a FLEECE!

No matter how you do the math, ownership is always better, even if you are going to write it off on business exspense!

I didn't really give it much thought until I heard financial guru, DAVE RAMSEY talk about it on his radio show. He challenged one time for anyone to prove there was a time when leasing was better than buying and to this date, no one has proved him wrong.

Fleeces are designed to keep you off balance and to look like a great deal. You are many miles ahead to just pay cash on a vehicle that's a couple years old and still in warranty! I haven't, to this day, found anyone that I know who has fleeced a car and was glad they did it 2 years later!
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