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Discussion Starter #1
Hi, All.

I've never purchased a car before so I am feeling anxious. I'm afraid of being taken advantage of by the sales people who know I don't know much about car negotiation. The quote I have received is for an E350 4matic 2009 P1, wood steering wheel, indium grey, non-sports package:

MSRP of $58,065 with lease discount make the Capitalized Cost $50,165:
No Money Down For 10,000 miles
39 month payment of $659.61 including Tax
27 month payment of $785.85 including Tax

Is this a good deal or should I wait until next year and just purchase it instead of lease in 2009?

Thanks for any answers in advance,
sbp
 

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I think the best person to answer your question would be your tax adviser.
Some states allows to deduct lease from taxes, some less or nothing. If you are self-employed you can write off the cost of the car, but that is red flag for IRS.
So unless somebody is in exact situation you are -all Internet advice needs to be verified with your local laws.
Good luck.
 

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Discussion Starter #4
Hi, Kajtek1. That is a good point. My accountant is going to go over the numbers with me tomorrow, but I still want to get the best price even if it qualifies as a deduction if that makes any sense.

Odel, the residual values are the following:
The Residual Value on the lease at the end of 39 months is $27,871.20.
The Residual Value on the lease at the end of 27 months is $31,935.75.

Does that give a better indication if it is a good deal or not?

Thanks for the responses and insight.
 

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Hi, All.

I've never purchased a car before so I am feeling anxious. I'm afraid of being taken advantage of by the sales people who know I don't know much about car negotiation. The quote I have received is for an E350 4matic 2009 P1, wood steering wheel, indium grey, non-sports package:

MSRP of $58,065 with lease discount make the Capitalized Cost $50,165:
No Money Down For 10,000 miles
39 month payment of $659.61 including Tax
27 month payment of $785.85 including Tax

Is this a good deal or should I wait until next year and just purchase it instead of lease in 2009?

Thanks for any answers in advance,
sbp
Can't answer the lease vs. purchase question for you as that is specific to your circumstances and preferences.

However, I think the 39 month offer is very good, depending on your location and tax rate. For NY, it's good and I would think that means you are getting a discount of over $9k on the sale price of the car, since your total capitalized cost (including bank fees, etc.) is just over $50k. I believe that the MB Finance residual for the E350 4matic is 47% and the money factor is .00071 (about 1.7%)-- at least for NY area.
 

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Some info

sbp76, a salesman friend of mine that works for an MB dealer told me years ago the best way to shop for a lease is to not tell them you want to lease the car, unless its an advertised lease special deal that your going to look at. Let them think you want to buy it, and hammer out the price. Then tell them you want to lease it at that price. And another question that can make you sound like you know what your doing is, What is the hidden interest rate? although I've never leased a car, what he told always sounded good. I can't advise as to buy or lease. There are advantages and I guess disadvantages. The one advantage is that you won't be socked with any repair bills, and you'll be done with the lease before the factory warranty is up, and then into another new car. Good luck in getting the new car, it should be alot of fun...................Thor
 

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Here's something to consider: in about six months, a new 2010 E class series will roll out with revised styling and engineering. If you lease the 2009, you will then be driving the 'old' model. Maybe that doesn't matter to you, but to some people it might. Also, it's generally recongized that the last year of the a model series is usually not the best buy. Since the 2009 looks substantially like the 2003, the 2009 will suffer in resale value, while the 2010 model will be the 'new' model for many years and the resale value will be enhanced. Maybe these aren't issues if you're leasing, but it's something to think about.
 

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Aside from the tax angle, financially you are financing 50k - 27.8K = $22.3K (using the 39 month term) at a cost of $3,500 in interest. Since the initial value is lower than sticker price, and the interest rate is low especially with the no money down for 10,000 miles, it looks like a good deal.

Make sure there are no hidden cost at the end of the lease. Good luck
 

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Discussion Starter #10
Thank you for all of the thoughtful replies. I will think about what everyone has said. I really like the circular headlamps of this model, and from what I understand, that will change in 2010.

Nlehre, that is an interesting point about it losing its value being the last year model to look as it does. I wonder if that means if I choose to purchase it at the end of the lease, they may offer me a better deal than what its residual value is. I think I read somewhere else in the forums that someone was offered less than their residual to purchase it at the end of their lease. I wonder how often that occurs, and I wonder if I can expect that to happen in my case.

Thorgod, according to the salesperson I am working with, MB is heavily promoting the lease right now on the 09 models. My initial intent was to purchase outright, but if I purchased these would be the numbers:

Purchase Price is: MSRP $58,065 minus $3,000 discount = $ $55,065.
Sales Tax 7%, Tire Tax $1.25 and Doc Fee of $150.00.
Final purchase price: $59,070.80
Special Finance Rates (With approved credit)
3.9% 24 - 36 months
4.9% 37 - 66 months

Mhj202, the sales tax is 7% over here. Is the 39 month lease still a good deal in your opinion then? This is what I would be paying on the lease broken down into payment and tax:

39 month payment of $616.46 + State tax of $43.15 = $659.61
27 month payment of $734.44 + State tax of $51.41 = $785.85

sf5868896, I believe those are the same advertised lease rates that we have going on here. Thanks for the link.

Odel, thanks for the good tip. Today, I will ask if there are any hidden costs at the end of the lease. Do you think I still have room for negotiation? Asking for an even lower payment with no money down? I don't want to take the offer if I can get a better deal. Furthermore, does this sound like a good deal because the 09 is still kind of newish or would this not be a good deal in your opinion if it were mid 2009 already and that was their lease offer?

I guess I just wonder if I would get a better deal if I leased a 09 in 2009....I'm sure the price would come down a lot lower on the purchase price. So many options to consider...

Thank you, everyone, for the input and food for thought.
 

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Thank you for all of the thoughtful replies. I will think about what everyone has said. I really like the circular headlamps of this model, and from what I understand, that will change in 2010.

Nlehre, that is an interesting point about it losing its value being the last year model to look as it does. I wonder if that means if I choose to purchase it at the end of the lease, they may offer me a better deal than what its residual value is. I think I read somewhere else in the forums that someone was offered less than their residual to purchase it at the end of their lease. I wonder how often that occurs, and I wonder if I can expect that to happen in my case.

Thorgod, according to the salesperson I am working with, MB is heavily promoting the lease right now on the 09 models. My initial intent was to purchase outright, but if I purchased these would be the numbers:

Purchase Price is: MSRP $58,065 minus $3,000 discount = $ $55,065.
Sales Tax 7%, Tire Tax $1.25 and Doc Fee of $150.00.
Final purchase price: $59,070.80
Special Finance Rates (With approved credit)
3.9% 24 - 36 months
4.9% 37 - 66 months

Mhj202, the sales tax is 7% over here. Is the 39 month lease still a good deal in your opinion then? This is what I would be paying on the lease broken down into payment and tax:

39 month payment of $616.46 + State tax of $43.15 = $659.61
27 month payment of $734.44 + State tax of $51.41 = $785.85

sf5868896, I believe those are the same advertised lease rates that we have going on here. Thanks for the link.

Odel, thanks for the good tip. Today, I will ask if there are any hidden costs at the end of the lease. Do you think I still have room for negotiation? Asking for an even lower payment with no money down? I don't want to take the offer if I can get a better deal. Furthermore, does this sound like a good deal because the 09 is still kind of newish or would this not be a good deal in your opinion if it were mid 2009 already and that was their lease offer?

I guess I just wonder if I would get a better deal if I leased a 09 in 2009....I'm sure the price would come down a lot lower on the purchase price. So many options to consider...

Thank you, everyone, for the input and food for thought.
I still think it's a good deal but am surprised that the sale price (if you bought it) would be that high. I can understand lease incentives but that seems much too high given that the sales price on the lease would be below $50k (keeping in mind that your total cap cost includes bank fees, etc).

Also, I believe that all MB Finance leases have a "disposition fee" at the end of the lease- can't remember the exact amount but I think it's $595 or so, which is waived if you roll into a another MB lease.

As for waiting til next year, my undersanding is that typically the incentives are weak at the beginning of each calendar year but with this market, I guess it could all be different.
 

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With the new W212 around the corner why not wait or buy a slightly used '07/'08 for about half the price of an '09 with no miles. Just a thought. ;)

The local stealership has an '07 with 24K miles & they can't move it. It was marked 39999 two months ago. Now its down to 34999 still no takers. Maybe a lease is the way to go the way these cars depreciate.
 

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Discussion Starter #13
Mhj202, I don't know why the purchase price would be so much higher. The salesperson did say in his correspondence to me, "As you can easily see, the special is really encouraging the lease." I have asked him several times if the purchase price could be any lower, and he has said with this month's incentives focusing on the lease, he can't make the purchase price significantly lower. He said I would end up with a lower overall purchase price if I just purchased the car at the end of the lease than to buy it now.

Sunburst, that is precisely what my husband suggests. I guess since I have never owned or purchased my very own car, I am excited to get a brand new one. That is probably preventing me from making a more logical decision. My emotions are getting the best of me.

Actually, I wouldn't mind purchasing a 2008 model with no or very few miles on it, but the salesperson said they were all gone (Thinking back on it, I suppose he meant on his lot....I guess he could get me one from another dealership? I have no idea.).

Anyhow, I wish I weren't such a car newb. This is stressful, but reading everyone's opinions is calming me down a bit.

Thanks again.
 

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lease vs. purchase

Here is my opinion based on experience as a leasing dealer and as one who has leased a car. My leasing business failed so take my advice with caution.

1. Leases come with mileage limits, usually 12 to 15k miles/year. If you are a high mileage driver you have two choices. One is to buy more miles up front resulting in a higher monthly lease payment. The second option is to pay for the additional miles at the end of the lease at a negotiated cost per mile.

2. The lease vs. buy decision is usually based on economics. The bottom line is that one can easily lease a car that one could not afford to buy. If your intent is to buy your car at lease end this is one way to get into your dream car with minimal up-front cost but ... it wll probably cost more overall.

3. Getting into a lease with no up-front cost or "down payment" is the way to go. Down payments on a lease serve only to reduce the monthly payment and it is money gone forever.

4. You are still responsible for insuring and maintaining the car although many maintenance items can be negotiated into the lease. Remember, everything put into the lease will increase the monthly payment.

5. Normal wear and tear is o.k. but you must maintain the car's condition. If you habitually spill your beer or tend to not get minor scrapes and dents fixed it will cost you at lease end. You can't raise chickens in the car and expect to get away with it.

6. All that being said, the lease deal you describe sounds pretty good. Check your mileage limit.

My personal experience had been with leasing a Saab Turbo in 1987. The car was stolen in Alexandria VA and it turned out to be a positive experience. I called the leasing company and said "Soneone just stole YOUR car". Their response was "Call the insurance company" and "Do you want another one". At the time I was 3 years into my 4 year lease and was worried about my over mileage so I declined. The insurance company paid the remainer of my lease and sent me a check for $600.00 to make up the remainder of the residual value.
I have buying ever since since my pleasure is elderly Mercedes Benz.

Good luck and I'm sure your decision will be the right one for you no matter what it is.
 

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Just picked up my 2009 E350 on Monday and opted for a lease. There are some great resources out there that can help you with making sure you are armed with enough information to negotiate a fair deal for both you and the dealer. I used Edmunds.com. They have some great articles as well as a lease calculator that can help you keep the dealer honest.

The typical consumer looking for a lease is trying to keep their payment low. There are factors that the dealer can adjust that will help them make more money. These would include the cap cost of the vehicle, money factor, term, etc. Basically if it is part of the calculation they can change it to their benefit!

To keep my dealer honest I started by running the calculation for the current lease advertised on their website and used the Edmunds calculator. I was specifically looking for the money factor (interest rate) they were applying to the lease. I started with the MSRP, factory cash of $3,600, dealer contribution, residual value (purchase price at end), down payment ($3,995), monthly payment, etc. and solved for the money factor (aprox 0.0005). To convert this to an interest rate you multiply by 2,400 and you will find a rate (1.20%) even better than the purchase options. All of this info is in the fine print on the advertisement except the money factor.

I printed a copy of the advertised calculations and brought it with me to the dealer along with additional calculations based on the MSRP of my vehicle (got it fully loaded with options) and the price if I were purchasing it through the Costco car buying service. (maybe not the very cheapest, but a pretty good price)

Sure enough, when I got there they quoted me a payment over $300 more than my calculations:eek:!!!! I asked to see a copy of their lease calculations and imagine their embarrassment when I pulled out my printouts and showed them their MSRP, cap contributions and money factor were all wrong.:D In the end I got a money factor of 0.00071 (1.70%) and a better capitalized cost than I anticipated. They came down to within $10 of where I thought it should have been and I drove away a really happy owner and comfortable I received a fair deal. I left my cash in my MMA at 3.30% and if you exclude depreciation you could almost argue I'm making money! (I know, nobody makes money on a depreciating car:thumbsup:)

Good luck with your negotiations. Spend some time preparing and you can drive away knowing you got a good deal.
 

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Lease vs buy is a big topic - if you want to own the new car for 39 months and then dump it why put 50K in a car? You're taking a depreciating asset and most likely either taking money out of investments to pay for it or paying interest to buy it -

If you keep a car for 10 years then buying is the best deal - if you want to drive a new car ever three or so years and have no interest in keeping it after the lease term ends then consider leasing - if you think buying at the end of the lease period do look closely - I doubt you'll come close to getting a good deal in that event -

You could also consider buying a two or three year old E class for a steal right now and save tens of thousands -

Steve
 

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I don't know where you live but if you look in your local newspaper or on Craigslist in your city my guess is you will locate a great number of E cars in excellent shape - I STOLE a 500 4matic recently - couldn't pass it up - and it's like new and still in warranty - "why pay more?"

Just a thought -

Mhj202, I don't know why the purchase price would be so much higher. The salesperson did say in his correspondence to me, "As you can easily see, the special is really encouraging the lease." I have asked him several times if the purchase price could be any lower, and he has said with this month's incentives focusing on the lease, he can't make the purchase price significantly lower. He said I would end up with a lower overall purchase price if I just purchased the car at the end of the lease than to buy it now.

Sunburst, that is precisely what my husband suggests. I guess since I have never owned or purchased my very own car, I am excited to get a brand new one. That is probably preventing me from making a more logical decision. My emotions are getting the best of me.

Actually, I wouldn't mind purchasing a 2008 model with no or very few miles on it, but the salesperson said they were all gone (Thinking back on it, I suppose he meant on his lot....I guess he could get me one from another dealership? I have no idea.).

Anyhow, I wish I weren't such a car newb. This is stressful, but reading everyone's opinions is calming me down a bit.

Thanks again.
 

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My initial intent was to purchase outright, but if I purchased these would be the numbers:

Purchase Price is: MSRP $58,065 minus $3,000 discount = $ $55,065.
Sales Tax 7%, Tire Tax $1.25 and Doc Fee of $150.00.
Final purchase price: $59,070.80
Special Finance Rates (With approved credit)
3.9% 24 - 36 months
4.9% 37 - 66 months
You should be getting a much better price off of MSRP than that, from my experience. In mid-October (before the price increase of $1300), I paid $56,551 on a MSRP of $63,485.

The old adage is to always go from dealer invoice up and not MSRP down. Tax and doc fees are always going to be there, so don't figure that as your "price." Just get an actual purchase price before taxes, etc., established with the dealer first. Then after that, tell them you're interested in financing, etc..

Dealers need to sell cars, you're in a position to be able to get a really good deal now. That's why I decided to get a car. MB is giving good trunk money to dealers, be sure to count that in, too.

And if you can join a credit union, you might be able to get better financing for an auto loan.

p.s., the dealer didn't seem to care if I was leasing, buying, financing thru MB or my own bank. The first thing we did was get a purchase price figured out and then pretty much went from there.

I bought my car this time only because I'm planning to put a lot of miles on it in a short time and keep it for longer than usual......
 

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Discussion Starter #19
BelaB, the dealership I'm working with is heavily promoting the lease option this month. I don't know why the purchase price is set so high. If I did the calculations right, if I paid for the lease and then opted to buy at the end, I'd get the car for about 54K in all if I chose to purchase.

That is why I am wondering if I would be offered a lower purchasing price than its residual at the end of the lease. Has anyone in here been offered a significantly lower price than the residual amount of the car at the end of a lease?

I wonder how likely it would be that I could get the exact car I wanted: color, options if I waited longer to buy a 2009. I wonder if they will be heavily discounted by mid next year.

Steve, thanks for the tip about looking through Craigs List and Newspaper. I didn't think about that.

Waskier, it sounds like I need to do more research on my own in order to know if I am getting a good deal on the lease or not. I also need to know exactly what my strategy is too. I will be hearing from my accountant shortly to see how the numbers work and how favorable the lease deduction could be for my business for the 2008 tax year.

Rocky Raccoon, thanks for reassuring me that whatever decision I make will be the right one! I hope that is the case. I just want to make the best informed decision possible.

Again, I appreciate everyone's thoughtful input.
 

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It's a risk you bear to assume you'll be able to purchse the car at the end of the lease lower than the residual - though it's been happening now because the car sales are so terrible - I would not play that game because you'll pay more than you need to -

If you don't have plans on keeping the car for more than the term of the lease and then lease another one at the end of this lease why buy it? -
iI would never sell investments at this point to purchase a depreciating asset such as a car (even a great car like the E) - in the end, there is no right or wrong answer - if you plan on driving this car for say 10 years, then buy it - my guess is you can find a dealer on the net that will give you a much better buy - there are thousands of E cars sitting in the port in LA according to the news - If you don't have a bias against a year old E still in full warranty you can save yourself 20K or more - check out the listings for 07's and see how they've gone down in price - and, there are loads of them out there - however, some could never accept buying a used car - I used to feel that way but now I would never buy a new one

Steve

BelaB, the dealership I'm working with is heavily promoting the lease option this month. I don't know why the purchase price is set so high. If I did the calculations right, if I paid for the lease and then opted to buy at the end, I'd get the car for about 54K in all if I chose to purchase.

That is why I am wondering if I would be offered a lower purchasing price than its residual at the end of the lease. Has anyone in here been offered a significantly lower price than the residual amount of the car at the end of a lease?

I wonder how likely it would be that I could get the exact car I wanted: color, options if I waited longer to buy a 2009. I wonder if they will be heavily discounted by mid next year.

Steve, thanks for the tip about looking through Craigs List and Newspaper. I didn't think about that.

Waskier, it sounds like I need to do more research on my own in order to know if I am getting a good deal on the lease or not. I also need to know exactly what my strategy is too. I will be hearing from my accountant shortly to see how the numbers work and how favorable the lease deduction could be for my business for the 2008 tax year.

Rocky Raccoon, thanks for reassuring me that whatever decision I make will be the right one! I hope that is the case. I just want to make the best informed decision possible.

Again, I appreciate everyone's thoughtful input.
 
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