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32929In your explanation, you say to multiply the MF by 2400 to get an approx. interest rate. On the Bluetec Diesel for March it was posted as .00225, which would equate to an approx. interest of 5.4%. If I do the calc based on the March info and assume a cap cost of $52,000 and a term of 36 months I get:

52,000 X 55% = 28,600

52,000 - 28,600 = 23,400

23,400 / 36 = 650

(52,000 + 28,600) X .00225 = 181.35

650 + 181.35 = 831.35

Now, If I were to assume that I could make a lump sum for the depreciation of $23,400 and amortize over 36 months at 5.4% (the approx rate) I come up with a payment of only $705.53. To get to the payment of $831.35, the actual assumed interest rate is approx. 16.75%. That is based on amortizing the depreciation of $23,400 over 36 months (Assume you were to bouy a car for $23,400 and pay it off over 36 months, to equate to a monthly payment of $831.35, you would basically be getting charged 16.75% by the bank). Is there something amiss in the above calulcation?

At a payment of $831.35, you are paying a total of $29,928.60 when you are theortically using $23,400 of the value of the car. Total interest is $6,528.60. At $705.53, you are paying a total of $25,399.08, so total interest is $1,999.08.

33,014When you lease a car, you are borrowing the whole amount, not just the depreciated portion... Even if you paid the entire depreciation upfront, you'd still owe a finance charge each month.. In this case:

$28,600 (cap cost) + $28,600 (residual) X .00225 MF = $128.70 per month...

Hope that helps..

kyfdx

MODERATORPrices Paid, Lease Questions, SUVs

29i understand what you are saying. the one fundamental problem I've always had with leases is the concept of paying interest on the residual. The residual theoretically represents the value of the car at the end of the lease. When you turn it in, that should represent what the dealer could then sell it for to a new buyer. At that point, they would then charge interest on that value to the new buyer. By also charing interest to the lessee, they have, in effect, double charged the interest and recorded more profit. That is whay the actual interest rate I arrived at is 16.75% when you strictly look at the value the lessee is supposedly deriving from the car over the term of the lease.

Not saying leasing is bad, by any means. there are deals to be had and you can always work a better one. there are other factors, too, that make leasing more attractive than buying. But the rates can be a bit harsh when viewed pragmatically in comparison to the value derived.

With all that said, i still want to try to work a lease deal on a new Bluetec, potentially. We'll see what happens.

33,014First... the dealer does nothing but sell the car to a bank.. what happens when the lease is done really has no effect on your deal.

In essence, you are taking out a loan for the full amount of the selling pricee, and paying the loan down to the residual, at which time you sell the car for what you owe on it (actually turning it in, but the same concept).

There is no double interest or additional profit. It is no different than if you bought the car, then sold it to a private party after 3 years.

But, leasing isn't for everyone!

regards,

kyfdx

MODERATORPrices Paid, Lease Questions, SUVs

30425309I am looking at a 27 month 15k mi. per year lease.

.00150 and .62 and .00120 and .59 are the two I was quoted.

What are the real numbers from Mercedes Financial?

Thanks.

155Is this a good deal?

2008 E350

Sport Package

PII

Parktronic

Panoramic Roof

Ipod Kit

Window Blinds

Electronic trunk closer

MSRP: 60540

Selling: 55300

MF: .00085

Residual: 64%, 10,000 miles/year

Monthly $750 with CA tax

Thanks!

13341052,000 X 55% = 28,600 "

this part of the calculation is not correct. The residual is based on MSRP not your cap cost (so if the MSRP is 56000. The residual is 56000x55%)...

"$28,600 (cap cost) + $28,600 (residual) X .00225 MF = $128.70 per month... "

Kyfdx, this calculation is not correct.. the original one is the correct way to calculate the rent (or the finance cost) ...

Also don't forget to roll your acquisition cost and dealer doc fee either into the lease or the upfront payment.

I think this information from Leasecompare.com will help...

(Cap Cost – Residual Value) / Term = Depreciation

(Cap Cost + Residual Value) X Money Factor = Interest

Depreciation + Interest = Base Monthly Payment

3042542533,014The biggest misconception about the finance charge is that it only applies to the amount of depreciation, when in fact, you are borrowing the whole car, not just the part you use up..

MODERATORPrices Paid, Lease Questions, SUVs

1Also, are there any hidden (dealer) incentives on these cars right now?

Thanks

42524 M – Residual 65% – .00150

36 M – Residual 55% – .00225

48 M – Residual 46% – .00225

60 M – Residual 42% – .00330

Posted residuals are indicative of 15k annual miles. Add 2% for 12k, add 3% for 10k.

Finance Special:

1.9% APR (terms up to 72 months)

Hope that helps.

Btw - diesel was $5.09/gal in SoCal today (ouch!)

33,014Btw - diesel was $5.09/gal in SoCal today (ouch!)Still sunny and high '70s, though, I bet..

MODERATORPrices Paid, Lease Questions, SUVs

425Got three rounds of golf in last week though, when it was sunny and 95 (nice breeze though)!

9Thank you.

42524 M -- Residual 59% -- .00100

27 M -- Residual 59% -- .00120

36 M -- Residual 50% -- .00175

The cap cost you mentioned ($86,940) in your previous post looks very aggressive. If you opt for the 27m/15k term, you'll be around $1300/mo + tax. Standard drive off costs will apply.

Hope this helps...

9425In this case, there is $2000 on the table (dealer does NOT have to share this with you), but he most-likely will pass it along to you in the form of a cap cost reduction if you let him know that you're aware of it.

Good Luck!

1Lease ends March 2009.

The seller pay the changeover fee to MB Financial...

$0 down.

Monthly payment = $480.03/month including sales tax

Residual $39,272 (plus $595 turn-in fee if not purchased)

11,000 miles remaining through March 2009

$500 cash incentive up front.

Is it good deal? What should I ask him more?

42521It can be a good way to get a short-term lease with no money down. Check swaplease.com as they have thousands of people trying to get out of their leases. Again, I would use caution because if the car messed up in any way you could be stuck. There are inspection companies that you could hire to look the car over before you assume the lease. You can find them on the internet.

52008 E350

P2

AMG Package

Panoramic Roof

Ipod

Rear Window Blinds

Electronic Trunk Closer

MSRP 61370

7500 miles/yr

27 months

$650/month including 8.5% CA tax

$1200 drive off - First month, Tags/Title, Doc fees