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2013 and earlier-Mercedes-Benz S-Class Lease Questions

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Comments

  • Sounds like either you've been listening to a dealer too much or are a dealer yourself. There haven't been any such announcements by "the Germans." The dollar is actually growing very strong, and it's the euro that is crashing. If our economy is bad, very few people are buying cars. If very few people are buying cars, raising the prices means that the automakers would suffer even more. The future is only going to bring more discounts as the dealers realize that barely anyone wants their gas guzzlers.
  • Skrontz,
    Yes I am a dealer. I work for a BMW dealer, and I worked at Mercedes Benz before this. August 1st BMW did announce what I wrote before. Discounts will not happen as lightly as you think. Every company is in business to make a profir, and the profits bmw and mercedes are generating lately are not that good. Especially when they are taking huge hits on the lease turn ins. Go to bmw or mercedes benz websites in Germany and see how much an s class or 7 series is in euros. Its about the same. Plus they pretty much buy all their cars in europe so residuals really dont come into play, and the extra cost of shipping and insurance, blah blah blah. Mercedes Benz and BMW were once considered a high line vehicle, and were not mass produced as they are now. over the past 2 months BMW residuals have dropped 5-8% across the board. Leases have actually gone up. The car business will change dramaticaly in the next year or 2. Oh and the msrp of the vehicles for 2009 has increased already. The only thing that is going to happen is alot of dealers will be closing shop, because they will not be able to sell as many cars, I know you probably dont care, but the less dealers, the less chance for you to shop from dealer to dealer, which means less discount. I am in a bullet proof area in terms of the economy, but many many dealers will be hurting in a big way. We can talk more about this in about a year. Plus how cheap do you really expect a $90,000 S-class to get?? Its not meant for everyone to have one in their driveway.
  • Profits are made by either selling something exclusive at high margin or through sales volume. The reason Mercedes and BMW are not making good profits is that their cars are no longer as competitive as Lexus and other similar brands are. It's no secret that the MSRP for a new Mercedes in Europe is way higher than in the States. The reason is that the most of the sales are made here, and raising the price too much would scare away the buyers and drive the volume down. You can't be very profitable on a non-mass-produced high-line vehicle (see Bentley for a perfect example). You have to drive sales volume, and -- hence -- you need to stay competivie in terms of pricing. The MSRPs on 2009 BMW or Mercedes models didn't increase. Actually, the S550 is now cheaper since several former options are now standard (Premium Package I and Wood/Leather Steering Wheel). The inflation itself means that they are 5% cheaper than a year ago. I don't care for the dealers since there will always be competition. If you expect that people would line up to cash out $100k for a rapidly depreciating asset during a severe and prolonged economy downturn, you're in for a huge disappointment. The dealers in "bulletproof" area that I live in right now haven't sold a single 2008 S550 at least for the past 4 months. I expect to buy an S550 slightly above the invoice (and even then, barely anyone would buy it). After all, the most margin is made on warranty repairs, not the initial sale.
  • I am not sure of Mercedes MSRP's but BMW did go up. I dont know what "bulletproof" area you live in, but my local Mercedes dealer is selling s550 like Pez candies. The reason some of those options have become standard is because the longer a manufacturer produces the same product the cheaper and cheaper it gets to produce the vehicle, so they can give the consumer some standard options. For BMW the US. is not the number 1 market, but Europe is, so they fill production for Europe and then we get the rest. Like I said before we can argue about this for ages, but lets give it a year, and talk again.
  • OK, let's take a specific example. Back in 2006, I bought my dad a 750Li. The MSRP was slighly over $93k. I just built the same model on bmwusa.com and it came out to slightly over $90k. Bake in the inflation, it went down a lot. Which MSRP are you referring to? I'd like to see specific figures. I live in California. The only area S550s are selling well is probably NYC. Not to worry, soon enough those investment bankers will be trading them in to help the balance sheet ;-) Come on, do you really think it costs Mercedes $90k to build a new S550? It's not about transfering the savings to the customer, it's about staying afloat when a Lexus offers twice as many toys at a fraction of the price. As far as BMW selling in Europe, here's a quote for you (you can Google it for the source):

    "The USA remained the largest single market for BMW and MINI cars in 2007. With a sales volume of 335,840 units (2006: 313,603 units /+7.1%), the BMW Group sold more vehicles there than ever before."

    We can argue for ages, but somehow I'm the one who keeps getting the facts right ;-)
  • BMW's number one market is the US. Not europe. Audi's number one market is Europe. You can see their lease rates are not good compared to BMW. I was told by a BMW dealer that Audi A6 sells more in Germany and in europe than the BMW 5 series.
  • So what? Didn't find anything on the supposed MSRP increases you mentioned. I can post any rumors I want in my blog, too. One needs to look at the facts, not rumors.
  • These are not rumors in a blog. Being in the car business, we sometimes have info that maybe the general public doesn't have. Just maybe for once you can listen instead of trying to be right all the time. I dont know what you do for a living and dont know the ins and outs of your business, but I am glad you know everything that pertains to mine. I just hope you dont work for Lehman Brothers, but if you did, it would explain alot. At least one of us does. You are right, I am just a dummy manager in the car business, and really know nothing about what I do. I hope all your car buying needs in the future are wonderful, and may you get all your cars from now on at triple net. Enjoy !
  • I have just leased a 2008 S550 throuh Mercedes-Benz Financial and they charge me $1095 Acquisition Fee.
    Does different bank set their own Acquisition Fee?
  • paotron - Each bank charges a different acquisition fee - Mercedes charges $795.

    Matt
    eights38@gmail.com
  • I normally purchase my cars but have been offered an interesting proposal from a large leasing company that gets fleet pricing at a 6.7% discount with a 10K rebate which is 2.7% better discount than what I can do for a cash price. Their trade in offer is $3K better than the dealer. I plan on purchasing the car at the end of the lease so they have proposed a 48 month lease at the same cash outlay as a 60-63 month finance payment totaling $92,000. I plan on taking title to the car. I am concerned that the dealer will not honor service entitlements such as loan cars if it is sold to the leasing company first. Sales tax in TX (6.25%) is paid on the full value of the car at lease commencement, not your monthly payment, and then again on the residual should you purchase at the end of lease. Leasing company says they will offset these with tax credits and thus the value of my trade in becomes $22,500. Hmm? Here is the deal:
    If I lease with an option to purchase:
    MSRP $92,720
    Less discount & rebate $16,212
    Less trade in $16,000 ($6K to be applied to upfront costs, $10K rebate to me)
    Total Car Price $60,508
    Cash back $10,000
    6.25% Sales tax to be wavied by offseting tax credits (this is new to me and a concern)
    48 months
    $1200 per month
    Residual $28,000
    Money factor 0.00219

    Finance purchase from dealer:
    60 month
    $1330 per month
  • I heard from 2 DEALERS today that MBUSA is going to increase the MSRP on all cars and SUVS by 5% starting October. Invoice will also be increased by 5% as well. They said this is due to the $ going down due to the economy. Has anyone heard this? Since 2 dealers are saying this I figured this is true.
  • What is this lease company?
  • Skrontz,
    I work for a dealer in the northeast. I am presently at BMW and worked for Mercedes before working here. Both Benz and BMW did announce that. BMW also announced that they will be shipping 40,000 less cars to the US for the next model year. Considering 230,000 sold in the US last year that is a pretty big number. I went through this with someone else a few weeks ago, if you read a few pages back you can see the whole thing. Unfortunately, I am a dealer and no one wants to believe me. We will see next year how things pan out. Just to give some advice, I recommend that if you are in the market for a new car, do the deal sooner than later, just in case the germans decide to raise all prices, and lower production like they plan. The rest I leave up to you.
  • I just wish you would check the facts before posting. The dollar is going up, not down. The European economy is just starting the dive. The MY2009 prices were set in the summer when the dollar was about 10% cheaper than now.

    Yes, of course, since two dealers said something, it gotta be true! Did they also mention, by any chance, that the Earth is flat?

    MB cannot afford to increase US prices right now; not during one of the worst downturns. Their worldwide sales will be down the drain this and next year anyways.
  • For some reason, I have to re-post the quote from the previous page:

    "The USA remained the largest single market for BMW and MINI cars in 2007. With a sales volume of 335,840 units (2006: 313,603 units /+7.1%), the BMW Group sold more vehicles there than ever before."

    Where did you get the 230k figure from? Where did you get the information about the production cut? While I wouldn't be surprised that it's the case considering the fragile market conditions, I'd prefer to see a link to the source.

    Yes, of course, why don't I go and dump $100k of cash into a rapidly depreciating asset right about now. Cause there're lines forming at every dealer, you know.

    Please look at what GM is going through right now (employee pricing for everyone, huge rebates, etc). Very soon, MB and BMW will be forced to do the same just to survive. That's my prediction; the time will tell who was right.
  • Skrontz,
    I must say, you are one of the most positive people I have ever had the pleasure of knowing. Everything will be much better as the years pass. Why would you even bring GM into this discussion? They are doing EP because they want you to buy the car, and not lease it. Go there and see what a lease number is on any product they have. It will knock you off your feet. OK, I did mistype the 230,000 number it is actually 290,000, we are not counting Mini in this discussion. 40,000 less BMW's is a big drop. This was said on August 1st and thats is BMW's stance now. If it will change in the future, no one knows. But for you to be as positive and upbeat about how cheap cars will get in amazing to me. Everything around you in life is getting more and more expensive, and harder and harder to buy, yet you think cars will get cheaper. Why? How do you come up with this conclusion? Like I said in the previous page, we should not argue about this, because only time will tell. I just think that the next year will be very interesting for the car business.
  • Thank you, I am in fact a very positive person. However, what I'm talking about here is as far from positive as it can be. While I agree that everything will eventually become better, it may become pretty bad first. Actually, it's already pretty bad. There's a very good reason I'm bringing up GM. And no, GM doesn't really care whether you lease a car, finance, or buy it with cash. In fact, GM gets the full value of the car right away. It's the bank who is bringing the dough to the table and who owns your car. And the sad reality is that banks are no longer willing to give out loans. And it's not only true for the cars: banks don't even want to give money to each other. People with 800 FICA scores, tons of cash on hand, and great jobs are unable to get good financing on a brand new house. In this situation, buying an expensive car with cash (provided, there's no financing available) is last on their wish list. Check out this recent article:

    (It won't let me put a link here, but google "2nd UPDATE: US Auto Sales Slump Again; GM Outperforms")

    Notice how GM is the only one staying ahead because of their deeply discounted pricing? Here's another piece of information for you: what we had unrolling in the US for the past 12 months is just starting to hit Europe. And it may be way uglier there than here with 13 countries pulling on the single currency and the consumer being squeezed beyond belief. And you bet your boots the luxury automakers will suffer most as people struggle to make the ends meet.

    What is getting more expensive? Aside from commodities, nothing really. When was the last time you saw this great 60" plasma TV go up in price? Prices are determined by supply and demand, not how much of a margin you want to make. Yes, it became very expensive to eat. And it will likely get worse. When you're hungry, you don't exactly go out there and buy this great imported vehicle that just went up 5% in price. In times like this, people buy affordable Ford instead of a flashy BMW. I wish luxury cars were in high demand, but with those poor investment bankers literally out on the streets it'll be awhile before we see lines at the dealers.

    I just noticed that MB indeed increased all MSRPs for 2009 US models by about 2.3%.My guess is that the change was planned sometime back in August when things weren't looking so bad. Right now, the euro is plunging and the credit crunch is spreading. I give them 3 to 5 months before they cave and do what GM is doing now to stay afloat. Unfortunaly, 50k+ gas guzzlers with no good financing available is not exactly what the consumer is craving for today.
  • mbzlvrmbzlvr Posts: 14
    I got my 2009 S550 in mid-August and at that time the base MSRP was $87k. I noticed yesterday that the base price at MBUSA website is $90,225.
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