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Mercedes-Benz R-Class Lease Questions

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  • akinakin Posts: 24
    Do you really think that is a good deal? Let me understand this:

    $499/month X 39 months = $19,500
    plus you need to put down $9,000

    For a grand total cost of $28,500 or monthly cost of $730.

    And that cost does not include tax or anything. Do you really think that is a good deal?
  • raj904raj904 Posts: 2
    It does sound good, because the residual value is about 27K-28K. Thus, If I leased it and then exercised the buy option, I would save almost 8K off the MSRP, which I can tell I cannot get from the dealer. I have one more question. In a deal like this, what is negotiable? the payment per month is fixed, but is anything else? do the dealers negotiate on the resale value?
  • From much perusing of these boards, I've also gathered that these cars are not selling well. One local dealer was willing to go with the $499 month with $3995 down as on MB website. By the time I added in 12K/yr instead of 10K, it was up to $517/mo payment. OK not bad... But the car didn't have anything except Parktronic on it. White with beige. I already have a beige interior and was hoping for black. Only other car was 65K Saks edition... too much. The other local dealer didn't even respond to my emails (this was the one I test drove with).

    I live in FL. Co-workers bought 2 MB from dealer in Ohio (one's a relative) getting great deals. A E350 sport and a CLK 350. He got me my R350. This is my deal:
    $3000 down, includes 1st month payment. MSRP of 56305, getting the car for 8500 less, basically the $5000 dealer incentive discounted from invoice price of 52719. I got everything I wanted: Parktronic & Premium, Pewter with black. Bonus of heated seats, not needed much in FL, but I still use them in my C240 on winter days. Got the paperwork by Fed EX and payments were 518, including tax. Oh yeah, that includes 12K/year for 39 months. I'm very happy.

    So, go for the 499 but don't put down the 8000.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    HI jccssc888. Dealers are having a hard time giving the R-Class away right now. This works to your advantage as a consumer because Mercedes-Benz has been forced to provide quite a bit of support on it and dealers aren't making much on them. If you were to lease a 2006 R350 through Mercedes-Benz Credit right now for 39 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00285 and 60%, respectively. The best part about the incentives that are currently available on this model is that Mercedes has $5,000 dealer cash on it. Make sure to use this month to reduce the capitalized cost of the model that you are interested in.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey L Price. The most important thing to keep in mind when negotiating a lease on the R350 is that Mercedes-Benz is currently providing $5,000 dealer cash on it. Make sure to take this cash into account when negotiating the capitalized cost of the model that you want. As far as its lease program goes, if you were to lease one through Mercedes-Benz Credit right now for 24 months with 12,000 miles per year, its buy rate lease money factor and residual value should be .00310 and 72%, respectively.

    The impression that you got about this being a slow selling model is absolutely correct. You can use this to your advantage by negotiating a low selling price. The selling prices of leased vehicles are negotiable, just as if you were paying cash for or financing them. I suspect that you should be able to get an R350 right now for a little over invoice minus the $5,000 dealer cash.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi Raj904. It definitely is not a good idea to make a $9,000 down payment on the lease that you are considering. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your R350 would be exactly the same, regardless of whether you had put $9,000 down, or had made absolutely no down payment at all.

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  • Hi,

    thoughts on the R-class 500. dealer would give 4% back on top of 5000 rebate from MB. Looking at 39 months with 15,000. what should i use for money factor and residual factor. Initially they offered me $608 a month.. thoughts on 1.9% financing? Thanks
  • aau007aau007 Posts: 5
    I read the postings here for a while before getting my r350 lease today. I learned so much information here and guess I will share mine with others for reference:

    R350 with MSRP of 58415
    36 months, 12k miles per year
    $659 including tax per month (8.25% sales tax)
    1st month only as total drive off
  • zaheerzaheer Posts: 23
    I have been looking at the R350 as well since the $499 deal came out. I assume that you did not have a trade-in and included the DMV fees in the Gross Cap Cost. I don't have all the information so I am making some assumptions, but by plugging in your numbers in the Lease Formula, I came up with the following:

    Assumed Gross Cap Cost (including DMV) - $52,065
    Your Residual Should Be - $36,217.30 (62% for 12k miles per year)
    Money Factor - 0.00191
    Depreciation - $440.21 per month
    Rental Charge - $168.62
    Total - $608.83
    With Tax - $659.06

    If your total drive-off was $659, this is quite a good deal since the dealer does not seem to have bumped up the Money Factor from the Ad car. Most of the dealers that I have spoken to in the Bay Area want a Money Factor of .00285 which adds an additional $75 per month to the payment. This violates the terms of the Ad. The Ad car (on www.mbusa.com)has a Residual of 63% (10k miles per year) and a Money Factor of 0.00191. Note that this is a National Ad and does not state that a limited number of cars are available at this price. Theoretically, Mercedes must honor the terms of the Ad even if the car has a few more options. Be careful with dealers that bump up the Money Factor on cars that have more options. I have not been able to find a car with just the Premium Package. I'd like to hear what others experiences are regarding this deal.

    Zaheer
  • zaheerzaheer Posts: 23
    According to my calculations, the Money Factor is 0.00191 on the Offer through mbusa.com. The residuals on this car based on mileage per year are the following:

    10k miles - 63%
    12k miles - 62%
    15k miles - 60%

    Dealers may try to lower the residuals so that they can get a better return from MB Credit.

    I would use the 0.00191 MF and the $5,000 Cash-to-Dealer when making a deal. This is what Mercedes is advertising until March 31st.

    Zaheer
  • aau007aau007 Posts: 5
    My MF is 285 which comes right off the ad special. Another dealer wanted to mark it up to 310 and I did not go for it. The dealer gave me an awesome price on the vehicle to bring the monthly payment down to 659. msrp is 58415, MF is 285, term is 36 months 12k mi. per year, sale price of vehicle is roughly 48115. Yes, residual is 62%.
  • aau007aau007 Posts: 5
    BTW, when I did a reverse calculation from the AD, the MF is 285, which correspond to what the dealer gave me.
  • zaheerzaheer Posts: 23
    I stand corrected. The Money Factor in the ad is 285. I assumed incorrectly that the Gross Cap Cost provided by Mercedes included the $2,700 Cap Reduction. Apparently, they are offering the car at a much lower price than I thought! You can reduce the MF, increase the Residual, or reduce the Gross Cap Cost to get a lower monthly payment.

    I finally found a dealer who was willing to apply the same terms as the ad. I am picking up my R350 tomorrow. Will let you know what kind of deal I get.
  • aau007aau007 Posts: 5
    I have realized that some dealers in S. Cal. are willing to even absorb the 2700 cap reduction, wholely or a big part of it. I moved a step further though. My numbers show that the dealer sold the r350 at under $10k below msrp with "other credits". No trade in either.
  • zaheerzaheer Posts: 23
    Here is my final deal through Mercedes of Oakland, CA:

    Color: Alpine Rain / Black
    Options: Premium Package, Comfort Package, Trim Package (includes Leather Seats), Sirius, 3-Zone Climate Control, Heated Front Seats
    MSRP: $60,455
    Sales Price: $49,852
    Net Cap Cost: $50,816.31 (includes Acquisition Fee + Doc Fees)
    Residual: 62% ($37,482.10 for 12k miles / year)
    Term: 39 months
    Money Factor: 285
    Depreciation: $341.90 / month
    Rental Charge: $251.65 / month
    Total With Tax @ 8.75%: $645.49 / month
    Drive-off: $1,040 (1st month's payment + DMV)

    I have a relative working for Daimler-Chrysler so the price includes an employee discount. Was this a good deal ?
  • mishmash1mishmash1 Posts: 16
    Zaheer,

    This seems like a terrific offer! I wouldn't mind one myself. However, I unfortunately don't work for Chrysler. Can you tell me the employee discount so I can add it back in? thanks.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi chucky380. If you were to lease a 2006 Mercedes-Benz R500 through Mercedes-Benz Finance right now for 39 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00285 and 59%, respectively.

    Mercedes' 1.9% financing offer for this model is a good deal. The only problem with it is that it is only available for terms up to 3 years. If you want to finance for 4 years, the rate increases to 3.9%. For 5 years it jumps to 4.9%. Financing such an expensive vehicle for 3 years is going to give you one heck of a large monthly payment.

    Car_man
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  • euyesakaeuyesaka Posts: 2
    I missed the 3/31 special so would like feedback from anyone who is looking at lease deals now. I got indications from a MB dealer in SD County as follows -

    R350 White/Macadamia with Premium pkg
    39 mo. lease
    15k and 18k mileage options
    $0 down and $3k down

    here is what I got -
    MSRP = $56,760
    Invoice = $53,441
    Sales Price = $49,000 (rough)
    15K miles @ $0 down = $725.23 + tax
    15k miles @ $3k down = $639.74 + tax
    18k miles @ $0 down = $770.44 + tax
    18k miles @ $3k down = $684.90 + tax
    Money factor on 18k miles was .00315; don't yet have MF on 15k miles

    Any getting better deals post-3/31?
    Thanks, EU
  • zaheerzaheer Posts: 23
    The employee discount was approximately $1,800 from invoice. Here is the breakdown:

    MSRP - $60,455
    Invoice - $56,604
    After employee discount - $54,804
    Final price after all discounts - $49,852

    Some dealers were willing to discount the R350 by $6,500 - $8,500 off MSRP until March 31st. I don't know where things stand now.

    A few tips from my experience:
    1. Talk with the Fleet Manager only, even when you go to test drive the car. Avoiding the Sales staff will save you their commission and the hassle of going back and forth. The Fleet Manager can make quick decisions.
    2. Negotiate price and terms on the phone at home with the Lease Formula in front of you. This removes you from the pressure at the dealership and having to decide solely based on monthly payment (which can be manipulated in several ways).
    3. Make sure you understand how Money Factor, Residual, and Cap Reduction can affect payments. Your goal is to only have the 1st month's payment as drive-off.

    Hope this helps.
  • mishmash1mishmash1 Posts: 16
    Thanks Zaheer,

    Your info was very helpful. I just negotiated a lease based on your deal and found it to be very helpful. I wasn't able to get $9000 off msrp as you did but I did come close. I will get you and others the details after I take delivery. Thanks again.
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