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Mercedes-Benz E-Class Lease Questions

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Comments

  • ob995ob995 Member Posts: 40
    edited April 2010
    The standard rate is 0.00275 currently but dealers are free to mark up or down the rate as much as the want. If the mark up the rate from the standard program offered on that car, they get a bigger commission from MBF for getting the customer to agree to a higher rate and if they mark down the rate the commission paid to dealer would be less as well. I have no idea if MBF pays the dealer less based on MSD or not tho and MBF might ding the dealer after 1 security deposit which is why dealers do not advertise or even advise customers of that possibility. And if you credit is above 720 MBF will even waive the security deposit requirement to get "base" rate which is the published rate which on an E Class Sedan is 0.00250
  • poorprofpoorprof Member Posts: 124
    edited April 2010
    substantial loss to them. This is not lip service, they reaally did. So my payment went up a little, but a better deal overall. Ob is absolutely right. MB fiance turned down my contract for the same reason (too low an MF to apply MSD to). The 0.0025 is the absolutely lowest rate dealers have. Beverly Hills MB was very professional about it. They worked out a nice deal for me at substantial loss to them. This is not lip service, they really did. So my payment went up a little, but a better deal overall. Of all the dealers I talked to, they ended up giving me the nest deal and then made up for MB finance. Just ask for their fleet manager.
  • outieoutie Member Posts: 42
    Thanks guys for all the information. It all makes sense now. Apparently the way MSDs work is very different from BMW and Mercedes. With BMW, you can buy down the MF with their published buy rate. With Mercedes, you can't use MSDs to buy down the published buy rate, but only the hidden standard rate.

    I have asked several dealerships and some of the financial departments don't even know about MSDs and some have a substantially marked up rate of 0.0035. The only one that knows some of it is Beverly Hills but even they cannot give me a rate I expected with 10 MSDs (0.00275 - 0.0007 = 0.00205, but BH says they can only do 0.00217). I guess at this point the best option is to wait for May's rate to come out on the 4th.
  • poorprofpoorprof Member Posts: 124
    Outie:

    The downside of waiting is that the RV may go down. They have held the RV the same for almost 5 months into the production year.
  • outieoutie Member Posts: 42
    edited April 2010
    That's true. However, the RV for the new 5 series is 61% for 10k with a .0025 as well. I don't know if that would make MB stay with a higher RV.

    I will wait for this dealer to get back to me tomorrow. They are willing to have the finance director to call MBFS to find out more info, which I really appreciated. If they can do the same as BH, I may just go with them since BH does not have the car I wanted, otherwise I will have to wait for May. We'll see & thanks again.
  • boomboom4boomboom4 Member Posts: 10
    This is the lease that was accepted by my local dealer. Tell me what you think.

    2010 e350 RWD/palladium silver/p1/wheel package
    MSRP 54895
    cap cost 50870
    Acq 795
    cap cost reduction 2000 loyalty
    Adj cap cost 49965
    residual 32216
    MF .0018
    term 39 months
    taxMI 6%

    594=35.69= 630.49

    MSD(10) reduces mf by .007 to get mf of .0018
  • outieoutie Member Posts: 42
    edited April 2010
    Are you sure your dealer accepted the 0.0018 mf w/ MSDs? That's the topic I've been discussing with other members in the last few posts. I have asked several dealers here and none of them could reduce the MF from the 0.0025 rate with MSDs. It's simply not allowed by MBFS. Even the dealer that originally accepted it later called poolprof that MBFS rejected it and he had to settle for a higher rate.

    Which dealer is this?
  • outieoutie Member Posts: 42
    edited April 2010
    Hi ob995, assuming credit is above 720, is it possible to get the .0025 to .0018 with 10 MSDs if no dealer mark up? I read in the M-class forum that car_man said the dealer must be lying if they say can't go down from the special/base rate. Thanks.
  • ob995ob995 Member Posts: 40
    edited April 2010
    My understanding, I am not a dealer, I just happen to lease lots of vehicles, both personal and company cars for my business is that what ever bank, say MBF sets certain residual and money factor for each car. The dealer is free to mark up or down the money factor as he see fits, except by doing so the commission the dealer earns from the bank is either lower or raised based on the difference between the base rate and the rate you agree.

    For example on E-Class Sedan the base rate is 0.0025 and you are required to have a 720+ credit score to obtain that rate without a deposit, if you have say a 705 credit score if you want the 0.0025 MF you will be required to put down a security deposit.

    I honestly do not know the effect of putting down multiple security deposit on the dealer commission or if the dealer indeed takes a hit on his commission if you put down more than 1 security or the MF goes below the base rate.

    In theory the dealer can do whatever he wants, but at some point, the dealer is going to refuse to do the deal because he will make no money on the deal or might have to pay MBF to write the lease, if the dealer choose to buy down your rate, he free to do so but that will require him paying MBF some money upfront, just like some times the home owner will pay any points associated on mortgage so that the buyer will get the rate in offer so that the home will close.

    It could be very possible that the par rate on E-Class Sedan is 0.00240 and at the base rate the dealer makes $500 commission from MBF but for example, if the dealer writes a lease for 0.00230 he has to pay some points to MBF to buy down the money factor, no how many points or how much each points costs as I made up the $500 commission above to show an example and most dealers refuse to pay points to MBF to buy down the rate especially if they are already selling the car invoice as the only profit they are making on the sale is premium paid by the finance company and the trunk money which is normally half as much as the difference between invoice and MSRP.

    Dealerships are not a charity, they are a business just like any thing else, so if they are already selling the car at invoice they need to make money somewhere on the deal, ie financing and trunk money and they are going to give you that money too just to move the cars, as selling car for no profit at all means they will not have jobs for much longer so their is only so much of a discount you can get from the dealership before they tell you to take a hike.

    Hope that makes sense to you.
  • outieoutie Member Posts: 42
    edited April 2010
    Thanks for the explanation. I totally understand where you are coming at regarding the dealer buying down the rate.

    However, I was under the impression that the MSDs program is offered by MBFS, so the dealer does not need to buy down the rate. I do believe that there exists some commission between MBFS and the dealer and it's affected by MSDs. This is why none of them is willing to do it. They are not buying it down and they are making money by selling the vehicle, so it's really hard to understand why they don't want to sell it with at least some profits on the sales side. Maybe the finance manager will get the ding by doing it, who knows?

    As a previous and returning BMW owner, it's been straightforward to deal w/ their lease program. You can easily buy down their MF w/ MSDs even when the car is sold at invoice and a base MF of 0.001xx, no question asked. I am having so much difficulties with Mercedes...
  • ob995ob995 Member Posts: 40
    The dealership needs to pay salesman, rent, light bill, etc, maybe they expect to make X amount per car sale otherwise the sale is not worthwhile. Lets assume to get that X number, they are able to sell the car at invoice but need to keep 100% of the trunk money and get their commission for financing the deal. If MBF dings the dealer for MSD's on their commission is not hard to understand why most dealers refuse to do it. Lets assume by doing 10 MSD the dealer end up getting $0 commission from MBF then the only money they made on the deal was the trunk money. On a E350 Sedan the trunk money is less about $1.5k. If their fixed cost are more than $1.5k they are loosing money selling the car. Yes they made a profit selling the car over what they paid for it, but that does not mean they made any money on the deal after factoring in their other expenses. Remember let say a dealer gets 30 E-350 Sedan and sell them all, they can not order another one if they are run as they are allotted cars based on last year sales. So by selling you a car for loss which they think they can otherwise sell either at break even or a small profit is hard for them sallow as car business is not like TV where if you sell one, you can call your local distributor and get another one in 2 days.

    I know when ever I bought a car, leased or with a car loan, the dealer always ask how I plan to pay for the car. The reason they do that is because they are taking into account the commission they will make for getting you the loan or lease. I lease and purchase lots of cars, the company I work for does not have a full on fleet department as we have 9 leased and 4 company owned vehicles and because of my knowledge and contacts I have made by acquiring of those cars for work, most of my family and friends normally ask me to help them purchase cars.

    The how do plan to pay for it always comes up no matter the manufacture. The difference I found varies between banks really. I have had some dealers tell me that they can give me a much bigger discount by using their financing over what I could get own my own some times which makes the slightly higher rate a non issue. So the commission paid to the dealers must be significant.

    Recently when I helped a friend purchase an E350 Coupe last month. My friend got pre-approved for BOA 60 month car loan at 3.2%. The fleet manager I normally deal with offered to give my friend an extra $1k off the car if he agree to use Chase 3.5% for 60 month and showed us the difference in the interest over 5 years was about $385 so that my friend was still saving just under $700 by getting Chase loan over using his pre-approved BOA loan. So I assume the dealer makes more than $1k in commission from Chase or paid a higher % based on volume of loans they send to Chase etc which made it worthwhile to the dealer to offer us a bigger discount for getting a loan via him.

    I am not defending MBF, MB or the dealer in their car practices at all. I think they are all crooks when it comes to leases as they all work the deals backwards. All the way from MB and MBF on the programs down to the dealers when dealing with customers. MF should always be comparable to what you can get a car loan for as the cost of money is the same both. Currently many leases programs have rates 1-3% higher than what you can get car loans rates at which is a joke. That is because all the manufactures make their lease programs so that they cost about the same as what their car competitors do, so even if the car you happen to leasing has a good residual they just jack up the MF so make the payment higher vs cars with bad residual drop the MF likes crazy to make up for the low residual. It seems the consumer is one getting screwed today on leases.
  • poorprofpoorprof Member Posts: 124
    edited April 2010
    I am puzzled too by the gentleman from MI who had his MF reduced to 0.0018. I have an auto credit score of 860 and left the dealer on Friday thinking I had bought down my MF 7 points from 263 just to get my contract called back because MBF turned it down. We leased two cars, the other a C Class, so they stood to lose two deals. I am sure they weren't bluffing.

    When I leased my last car from Infiniti, I bought the MF literally down to zero (0.0009) with MSD of 0.0001 for each deposit. We started at the special rate. Infiniti dealer NEVER mentioned MSD either till I brought it up.

    Anyway.... The technology on the E needs much improvement, so I will be back at in 39 months. Lane keep works so so (compared to Infiniti M class). Voice command is clunky with few direct commands. Great car and superior to the M class and BMW, but a work in progress.
  • dannye350dannye350 Member Posts: 30
    Congrats on the car. i am also from michigan. Where did you purchase your car from?
  • boomboom4boomboom4 Member Posts: 10
    They are tracking down the car, color and options that I am interested in. I had read the previous posts before I put my offer in and was somewhat surprised they accepted it. It has not gone through MBF yet so I am curious what will happen . I will let you know. My father is purchasing my off lease 2007 e350 from the same dealer in a separate transaction this week and this may have been helpful in my securing of this lease price. When I first brought up MSD a month or so ago my salesman acted like he didnt know what that was. Yesterday he also wanted to make sure that I wanted to do that so it must cost the dealer some money Quite frankly, I got tired of screwing around with the salesman and emailed him what I was willing to pay. I was and am willing to walk away from the deal if they do not honor it.
  • outieoutie Member Posts: 42
    edited April 2010
    Please keep us posted. The MF is the only factor stopping me from moving forward. On a side note, I think that's a pretty good deal if it all works out.

    @ob995: totally makes sense. I think the whole point is profit margin. If I push for $2k+ under invoice and still want the MSDs to go in, they are barely making any profit and it becomes not worthwhile to sell me the car. I appreciate all your insights in this topic. It's been very helpful.
  • jwilliams2jwilliams2 Member Posts: 910
    MBF has never (to my knowledge) allowed the use of MSDs off of any special rates. Only the standard rates. And MFs vary due to competitive situations and availability by model.

    Keep in mind that finance rates are charges for the cost of money, and once the loan is satisfied, that's the end of it.

    With leasing, the expense and exposure is much greater, as at lease end the car company usually gets the car back. And then has the expense of re marketing and faces potential losses due to the spread between residuals versus actual end of lease wholesale values.
  • outieoutie Member Posts: 42
    edited April 2010
    Good news! I just got another dealer to take 0.0018 with 10 MSDs. I made sure that is doable and he confirmed again and again w/ both the financial manager and MBFS by calling them to make certain. MBFS said NO PROBLEM. He also got me a great price $2k+ under invoice without any negotiation. I will post the details when the deal is finalized tonight.
  • poorprofpoorprof Member Posts: 124
    Does anybody know if the liability limits for insurance for an E 350 is 50k-100k or 100k-300k?
  • poorprofpoorprof Member Posts: 124
    Dont mean to alarm you Boomboom, but it looks like your dealer has not checked with MB Finance. It looks like it REALLy is their policy to only offer MSD on the higher standard rate. So your payment may go up by a $100 a month.

    Just call them and ask them to check - better safe than surprised!
  • vrmmvrmm Member Posts: 1
    Great, I will try same and let you know if I'm successful. Why are they offering $2K under invoice, and how do they make money that way?
  • outieoutie Member Posts: 42
    edited April 2010
    I was able to get 0.0018:

    E350W Palladium Silver, P2, Panorama roof
    MSRP: $57,615
    Invoice: $54,144
    Selling: $51,844
    Acq cost: $1140 rolled into lease (yes marked up but I am willing to)
    MF: 0.0018 with 10 MSDs @ 750$ each
    Residual 59%
    No loyalty/fleet discount.

    Drive off: $8977.38 including $7,500 MSDs, $1.4k title/license/fees/1st month
    Monthly: $643.5 + 9.75% tax = $706.24/mo

    He showed me their April lease paper which has all the rates. He said sure the special is 0.0025 but it is also the base rate. There was no problem to take that down to 0.0018. He confirmed w/ MBFS personally (not like other dealers I dealt with who just rely on their financial manager). It was a breeze to deal with him. We got the deal done within hours through emails.
  • poorprofpoorprof Member Posts: 124
    Congrats!! great deal!

    Which dealer was this?
  • outieoutie Member Posts: 42
    edited April 2010
    Thanks & I appreciate all your helps. Got it from Long Beach.
  • boomboom4boomboom4 Member Posts: 10
    I spoke with the dealer yesterday and they have tracked down the car I am interested in but it is in another state. They want 900 to ship it to MI. I am not real surprised that they had trouble locating a RWD in the midwest as most are AWD. I told him to let me know what other cars,colors,options are available without the shipping. I have not heard back. He reiterated that the mf of .0018 was not a problem(that always worries me when they say that). I am glad to see that another member got the same mf although I don't know how he got 2k south of invoice. Definitely a better negotiator than me. I found truecar.com to be very helpful. I will keep you informed. This forum has been very helpful. Thanks to all.
  • jplendingjplending Member Posts: 3
    Hi I just got the 2010 Eclass today. can anyone help me to take a look?
    E350 Palladium silver/premium 1/para sunroof
    39 months lease with 39,000K mileage
    4000 drive off (including 1st payment, dmv and bank fee)
    monthly 620.69 or 675 after tax

    They told me it's 2450 under invoice but not sure it's good deal or not. thanks
  • jds10jds10 Member Posts: 5
    Hi everyone,

    This is the "best" offer I've gotten, but it doesn't sound like a deal to me:

    E350 black/black premium 1
    Sticker $53,425
    Selling price $51,500
    39 months 12k miles per year
    $3800 drive off all in
    RV 58%, $ factor .00275
    Monthly of $791 (including tax).

    Stupid robust Texas economy.
  • outieoutie Member Posts: 42
    edited April 2010
    $4000 drive off for 1st month, dmv, and bank fee only? It looks like there could be some capital reduction (~$1.5k).
  • outieoutie Member Posts: 42
    I do not know how competitive is the market in Texas, but that selling price is above invoice. There may be still room for negotiation.
  • jds10jds10 Member Posts: 5
    That's correct on the cap cos reduction estimate. Going to keep leaning on them with the sale price as well. Thanks!
  • jplendingjplending Member Posts: 3
    Hi Outie

    Thanks for your reply.. Capital reduction is 2397 in this deal. is that good deal? tks
  • outieoutie Member Posts: 42
    edited April 2010
    Based on your information, this car is invoiced at $52,012. If it was $2,450 under invoice, the selling price is ~$49,562. It is best to get the exact figure for the final selling price.

    For $4k drive off, if $2397 is toward the cap cost reduction, then I think the acq fee of ($795-$1095) is rolled into the lease.

    Without paying any cap cost reduction (save that $2397), your monthly payment should be $684.46/mo + tax with 58% residual, 0.0025 MF. With 2397 cap reduction, it's $617.00. It's a little bit off but it's very close.

    If you were to put down 2.4k in cap reduction, you might as well consider applying multiple security deposits. 2.4k is worth 3 security deposits, or a reduction of 0.00021 in mf. Your monthly would be $667.09 without cap reduction.

    This is a great deal as long as they are already $2k under invoice. Good luck.
  • outieoutie Member Posts: 42
    edited April 2010
    Definitely push for more discount on the selling price.

    MSRP: $53,425
    Invoice: $50,347
    USAA no-negotiation price: $48,047 (your dealer should be able to match it)

    Assuming no cap cost reduction, acq cost/bank fee (~1095) rolled into lease, drive off only consist of first month and tags, 58% residual, MF 0.0025 (not sure if it's your credit or dealer markup if you were quoted .00275):
    $665.85/mo + tax
  • jplendingjplending Member Posts: 3
    Hi

    thanks so much for your valuable inof. My monthly payment is 675 (including tax already) i think it's pretty decent deal. thanks again for your help. Btw, how do I calcute the payment based on 0.0025 and in my case, they did collect multiple security deposit, should I offer that to make payment lower? tks
  • outieoutie Member Posts: 42
    edited April 2010
    You'll need to use a lease calculator like the one from here:
    http://www.leaseguide.com/calc.htm

    You'll also need to put in the acquisition fee under "additional costs included the lease".

    Did they collect or did they not collect multiple security deposits? If you had the money just sitting around, you should use it to apply multiple security deposits (up to 10 for a total reduction of 0.0007 in mf). You can save 30-40$/mo. It's equilvalent to 7%+ annual return over the course of 39 months. From my experience, not many dealers know about this and even when you tell them about it they don't want to do it. It's a program offered by MB Financial. The dealerships will tell you 0.0025 is their current special rate, but if they looked carefully it is also the base/standard rate which can be further reduced by MSDs. So your mileage may vary.
  • jds10jds10 Member Posts: 5
    Thanks for the input. I'm leaning on him and pitting him against another dealer. Should not be a problem.
  • boomboom4boomboom4 Member Posts: 10
    Just wanted to update you on lease of 2010 e350. The dealer in MI was not able to find a car equipped even close to what I was looking for. I have purchased many cars over the years and have never experienced such deceptive business practices and unprofessional behavior as the salesman and sales manager exhibited. There are a lot of nice 50k+ cars available. Mercedes lost a customer. For life.
  • michaelbaummichaelbaum Member Posts: 3
    You're right there are a lot of nice cars out there. But why let a dealer dictate what you drive? The dealers are all independently owned. They just sell the cars. It's easy as pie to buy a car from another dealer anywhere in the country and have it delivered locally. I've owned my 2010 350 4 Matic for four months and love it.
  • outieoutie Member Posts: 42
    edited April 2010
    I agree with michaelbaum. If you have followed my previous posts, I have dealt with 5 dealers around my area and 4 of them would not honor a straight MSD deal. Only 1 did it without giving me any trouble and gave me the best price. With my extensive research/knowledge about their lease program, I cannot stand anyone trying to play game with me. I almost gave up but I finally found the dealer I felt very comfortable working with, no BS/deceptive practice.
  • boomboom4boomboom4 Member Posts: 10
    The fact that Mercedes allows these dealers to retain their franchises speaks very poorly of the company. Not a fan of Lexus automobiles but they know how to treat their customers. Mercedes needs to figure out that people are not just buying the car but the experience as well. I remember the CEO of Rolex years back who was asked how they can sell watches that are some much more expensive than a Timex. They both tell time accurately. He said he wasn't selling a watch but he was selling a luxury. Mercedes would would be smart to figure out exactly what they are selling. The Rolex CEO has it figured out.
  • christiandschristiands Member Posts: 36
    Boomboom4,
    Which dealer are you working with (or WERE you working with would be more correct)? We're in the Detroit area and have great experience with the dealer that is not owned by the "3 connected" MB dealers in the area. If you would, share which dealer was not such a good experience.
  • boomboom4boomboom4 Member Posts: 10
    I didn't know if we could name specific dealers here. It is Mercedes Benz of Ann Arbor. I don't have a local dealer as I live an hour outside Detroit. Thank you.
  • christiandschristiands Member Posts: 36
    Dealer names are ok, and I think first names but not last names are acceptable. Our experience with our current MB and our next (in process) has been great with MB of St Clair Shores. Not sure if you know, but Novi, Rochester, and Bloomfield are connected and (our experience) is that they do not compare to the dealer in SCS (and we live within 1 mile of the Bloomfield dealer if that says something).

    If you ask for the Sales Manager (Ken), tell him you heard some good things about the dealer experience off of this board and he may recognize my user name. Good luck.
  • luxautoluxauto Member Posts: 1
    Does anyone know the current best money factor and residual on a 2010 Mercedes E350 coupe?
  • outieoutie Member Posts: 42
    2010 Mercedes E350 Coupe
    24 Month – Residual 61% of MSRP – .00315 Base Rate
    36 Month – Residual 56% of MSRP – .00280 Base Rate
    48 Month – Residual 47% of MSRP – .00280 Base Rate
    60 Month – Residual 39% of MSRP – .00280 Base Rate

    Residual is based on 15k miles/year, +2% for 12k and +3% for 10k.
  • surge352surge352 Member Posts: 7
    Any ideas on the fact that the convertible is coming out in May that it will affect the MF on the 2 door coupe?
  • bknycbknyc Member Posts: 61
    Been out of the market for a bit and in the process of leasing my dad a new E. Not sure where prices are currently. Looking at Black/MBtex, 4 Matic with sports pkg/P1 and 36-48 months/10k miles with just inceptions down. Trading in an 09' E350 so am eligible for the $2k loyalty. Any thoughts on price?
    Thanks
  • icb2779icb2779 Member Posts: 25
    What state are you buying in?
  • bknycbknyc Member Posts: 61
    New Jersey
  • icb2779icb2779 Member Posts: 25
    I just got a great deal on the E350 4-matic last month. I hear the new program is coming out on Tuesday. I will find out the information from my salesman and let you know. Stay posted.
  • arcnyc3amarcnyc3am Member Posts: 8
    Bknyc

    Can you share with us the deal that you got from your dealer. I live in NY.

    I was offered the following in April

    E350 4matic sport
    P2
    Wheel Package
    Metallic Gray
    $765/month (including tax)
    39 months/10K miles
    $3,500 Downpayment (Fees + 1st pmt + cap cost)
    No fleet discount and no msd's
    MSRP: 59,745
    Selling Price: 55,520

    I just want to get a feel if there is more wiggle room and hopefully the rates do not change significantly in May
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