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Mercedes-Benz R-Class Lease Questions

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Comments

  • 5.5% of holdback is from MSRP and giving away to the customer 4.5% is very real. I just received an email from Santa Monica W.I. Simonson Mercedes in So Cal, and they are discounting (advertised) $13,500 off MSRP of $60,630 (2 available) on 2006 R500 with options: 18in Wheels, Comfort Pkg,Trim Pkg, Entertainment Pkg, Sunroof Pkg. Not the greatest in options but very decent deal. Base on the invoice of $56,441 (Edmunds) with $7K incentive and $3,334.65 holdback, the dealer is making $1023.65 on paper.
    The dealer is giving away 4% of their holdback without even negotiation. This is the perfect storm that MartinF mentioned. Get the R before MB put the brakes on production.
  • Well, I wish the dealers in Seattle area were willing to play ball. I spoke with 3 dealers today and none of them are willing to go into their holdback! Greedy bast*rds! ;-) I may drive one up from NorCal since I am down there occasionally on business but an unnecessary pain in the rear if you ask me. If someone in the NW gets a dealer to play ball please post it!
  • It's end of the month again, and once again, I am getting emails and phone calls even though I've told the dealers that I've got my car.

    So Cal dealers will make every effort to get you buy here. They may even ship the R to you at their cost, or negotiate into the lease. North Cal will do the same.
  • martinfmartinf Posts: 121
    First, the "perfect storm" lease situation that we have applies largely to the 2006 models. What I mean is that because of the huge discounts from MSRP, the "selling" price of your vehicle will be about 22% to 23% less than MSRP. That is to say that your original "selling" price is already a "residual value" of 77%. In 27 months, Mercedes would like to delude themselves into believing the vehicle will still be worth 67%. Therefore, your true depreciation costs on the vehicle will be only 10% for 27 months. Take the lease to 39 months (by the way, a generally cheaper way to go), your residual drops another 10%, but this time for only 12 months more of lease. In this case (very strange case indeed and like nothing I have ever seen in the car leasing arena), the shorter lease actually is more economical. The problem with the 2007's is that MSRP's have been adjusted downward to market conditions, and you will not be able to start off with the vehicle at 77% residual value like you do with the 2006's.

    The 2400 is the way to convert the money factor (lease speak) into interest rate (normal speak). e.g., Money Factor of .00185 equals 4.44% interest rate. Swapalease.com does a very good job of walking you through the entire lease business, and it does it in just a few pages of easy reading. I would recommend it to any new or even experienced potential lessee. I found the information helpful, too. Your equation for the depreciation is exactly correct, but your equation for the "loan interest" may be off a little. That's where the swapalease site will help. Good luck and my thanks to pureautomobile for a lot of helpful information on this forum!!

    I am still trying to find other "perfect storms" out there, but I have yet to find anything close on vehicles we would really want. Maybe a Lincoln TownCar or Navigator or Cadillac Escalade (previous bodystyle). The new BMW X5 is due in November, and we may see similar deals on the 2006 BMW X5 leftovers. I will keep you posted.
  • martinf,

    Thanks for your help and explanation.
    Finally, found ok offer on the 2006:
    MSRP $56K 3K drive-off 12K/year for 27 Mo - $480(includes all)...
    Definitely not the best on the forum, but...
  • martinfmartinf Posts: 121
    You did fine! I am glad that you passed on the previous $609/month deal. Good luck with the vehicle. I am sure you will be happy. I don't think we will be able to get such great deals on 2009's when our leases are up in 27 months, but understand that your lease end options are more extensive than your contract suggests. I was unaware until recently that you could re-negotiate your monthly payment to extend your lease or re-negotiate the lease end buyout price. Be sure to check on this forum or benzworld.org or mbworld.org before you turn the car back in. I know I will be!!
  • Ok here is my deal

    R350 w/ a few options, comfort, park, entertainment, MSRP $54,745
    Selling price: $44745 ($10K discount w/o even trying)
    MF: 0.00315
    Residual: $37266
    Payment: $538 27months/12K does not include sales tax
    Fees down: $2600(seems a little steep, must include acquisition fee)

    How am I doing here? How much more room do I have to get them down?

    I'm in the phoenix metro area...
  • martinfmartinf Posts: 121
    The best deals in California have the discount from MSRP in the range of $12,000 to $13,000 off. This is basically the $7000 factory to dealer (to you) cash, and invoice less about 3.5 to 4.5% into the dealer holdback of 5.5%. Mercedes of Walnut Creek advertises $12,000 off MSRP as a starting point on their website. Fletcher Jones is generally going 11% off MSRP and the $7000 factory to dealer cash (your deal would be about $13,000 off). If you can live with the difference in gas mileage, you should at least drive the R500. You might be very surprised with the additional performance for about $2000 to $2500 more on the 27 month lease.
  • martinfmartinf Posts: 121
    I forgot to add that your money factor should be .00295. This deal sounds like it is even more than what is the nationally advertised, Mercedes subsidized lease. Definitely too high! A fellow Vegas did his deal with Fletcher Jones in Newport Beach and they shipped the vehicle for $399. Check them out.
  • Thanks guys, I'll keep pushing. Thanks for the info on the MF especially, that will help the payment quite a bit.
  • Very close to acquiring one of leases on the R-class. Before I agree to anything, can someone tell me what if anything I should expect to pay out in the begining? "Out the door cost" Is no money down realistic? If so, are there loan fees attached to these leases that I should be aware of?
    Also, did the money factor go down? Noticed a figure of 0.00185 on another message.
    Thanks for all the help so far.
  • srexysrexy Posts: 8
    Thanks to Not 2 Shabby for the heads up on this great deal and this thread for invaluable info.

    Just picked up a lightly optioned R350 - HK, sunroof, power rear quarterlights - Capri Blue w/Macadamia tan leather interior (this was the exact colour combo the better 'alf wanted and the only available vehicle locally - hence the lack of options)
    The Nitty-Gritty:

    Tampa Bay MB

    12k/27 month
    MSRP: $52144
    Sale Price: $40000
    MF: 0.00295
    Residual: 68%
    Tags/title/misc: $216 (rolled into lease)
    Money out the door: $681
    Monthly lease payment $458 + tax
    Dealer Fee: $599 (rolled into lease)
    Acquisition fee: $1095 (rolled into lease

    The only thing I was a bit skeptical about was that they charged me $1095 acquisition fee - I read $795 on the MBUSA site and even argued the point for a few minutes before I just threw in the towel. Their computers had been down sporadically for the whole morning so we were getting very tired of the 68° showroom. I'm pretty sure that I got an OK deal - better alf is very happy and if I can unload her Saab wagon we should have the lease payments covered until month 20.

    I had been working the salesman since Sunday when he'd quoted me for 27/10k - $43k and change sale price w/$599 down/$599+tax per month. After reading this thread last night I surmised that $40k was doable and simply sweated the salesman and his manager until about 11:50am (10 mins before the noon expiration of the September incentives). Not sure how much smoke the salesman was blowing up my *rse but I simply stuck to my guns and said $40k sale price, 1st month down only and throw in the Ipod hookup. I capitulated on the Ipod but still feel good about the deal.

    Thanks to all for your invaluable contribution - a perfect storm beats a hurricane any day :P
  • You did better than me, I should have kept pushing. I got them down to $500+tax a month w/ $1900 drive-off on a vehicle priced at $54475 + got them to throw in the ipod adapter although they don't have it working right yet. 27/month 12K lease. They state the buying price was $43975, so just got $10,500 off sticker plus the ipod integration kit installed. One thing about doing a deal sight unseen is the inability to know when they are getting uncomfortable. That is when you know you are cutting into their margins more than they like. When I showed up at the dealer they must have had 10 r-class sitting there, at which point I knew I should have pushed them more. But in the end of the day I got the car I wanted for less than there original offer of $535+tax with $2600 down. For us comfort package w/ parktronic was a requirement, and it seemed like that combo was hard to find w/o a bunch of other options. The other dealer here had some R350's left but their cheapest one was over $57K and it was black. Yuck.
  • R500 MSRP $66k inc. delivery.
    $15k off sticker
    27mo/12k
    $580mo.
    cash at signing $1090
  • Hi leasemama. Since you are new to the world of leasing, you definitely should check out the following informative articles that are available here at Edmunds.com prior to visiting any dealers: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

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  • martinfmartinf Posts: 121
    The .00185 money factor was based on the single payment option (regular money factor was .00295 minus .00110 for the single pay). The real news is that Mercedes is now offering $10,000 factory to dealer cash on the R500's, up from the $7000 just last week. It makes the R500 a lot more attractive if you can live with the slightly lower MPG (13/18 vs 16/21). I don't know what the new money factors or the residuals are as of now.
  • are you sure???

    what about changes in MF??
  • martinfmartinf Posts: 121
    The $10,000 factory to dealer cash is posted on the Edmunds.com New cars/incentives and rebates section. I could not believe it myself! I guess I should have had the patience to wait out their 2006 inventory. They are still offering reduced interest rates on purchases, but there are no posted incentive leasing programs. When Mercedes increased the factory to dealer cash from $5000 to $7000, they dropped the residual from 4%, from 71% to 67% on the 27 month/12,000mile/yr lease. For a lessee, that 4% residual drop basically wiped out any advantage of the extra $2000 factory to dealer cash. If they again dropped the residual on the 2006's another 4%, that would similarly wipe out about $2400 to $2600 of that additional $3000 incentive. I don't know what they are doing with the MF yet. With you already getting $15,000 off, you still grabbed pretty close to the bottom, so, congratulations and enjoy your nice R500.
  • Thanks for all the help out there. I have managed to strike a pretty good "intial" offer with the dealership. Just wondering now if I should go for the 500 instead.
    I am having real trouble finding a "loaded" vehicle. Average MSRP has been about $64-68K. Any ideas friends?
    I want the payments to stay at or around $500.
    Help!
  • actually i didnt sign at $15k off. we didnt get the paperwork done in time. the dealer confirmed that MB is $10k not $7k. I still cant confirm MFs for Oct for '06 Rs... Dont think residuals changed
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