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

delta737h · August 2007

Well, glad to hear your day is better. Compared to yesterday, it sounds as though you only have one direction to go. Does anyone read our chats? I sure hope so because they're very informative and enlightening. Besides, whenever I vent, I want everyone to hear me... lol!

Good day my friend.

John

britcrlvr · August 2007

You hit it right on the head. Who gives a flying f--- about dealerships or salespeople. Whenever I go to purchase cars I consider it my #1 objective to rip off the dealership. I don't care if I have to bully, harass, or anything else. The fact is if one dealership is unwilling to give me exactly what I want I know there is one out there that will. Glad that someone has some sense and sees dealerships and salespeople as what they truly are: slimy individuals.

delta737h · August 2007

brit,

I don't think I would label them all as slimy individuals. However, they're definitely not the brightest bulbs on the chandelier. If they were, they'd be selling toilet seats to the government at $10K a pop. Of course, they'd have to qualify as being both bright and slimy to do that job.

John

juice1220 · August 2007

Ahhh Brit,
Your words are so kind and gentle. The intelligence is just oozing out of you. Since your #1 objective is to rip off the car dealer, I am sure you have gotten ripped off in the past, and now you are just bitter. Maybe in the future you will get ripped off again, or just not given the treatment you think you deserve, because of the attitude you are starting the deal with. Good luck.

juice1220 · August 2007

John,

You surprised me be responding in the way you did. Brit is definitely not the person who would buy your book.

J

delta737h · August 2007

juice,

As I indicated, not all sales people are slimy. It's true that most car salesmen are not among the best and brightest. They can't even converse intelligently about car leasing. Most of them can't calculate a lease payment... that's disgraceful! And forget about them doing a lease v. buy analysis... they haven't a clue.

They can't make decisions which is why they're constantly running back and forth to their sales managers. So that reduces them to no more than order takers and is why they're expendable.

When I FAX/email lease proposals, I always send them to either the GM or the F&I guy. I won't waste my time dealing with floor sales personnel. Why??? Because they're NOT decision makers. I want someone who can make a decision.

Also, my book is not going to target dealership sales people only because they're simply not interested in academic pursuits. This book is for the academically motivated and most car salesmen, unfortunately, do not fall into this category. In fact, most Americans don't fall into that category. That's why we have to import all that magnificent foreign brain power to do math, science, and engineering.

If brit feels he's been screwed, perhaps he should educate himself and buy my book. Otherwise, it doesn't do much good to complain if you're not going to take the time and effort required to educate yourself. The price of stupidity is sky high.

I make no apologies for what I've said because that's the reality. Sad, but true.

John

britcrlvr · August 2007

no actually the last deal I made I offered 63K for an 07 Jag XJ8L and was accepted. In my book I came out ahead.

2 although you claim that faxing over a number to the dealership helps you get the best deal, you have already played your hand, and they have the position over you. It would be better for you to wait and let the dealership make the first offer. as you insinuated stupidity has no limits.

delta737h · August 2007

brit,

You couldn't be more wrong. No dealer has ever taken advantage or has had the upper hand with me. How could they? I don't mean to be boastful or arrogant; but I know more about lease financing than they could ever hope to know. For instance, I know exactly how GMAC and Ford Motor Credit computes lease payments. Most people don't. In fact, I don't know of anyone who does! I often see some of our hosts telling people to convert the GMAC rate to a money factor to get an estimate of the payment. ESTIMATES or BALL PARK DOESN'T CUT IT! They'll get you close but they are not good enough for a lease proposal. At least, not the ones I create. Try doing the following experiment... Choose any GM dealership at random and ask the GM or F&I guy how GMAC computes lease payments. I promise you they won't know. The only thing they know is what their computers tell them. That reflects poorly on them. And, you think they're going to have the upper hand over me? YOU MUST ALWAYS IN CONTROL OF THE DEAL. When you make a statement like...

"...you have already played your hand, and they have the position over you. It would be better for you to wait and let the dealership make the first offer. as you insinuated stupidity has no limits."

it speaks volumes about you. It certainly shows your inexperience because it clearly illustrates that you don't have the knowledge or confidence to negotiate with dealerships. The key to negotiating with dealerships is DON'T NEGOTIATE. No offense, but your statement is a billboard that says you're inexperienced, brit.

One often hears the advice to keep trades and new car transactions seperate. That's only because most folks are inexperienced. Your approach is used by a lot of people because they're inexperienced. Heck, if I were inexperienced, I'd be doing the same thing. For example, many people will wait for the dealer to make an offer on the lease payment. And then, they counteroffer. BIG MISTAKE! NEVER EVER NEGOTIATE PAYMENT IN A LEASE. That's EXACTLY what dealers want you to do. ALWAYS negotiate sell price. And, above all, know how to calculate lease payments. Otherwise, you're dead in the water.

To be honest, I'm not interested in what they have to offer in terms of sell price and couldn't careless! I've done my homework and know exactly what to offer in terms of sell price. I've checked multiple sources and have factored in supply and demand, customer and dealer incentives, MSRP/invoice pricing, holdback, spiffs, etc. I routinely FAX/email a very professional looking one page lease proposal. In fact, several people in other forums have used my proposal as a template to negotiate their leases and have done so very successfully. For instance, below is an example of a lease proposal constructed by yours truly. And even though the numbers aren't aligned, they are in my word document. Every number was calculated by me; not the dealer. NEVER EVER let the dealer do ANY calculations. Do them yourself! And, you had better be spot on; otherwise, you're going to look very foolish.

2007 Acura TSX
Retail Pricing Information

Base MSRP 2007Acura TSX 5 Speed Automatic (CL9687JW). 28,090.00
Premium Pearl White.. 0.00
Destination Charge.. 670.00
MSRP...... 28,760.00

Agreed Upon Value. 26,700.00

Amounts Financed
1st Months Payment 361.71
Security Deposit.. 375.00
Acquisition Fee 595.00
Sales Tax @6.00% x 35 x 329.77... 692.52

Capitalized Costs
Gross Capitalized Cost. 28,724.23
Capitalized Cost Reduction.. 0.00
Adjusted Capitalized Cost 28,724.23

Residual Data
Residual Factor.... 0.62
Residual Value (Residual Factor × MSRP)..... 17,831.20

Cost of Money/Term
Money Factor (0% reserves)... 0.00127
Term (months). 36

Lease Payment Itemization
Monthly Lease Payment including Sales Tax..... 361.71
Monthly Lease Payment excluding Sales Tax.... 340.99
Taxable Monthly Lease Payment 329.77
________________________________________________________________________________- - - - - - - - - ______

Charges Payable at Lease Origination
License, Title, Registration Fees (estimated)..... 120.00
Amount Due at Lease Signing..... 120.00

GAP Coverage Included
Annual Mileage Allowance: 10,000
Disposition Fee: None
Excess Mileage @ $0.15 per mile
Reg. M Disclosure: NA

______________________________________________________________________

All that remains, assuming the dealer accepts, is to transplant the numbers from the proposal to the lease contract. It should be clear that the purpose of a proposal is to save lots of time, save money, and eliminate aggravation.

I call the dealer soon after Ive FAXED/emailed my proposal to review it with them. Should they ask silly questions such as how I arrived at the agreed upon value, I politely tell them that it is irrelevant. What is relevant is whether or not they can do the deal. THE ONLY RESPONSE I WANT TO HEAR IS EITHER:

(A) YES, WE CAN DO THE DEAL OR;
(B) NO, WE CANT DO THE DEAL.

THERE IS NO NEGOTIATING! So tell me; how do they have "position" over me? If they say no, I simply FAX/email the proposal to another dealer... pretty easy, huh?

If they can do the deal per the proposal, I ALWAYS make sure that they are in complete agreement with every last bit of detail described. Nearly every number on that proposal must be transplanted to the lease agreement. If it's not, I won't sign. I want to make it virtually impossible for them to claim that they made a mistake once Ive arrived at the dealership. If they say that they made an error once Ive arrived, theyre going to look awfully silly. In that case, I remind them that the purpose of this exercise is to prevent mistakes, save time, and eliminate aggravation for all concerned. Unless they can remedy their mistake quickly, I tell them that Ill be taking my business elsewhere and thank them for wasting my time as well as their's. The GM of a dealership once told me he forgot the tax on the bank fee. I reminded him that there is no tax on this fee in the state of Ohio. Unfortunately, some dealers will will try to get away with as much as possible. I walked and they lost a sale. I have zero tolerance for dishonesty and/or incompetence.

I hope you can better appreciate my approach.

britcrlvr · August 2007

without going into a lot of detail i think our methodologies are similar. I purchase you lease. a difference, yet we both we our options contact other dealerships and find the lowest price. I talk with sales people you avoid them. Clearly there is less red tape, but all people are impetuous. I am not inclined to elaborate on this last sentence, as you seem somewhat educated I leave it to you to read between the lines. finally, there is no right way of doing something there are many ways to get to the right answer. Attempting to make a uniform system for negotiating is futile.

delta737h · August 2007

As I indicated, my data collection involves the use of a variety of sources; KBB is just one of many. The idea is to secure reliable and accurate data. KBB does not necessarily reflect how anyone car dealership arrives at its pricing and so I'll have to disagree with you. Automobile sales is highly competitive and mimics a perfectly competitive market structure. Pricing publications like KBB and edmunds provide only estimates... nothing is etched in stone. MSRP's can change very quickly and often do. As any economist will tell you, pricing is a dynamic that is dependent upon the market driven forces of supply and demand. And although KBB was founded by Lester Kelley, owner of the Kelley Kar Company in the 1930's, I take strong exception with your suggestive hint that KBB pricing strategies may be biased toward dealerships. That simply isn't true. In fact, that can actually be tested using a valid statistical sample. If there were sufficient statistical evidence to suggest that KBB was biased in their pricing, they would lose credibility and be out of business in a heartbeat. They're simply not going to take that risk. Would you?

My approach saves time, money, and aggravation. I refuse to spend more than one hour from start to finish with any dealership. Unless you want to test drive a car, I see no reason to visit a dealership other than to sign documents and pick up the keys. It minimizes your exposure to dealership personnel and eliminates a lot of unnecessary conversation. I don't have the time nor the desire to sit on my hands talking about how the Cleveland Browns are going to do this season (I predict no better than 6-10 lol).

I'm not much for games like "can you beat this" that involves two dealerships competing against each other. However, it's not uncommon for people and even corporations to use the bidding process. It's been around for centuries and has been very effective. But, it can be very time consuming and costly. So one must weigh the cost-benefit of engaging in such a strategy (i.e., time spent v. money saved). Afterall, time is money. And, for those that bill their time at $350 per hour, it doesn't seem to be a prudent strategy. And so, my strategy may be very appealing for self employed people earning high wages. This is a Mecedes-Benz forum and it's a pretty good bet that a large number of Benz owners earn a pretty good wage.

As long as you perceive that you got a good deal, that's the most important thing. And, as far as our approaches being parallel, I agree as they share nothing in common (parallel lines never meet). They are two totally different approaches that use different philosophies. I'm not saying that your's is wrong. On the contrary, as long as each approach follows rationally, there are no right or wrong approaches. Each of us must to do what is best and use that approach with which we're most comfortable.

Best of luck to you.

John

mlroberts55 · August 2007

Hey Delta737h i need your help. If you plan on using 20K miles per year and you pre pay for the miles, do you also have to drop the residual value? If so, how do you know what it is since most only go up to 15K per year

delta737h · August 2007

Hey mlroberts55!

Here is how it works. First, ask the dealer what the excess prepaid mileage charge is (one of the few things they can't lie about because it's itemized in the lease contract). Let's suppose that it's $0.15 per mile and that you're considering a 3 year lease. The pre-paid excess mileage charge is computed as follows...

$0.15 x (20,000 - 15,000) x 3 = $2,250.00

Second- Yes, this charge is deducted from the residual. So, if the residual = $20,000, then...

Adjusted Residual = $20,000 - $2,250.00 = $17,750.00

The adjusted residual is used to computed your payment. The $20,000 residual is based on 15K miles per year (res. factor x MSRP) and so it must be adjusted downward to account for the additional mileage.

Because you're putting an additional 15,000 miles on the vehicle (assuming the benchmark is 15,000 miles... which, I believe it is), it depreciates an additional $2,250.00 over the term of the lease and so the residual is adjusted downward by this amount.

One thing to consider...

If you don't use all your pre-paid mileage, be sure that any unused mileage is credited to you at lease end. Many fund providers will not do this. Also, if your state charges sales tax, you will most likely have to pay tax on any pre-paid mileage charge. That tax can either be paid upfront or rolled (i.e., capitalized) into the lease.

Another possibility is that a few fund providers might lower the residual factor by a few percentage points to account for the additional mileage. I've never seen or heard of that being done but I suppose that is a possibility.

Hope this helps.

John

kyfdx · August 2007

Honda Finance does that.. If you want 9000 extra miles at $0.10/mile, they just lower the residual by $900, rather than make it a mileage charge upfront..

Of course, you can't get any of that back, if you don't use it...

regards,
kyfdx

delta737h · August 2007

It just occured to me that pre-paid mileage isn't taxed directly. The higher payment that results from the lower residual will be taxed. And so it makes no sense to levy a tax against the pre-paid mileage charge because it's deducted from the residual. Sorry for the confusion.

John

qpmicro · August 2007

Does anyone know the current Mercedes money factor and residuals for either a 2008 S550 (the one I'm looking at is MSRP at $102,515 with a sell price of $7,500 off) or an '08 S63 (MSRP at $140,090 with a selling price right about that).

Thanks,
Michael

twnmango · September 2007

I am looking for the MONEY FACTOR and RESIDUAL for 2008 S550 lease.

Can anyone help?

blckislandguy · September 2007

John, you are obviously an intelligent guy who makes a good living. But why go thru all these hassles. If you just BOUGHT the damn car you would have only one variable (the bottom line cost) to worry about, not residuals, money factors, etc. etc. Moreover, smart as you are, why not just BUY a two to three year old unit?

Re: sales people's intelligence. I don't agree that the typcial sales guy should understand discounted cash flow analysis and I wouldn't trust his analysis anyway. But how about acquiring some basic product knowledge? Most of the ones I have met have never, ever, even "built" a car on the manufacturer's web site and have little grasp of which options are available for which model, etc. Call 10 Audi sales guys and ask if the performance seats are availalble as a stand alone option. Few know.

Re: Julius' store in Greenwich. They have chosen a low profit margin path. This defeatist strategy is not my problem. Apparently, from what Julius says, they sell about 6 times as many low margin new units as high margin used cars. Why? I'm convinced that new car dealers sell far more new than used not only because of factory pressure but also because the average sales guy can't sell a USED car and so the store doesn't even try to hire anyone but willing new car order takers. Wiscasset Ford in ME is probably the biggest Ford dealership in New England. How do they sell so many new cars? Well, they are in a very rural area with low wages. Their new car sales guys are literally just $10-12 an hour order takers which saves the dealership money. They have almost no used cars.

juice1220 · September 2007

My store in Greenwich, has a separate used car department, and we sell about 35-40 used cars a month, with very good profits. Its the new cars that aren't holding as much gross, as they should be. This has nothing to do with factory pressure, but the simple fact that there are way too many dealers, and not enough buyers. So the dealerships are giving cars away just to earn the business and get the car out of inventory. Then hopefully make up some of the losses in the service and parts departments.

Julius

delta737h · September 2007

blckislandguy,

I agree with you 100%. The cheapest way to acquire a car is to buy a two or three year old unit and run it until the wheels fall off. I'm writing a textbook on car leasing which is the main reason for my participation in these forums. I love to help others as well as learn from them. I've learned a bundle just by reading a lot of posts not only from very knowledgable and experience people but by the inexperienced folks as well. It is actually the inexperienced people with very little leasing knowledge that often ask very good questions that really forces one to think (and sometimes drink).

You also make a very good point regarding sales people and product knowledge. In fact, you hit the nail squarely on the head. It's product knowledge that really matters most.

Regarding new v. used; it seems to me that there is a world of difference between the two. Used car sales is tough. One has to be able to properly appraise used cars and financing is some what more complicated. As such, I think used car sales people should be better compensated than the new car folks. I have no clue what the difference in profit margins is for new v. old. If I had to guess, I'd say that new car sales provides the larger profit margin and so it comes as no surprise that there are many more new car salesmen than used car salesmen.

John

blckislandguy · September 2007

John, new car sales produce tiny profit margins. Go back and read the post about the 140K MB with a gross profit margin of $800. Think razor blades. The dealers are under fantastic pressure by the manufacturers to sell the razor and hope that by building up the population in their area they will get the razor blade sales. This is the strategy pursued by forklift dealers, heavy duty truck dealerships, construction equipment dealers, etc. Their sales departments at best break-even and the parts and service deparment get to rake in the money.

Factory pressure?? In Massachusetts, it is reported that Herb Chambers just paid north of 650 million for Foreign Motors West in Framingham. After the much delayed closing (the banks were understandably reluctant), BMW and MB each indicated that they wanted new 60 million dollar facilities. This at a time when the baby boomers are getting long in the tooth and the economy could be headed for the hopper.

So, how do you move the new car iron and pay for the lavish taj mahals the factory makes you build? You hire platoons of pleasant young people for little money who like the idea of working 80 hours a week in a BMW store talking with their age cohort about cars that in truth neither one can really afford. But, around the corner in the used department is where the money is made.

juice1220 · September 2007

I have to agree. The profit margins in new cars is way less than in used. You cannot really "shop" a used car. You will never find the exact same 2 used cars with the exact mileage, wear and tear, etc... You can on the other hand find a dozen identical new cars within a 50 mile radius, so the dealers want to just move the metal, and hopefully get more business in warranty repairs and parts. Depending on the type of used car you may have $6-8000 profit built in. But also lets not forget that a good used car department usually changes inventory every 60-90 days, and as the unit gets older the profits get cut just to move the unit, instead of wholesaling the vehicle and losing all profit, and the opportunity to make up service monies. I have never heard of a dealership that pays sales people by the hour, and if there is such a dealership, than that answers why salespeople are lacking product knowledge. They have no incentive to be better than the next guy or the person you call in India when you call your bank card number. They are there for the time and not the commission or to build customer satisfaction. This goes back to one of my favorite saying. You pay peanuts you get monkeys. I have been in the car business now for over a decade and I can admit that the quality of salespeople has declined greatly, and this is because of the profit margins dropping and the really good and knowlegable sales professional has either gotten out of the car business or retired. The new ones are just looking for a quick lay down, and an easy sale. There is no more "selling" involved. When was the last time you had a true "walk around" a vehicle, where a salesperson basically goes over all the features and benefits of the vehicle. I cant remember when I saw a hood opened or a salesperson going over anything other than a test drive. Plus most customers state that they know everything there is to know about the car, because they have done all their research on the internet, so the salespeople are not required to know as much about the vehicles as they once had to. But it is also this same customer that comes back in a week to ask for help in pairing their phone. Anyway this is just like the chicken or the egg. Why this happened to the industry no one will know for sure. The one bottom line fact is that the only one NOT suffering from this is the manufacturer. Both the dealerships and customers are fighting for every dollar, and meanwhile the factory sits back and makes their huge profits. Because if anyone out there thinks that invoice is what a car really costs they are sadly mistaken.

Julius

blckislandguy · September 2007

Julius, thanks for your thoughtful post. You nailed it. This fall when I am in Greenwich doing Christmas shopping, I'll stop in with coffee for your crew...

New car dealerships remind me of the airline industry: everyone makes money except the airlines. The car dealer at best breaks even and everyone around him does well. This list includes the manufacturer, the real estate developer who sold him the taj majal the factory insisted he build (someone should come up with an idea for what to do with all these Hummer quonset huts that will be empty in a couple of years), his lawyers, CPAs, and attorneys, the insurance guys who insure the new cars he sells, the utilties he pays to heat and cool his all glass showroom in July and January (the utilitiy bills in these new all glass dealerships must be enormous; does Porsche really think that their dealer in Nashua, NH where it regularly goes below zero in the winter, really should have glass building?), etc. etc. all do very well and play golf on weekends. The dealer-principal? He works 80 hours a week and his wife wonders why he can't go down to Boca with her for two months in February. The dealership staff? They move around regularly thinking that there must be a dealership out there that is truly better and different. Somehow they hang in there until their mid-50's. (I've never seen anyone at a dealership over 55 unless his name was on the door.)

juice1220 · September 2007

blckislandguy,

We would be very appreciative of the coffee. :-) I do apologize to everyone out there, if I did ever say anything offensive and in defense of the car industry, but there are a few dealerships and people in the car business that take great pride in their jobs, and try to make 100% sure that the customer is fully satisfied. But at the same time we also need to make a living. I am not a believer in destroying a customer but at the same time, I dont think the customers should destroy us. I truly believe that the manufacturers start all posts and blogs, just to get customers fired up, and beat up on dealerships, and then they sit back, chuckle, watch the fireworks, and get their product into the customers driveway. But oh well this is the life I have chosen, and for now it pays the bills. I am happy to make people happy, and still enjoy the look on peoples faces when they pick up their brand new car, and are excited. It is a great feeling to see a person pick up a brand new M5 or 335 coupe and look like a little boy on Christmas day. It makes the bad days worth it.

Julius

topgun7 · October 2007

Guys, I am sure you have a lot of fun chatting with each other. But this is a S class lease forum.. I read through 3 pages of about 40 posts of your conversation trying to figure out if it has anything to do with the lease program offer now. Your conversation is very interesting but it has nothing to do with S class lease. Please show some respect for other who seek information of S class and start your own subject...

daryll44 · October 2007

I am currently a Lexus owner. Someone on the Lexus bulletin board that I subscribe to tells me that one can lease an "S" Class (I owned 5 of them from 1991 to 2003 plus learned to drive on dad's 1979 300SD) for only $1000/month with no money down.

I cannot believe this is true. Is it?

topspin628 · October 2007

When I was shopping this car, about 2 months ago, the lease quotes with 0 down, tax in payment and 15K per year, 36 mos were in the 1600-1700 range for a "base" car.

asa2 · October 2007

The best I've heard in NJ is around 1570 for Tier 1. It is a good looking car though. Tops all the 750 and A8 looks wise

gmannj · December 2007

I am interested in getting some perspectives on a lease for a 2008 MB S550 4Matic. The MSRP of the car is $98, 950, and has the premium III package. The lease specifics are: 39 month lease with 15K per year, with a MF of 3.00, and a $5k down payment. The residual is $49, 801. The monthly payment works out to be $1,695 per month (in NJ). Is this a good deal? Thanks for the help!

boilerroompete · December 2007

Hi all, I have read through the entire S 550 lease forum, and didn't find the answer I was looking for. I thought I'd help out some fellow edmunds people, give back to the community a little

Equipped with the best info I could arm myself with, I went in with my friend yesterday to acquire a S550 in southern california. I went with him because I have helped numerous friends negotiate for their vehicles before, so I was confident I could negotiate a better price versus him going at it alone. The car was a 2008 S550, priced at $99000. The lease was agreed at $5000 drive off, $1538/month (tax included for both numbers) for 39 month (38 payments total since drive off included first month's payment), 10000 miles a year. Again, $5000 included the first month's payment. It could have been negotiated at 1528/month if his fico was a bit higher. I hope this information helps out some of you looking for a similar car. We negotiated $7500 off MSRP by the way. Nice car, but I am more of a CL550 fan due to the more expansive (center console all wood) and exquisite wood trim the CL550 possesses. I definitely had fun though, negotiating is pure excitement if you look at it like a game : ) Happy hunting!

ocautoseeker · January 2008

gmanni,

Kind of a late reply here... but if you're still in the market for an '08 S550 4-matic, the January lease rate and residual is as follows:

36 mo/15k - 50% / .00355 (8.52%)

MBC doesn't have anything great on these right now. You might consider a different bank.

jeffparker · January 2008

Thanks! I was thinking the same thing. I'm here looking to buy a new 08 S550 and am trying to figure out what a good deal means.....

Still looking.

The car I'm looking for:

-08 S550 Iridium Silver
- P2
- rear view camera
- AMG Package
- Rear power sun shade and side shades
- leather/wood steering
Quote: $98k MSRP.

What should I really pay for this car? Someone here earlier said that they got $7500 off MSRP. I was under the impression that you always negotiate from the inv. price up, not from the MSRP down.

blackmamba24 · February 2008

Hey guys, im new to this board, but i'd just like to say that I appreciate everyone for their help...this seems like a great forum.

My question is on what I should be paying for a lease on a 2008 S550 4Matic.
I want it with Premium Package 2, and with the bluetooth option. Based on MB's website the price comes out to $95,175. I was thinking about getting a 48month, 10,000 mile/month lease...Any help would be greatly appreciated. Thanks

eights38 · February 2008

blackmamba24 - Beautiful car! Where are you located?

blackmamba24 · February 2008

Hi Eights38,

I'm in Michigan...thanks. I'm thinking about contacting local dealers, but I wanted to have some background information before I do that. I currently drive a 2004 S500 4matic and my lease is ending soon. I'm looking to lease within the next 2 months. Any help would be greatly appreciated. Thanks.

danf1 · February 2008

you should qualify for a $3,000 lease loyalty cash incentive if your current lease is through MBF. 39 months is the best term on that car now. If you want longer term do 51 months. The residual is the same as it s for 48 (39%).

blackmamba24 · February 2008

Sounds good...thanks Danf1

So what do you think is a good lease rate given the 3000 dollar cash incentive for a 39 month lease with taxes included, of course...(and i do have the current lease through MBF so it will apply, which is nice). Any help would really be appreciated, thanks Danf1 and Eight38

O, and you know whats really ridiculous...I requested a quote on some various MB dealer websites and some responded via voicemail...so i called them back and 2 out of the 3 did not want to discuss prices or really anything over the phone. They just wanted me to come in. What is the point of an online quote request if they are going to be so pushy to come in. I know exactly what I want, all the options, everything, but they won't discuss anything over the phone...The only dealer that was very upfront with everything was a dealer that was out of state. What do you guys think about buying/leasing through an out of state dealer (what is the best way of getting the vehicle...besides flying there to pick it up)...thanks again guys. sorry for all the questions, i just don't want to be ripped off and you guys are very knowledgeable. thanks

danf1 · February 2008

I would guess you will probably be around $1500/month plus tax. It depends upon how good of a sale price you can work out. Can't really tell you what taxes are where you live, so you'll have to do the math on that one.

ocautoseeker · February 2008

Here are MBC's current lease numbers...

2008 Mercedes S550 4matic Sedan
24 Month  Residual 62% of MSRP  .00365
36 Month  Residual 53% of MSRP  .00330
48 Month  Residual 42% of MSRP  .00330
60 Month  Residual 37% of MSRP  .00330

Numbers assume 10k annual miles.

As you can see, MBC has crummy rates on this model right now. You might try leasecompare.com or your local bank or credit union as an alternative.

gmannj · February 2008

Thank you- this is helpful!

blackmamba24 · February 2008

Hey, thanks for that info...i had a question...what do you think i should be able to get on the price of a 2008 S550 4matic with the P2 package and the Wooden Steering Wheel option for if i wanted to buy it outright (sticker is $95,245)...i was hoping i could get a price including taxes (michigan tax is 6%), destination and all the other stuff...

-Just the price out the door that you think i should be aiming for paying straight up cash...i've decided that financing through my own bank is better than MBF, but ive decided that buying versus leasing makes the most sense for me currently...

Any help on a target price would be greatly appreciated...i know the whole between dealer invoice and msrp target...but i also know there are hidden extras and all that stuff...regardless, im not looking to get the car free or anything but im not into getting ripped off, which i know i did in 2000 when i leased my other S Class...then was able to get a pretty good deal on my lease in 2004 for an S Class...but now im looking to buy so i haven't really been too concerned with price in the past...help me out, please...thanks

blackmamba24 · February 2008

Can someone explain something to me...

For example, if the msrp of a particular S Class was $95,500 and the residual after 39 months was around 50% (according to the info above) and the dealer invoice is somewhere around 89,500, then why is the lease around 1500 a month plus around 5000 down...i just don't understand this...

That means that after i have taken this car for 39 months, i have paid around 63,500 (including the 5000 down) and when i return the car back to the dealership, the car is still worth around 47750...that means that the car should have been worth around 111,250. (63,500+47,750).

Why isn't the lease per month more along the line of 1250-1300...thats a total ripoff...am i missing something?

Even if the lease per month was 1300 with nothing down for 39 months...i still play around 50,700 (the residual is still 47750) and the apparent total worth of the car would have been 98,450...thats still about 10,000 over dealer cost...what gives?

ocautoseeker · February 2008

On a lease, you pay the difference between the cap cost (negotiated price) and the residual value. This figure is known as the depreciation, and thus what you are paying. But, you then have to add in the rent charge, otherwise called interest.

So, assume an MSRP of $96,000 and you want to lease for 36 months. You take the residual (50%) and multiply it by the MSRP. In this case, the residual value (estimated price of the vehicle at lease-end) is $48,0000.

Now, say you negotiate a cap cost (hypothetically, a selling price) of say, $91,000. There is a spread of $43,000 (the depreciation), so you simply divide $43,000 by 36 (the number of months in the lease term). You get a base payment of ~$1195/mo. But, now you have to add in the rent charge (finance charge). With MBC's current buy rate @ .00330 (7.92%), you will multiply that number by the sum of the residual and cap cost. $48,000 + $91,000 = $139,000 x .00330 = $458.70. This is your monthly finance charge.

So now, take your base monthly payment of $1195 and add the finance charge of $458.70 and you get a pretax monthly payment of $1653.70. Then, depending on your state, you can have the sales tax broken down into your monthly payments. So, assuming a 6% sales tax, that adds another $99.22/mo to your payments giving you ultimately a payment of ~$1753/mo

The bottom line: you simply paid the $43,000 in depreciation + interest. Obviously, this vehicle has a crummy money factor through MBC currently and thus why you paid $20k total in finance charges.

Any cap cost reduction (down payment) simply lessens the spread, ultimately giving you lower monthly payments. Large cap reductions are not a good idea when leasing.

Hope this makes sense?

moet · April 2008

S550 4matic 2008
PII package
Ipod Integration
Wood/Leather Steering

Total Cost = 97,665
Markup = -10,268.34
Total Selling Price= 87,396.66
Cap Red = 5825.92
Total Cap Red = 81,570.74
Capped Taxes = 3,761.30
Total Capital Cost = 85,332.04

Monthly payment = 1,310/mo (with tax)
Total out of pocket = 8,800.01 (includes 1st monthly payment, taxes, fees, etc.)
Residual = 47,160
Money factor = 0.0025

Not much haggle with the sales person. Just told him what i was expecting to pay and he worked the numbers (this is in NJ btw). Good deal or Bad deal?

ocautoseeker · April 2008

That looks like a good deal (based on the current pogram). The residual and money factor gel with current MBC numbers. My only advice would be to NOT make that additional cap cost reduction. I'd advise only paying your 1st mo and dmv's at inception.

Looks to me like a 36mo/15k lease, correct?

moet · April 2008

ocautseeker: It's a 39mo/15k lease.

Made the deal!

Just out of curiosity, what difference would it have made if i paid cap reduction now or have it rolled to my monthly payment? Either way i end up paying the same $$ (Unless he'd bring down price of the vehicle by an additional 5k)?

ocautoseeker · April 2008

Congrats on the car!

Only reason I do not recommend cap cost reductions on leases is because if your vehicle gets wrecked (totaled) or stolen, you may not be able to recover the upfront down payment you made.

You may already know this, but I'll reitterate... The GAP insurance included in your lease through, in this case MBC, would cover the payoff of the vehicle, but most likely you'd be out the $5k. By making a cap cost reduction, you're essentially prepaying a portion of the deprecaition and not paying down any principle like on a purchase. In other words, there is no equity being built in a lease, therefore it's advisable not to throw any money at it.

However, many people are very pyschological when it comes to payments, so if the payment suits you and you had no problem laying out the $5k, and you're happy, then that's all that really matters.

Again, congrats - beautiful vehicle!

moet · April 2008

thnx for the advice ocauto. i didn't think of it that way (not building equity). I'll keep that in mind the next time i'm out to lease (another 3yrs to go).

Thanks again!

shawn757 · August 2008

Is there any good lease deals on the S class anymore? I have not seen any for sometime. If so how does peaple buy this car? I don't want to finance.

juice1220 · August 2008

In terms of good deals out there. The deals right now on high line vehicles are very good. The germans have announced that they will be changing the way they do buisness in the near future. Our economy and dollar is so very bad right now. They are going to raise the prices of the vehicles, and cut production. So now is the time to buy before dealers are not going to want to discount vehicles at all. The car industry is going to go through some major changes in the next year or so. So grab the deals while you can, because who know what the future brings.

eights38 · September 2008

I am in the process of negotiating a lease assumption on a 2008 Mercedes S550 4Matic in Long Island, NY. The car has the Premium II Package, iPod Integration, and Wood/Leather Steering Wheel. There are only 400 miles on the car and 38,600 miles to be driven over 34 months. The payments are $1585 per month (includes 8.625% sales tax) and there is $0 due at signing (current owner is willing to pay $595 transfer fee).

What do you think? Can I do better?

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