DEAL CHECK: 2023 Mercedes-Benz GLE 350

Ask the Hackrs
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1

Hello Everyone,

I’m currently negotiating on behalf of my fiancé with a dealer to lease a 2023 Mercedes-Benz GLE 350. It seems like the dealer is doing what a dealer does, getting creative with the numbers. Long story short, we were connected to a sales associate and asked the following simple questions:

• What is the money factor you guys are using for top-tier credit clients? Per the associate, the lowest MF they are quoting is 0.0028.
• What is the Residual Value % for this vehicle? Her response is 57%.

The dealer provided us with the following offer:

MSRP: $69,160
15,000 Miles
36 Months
$0 Down
$1,346/Month

I went ahead and input the above numbers into my Money Factor Calculator. Using the numbers above, the money factor is 0.0048 and not 0.0028. She insists and continues to claim that they are using a 0.0028 MF and that she will talk with her supervisor.

After a few hours, she sent me the attached offer.

Here’s what is interesting about the numbers:

• In the cap cost reduction, they added a “Net Cap Cost Reduction” of “$-2,091.77” and decided to capitalize this into the Net Cap Cost. This looks like an imaginary down payment the dealer is adding to inflate the Net Cap Cost.
• The acquisition and dealer fees should not be capitalized; we will pay that upfront. I did mention to her that they will have to remove either the Acquisition Fee or Predelivery Service Charge, which she indicated is a “Dealer Fee.”
• The registration fee is way too high. In the State of Florida, it costs $225 to register a vehicle. We asked if the plates could be transferred.
• The tire and rental fees seem to be meaningless charges.
• The dealer’s argument about us making a payment on a MF of 0.0028 is based on an inflated Net Cap Cost of $73,145.77. The Net Cap Costs tend to be lower than the MSRP, not higher.

If we use a MF of 0.0028, 57% residual value, and Net Cap Costs to equal that of the MSRP. The monthly payment should pencil out to be $1,130 per month before taxes.

What do you guys think about how they structured these numbers?

Offer_Redacted.pdf (2.9 MB)

2

It is practically impossible for us to tell you what a “good” monthly payment is for your specific lease as lease programs are highly dependent on region, personal qualifications, tax rates, etc.

We always recommend the following method before you ever contact a dealership. If you do all of the work up front, you’ll have a stress free dealer experience and set yourself for success.

  1. Read Leasing 101 to understand how to calculate a lease payment and the variables. Monthly payment is an output, not an input!! While you’re at it, be sure to watch the LH video to brush up on how to most efficiently use the resources here.
  2. Pick a specific vehicle that you want to target
  3. Gather the current MF, RV and incentives from the LH Calculator Rate Findr for your zip code
  4. Research the LH marketplace and other deals that have been made recently on your vehicle - what was their pre-incentive discount? How did their lease terms differ?
  5. Plug your numbers into the LH calculator, and use a pre-incentive discount similar to what you have seen
  6. Create a target deal, this is what you’re trying to negotiate to. You can try different terms, selling price discount, etc. and see how your monthly payment is affected. It is also possible that different trims of your vehicle may have different MF and RV (i.e. this is very common with GM), so make sure that you look into that. Come up with a set of inputs that give you the output that you want - your desired monthly payment.

With a target price determined, you now have a deal to pursue and compare dealer offers against. More importantly, you have a solid foundation to work from.

3

You do realize that the mf translates to ~6.72%, it’s $1,095 just for the acquisition fee, and there are no incentives/discounts for leasing (assumed, without researching).

Have you compared the lease figures with financing?

4

Get an X5. Numerous brokers have them for 9-10% off + incentives. Some in stock units.

1 Like
5

Yes, I am aware that it translates to 6.72%. Mercedes-Benz financial’s lowest interest rate offering for financing is 6.88%. This will also require a large down payment. Given this inflationary market, I expected the MF to be as close to the Prime Rate as possible. In this case, it is slightly higher. I do not forsee it coming down in the next 24 months.

6

There are plenty of other financing options with much lower interest rates.

3 Likes
7

Look at the credit union thread. There are still some under 3%

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