I just leased a 2026 GLC in SoCal. It is a 24/7500 lease with all the current incentives and the car has an MSRP of nearly $58k. Inventory on cars with specific specs is very low so I was excited that I found the right car. I negotiated $1500 out of pocket and $500 per month. I know we learned here not to negotiate payments but with all my crazy deals of the last few years I had never an issue with it. The deal is not super crazy but also not terrible. Not only I found the exact car I was looking for, I thought I got it also for a decent deal (I still think it is a pretty good deal). In the finance department as I declined as usual all the shenanigans they offered me. Towards the end the finance manager told me “I will give you the maintenance for 24/10k miles under my cost and build it in into your lease. It will only increase your payment by 9 dollars and some change per month”. I thought I can’t go wrong with 9 bucks per month and said lets do it. My payment went up to $509 and some change and everything for my total cost looked legit.
Now looking at the paperwork, the maintenance was itemized in capitalized gross cost for $2150. Also my residual is roughly $1000 more than it should be. It seems that is how he made it work for $9 bucks per month. I guess when I keep the car for the total duration of 24 months and return it at the end, the $9 per month will be all what I will be paying and even if I use the service only once, that would be fair deal. But what happens when I do lease pull ahead 6 month earlier? I signed a contract for $2150? For lease pull ahead, they wave the base lease payments but I still will owe them money for the maintenance, right? Also in case I want to take over the lease, I will be paying over $1000 more for the car. That is by far more than the $9 bucks per month the guy told me it will cost me.
How much will I owe extra if I do a 6 month lease pull ahead for the maintenance, or will be included in the pull ahead?
Will I be paying really $1000 more for the car in case I take it over (it really seems like it).
What happens when I cancel the maintenance contract. In California we can do that within the first 60 days. Do I do it with the dealership or can I do it directly with Mercedes Benz Financial?
Most likely I will try to cancel if it brings down my residual by $1000 and my payment again to 500. I still think even with the maintenance plan I got a decent deal but I will feel better to cancel this maintenance plan and pay for the one service I will have to do out of pocket. Thank you in advance for your input here!
Here’s one simple trick to save money: Don’t use a dealer for service if you have to pay for it. A and B service can be done by any certified mechanic. You’ll pay 1/3 as much vs the dealer price. Your warranty is fine and you are not violating lease terms.
Dealers charging $400 for an A service which is basically an oil change is criminal.
Thank you! I was honestly caught fully off guard in the finance department. Almost all my cars in the past had maintenance included and I assumed it will be the same with the GLC. I thought even if it is just the oil change the roughly 200 bucks of total cost would be ok. Now retrospectively I see that it is much more complicated than “just” the 200 bucks. That is the reason I will try to cancel if possible and just pay for that one oil change. Would still love to hear from the experts about the details.
One thing I forgot to ask, which will answer one of my questions: Does anybody know if the current Residual for RWD GLC300 is 66% across the board or does it depend on the MSRP and other included options?
My understanding is that it is residualized by adding it to the MSRP (so it is not an RV% bump, like Audi, but I think the same RV% but higher absolute number for the RV). And, as such, I assume there is nothing you have to “pay back” for the service contract if you utilize a pull ahead program (which I don’t think is always offered).
Thank you for your answer. I think the RV for these cars is at 66% and going of my MSRP it should have been $38115. With the service contract added it is 39118, almost exactly $1000 more. Since the other numbers look the same and the payment went up only 9 dollars and some change, I think that is the only way to make a 9 dollars extra payment work on a $2k service contract.
You can residualize certain amount along with the payment.
so, example, if the cost is $800, and selling price is $1000, but you can only residualize $600, so the $600 with be affected by the Payment. Which is usually (average) $20+ added to the payment.
pull ahead is just the payments covered by LAP, and there is refunds to PPM
If you do a lease pull ahead they will waive the remaining payments except for taxes. You will not have to pay for the maintenance plan separately. Because you only leased for 7500 miles, you will only need a Schedule A service at about 10K miles. You should check with MB to understand how canceling the maintenance plan will affect your lease payment. I think it is usually given as some type of credit, not a direct refund. You added $2K to the cost of your vehicle, some of which was residualized. You should be able to back calculate how much of the $2K was residualized and figure out if it really is only costing you $9 a month. My guess is it is much more than that, but the dealer rearranged the deal to make it appear the payment only went up $9 a month. The Finance guy probably made over $1K in profit on that maintenance plan.
My payment went up by only 9 dollars but also my residual went up by $1003 (at least that is what I think). The RV for the RWD GLC300 for my are is 66% but the RV I have is $1003 higher. If I keep the car for the duration of the 24 months and return it, the 9 dollars per months seem to be my total extra cost. If I decide to take over or sell the car earlier it will cost me 9x23 plus $1003. That is one of the reasons never trust a finance guy no matter how trust worthy they look like. He lied in my face and said the RV is purely based on MSRP but he clearly increased it here. One good thing about this contract is that it says I can cancel at anytime and get full refund for the unused portion. I will call MB financial to clarify few things and report back.
So if your RV went up by $1003, then is sounds like about $1520 ($1520 x .066 = $1003)) of the cost of the maintenance plan was residualized assuming RV percentage stayed the same. That leaves another $630 to be paid somewhere in the deal. Over 24 months that is more like $26 a month not including the interest on the total amount. The Finance guy had to move numbers around somewhere to get your payment to be only $9 a month more. Let us know how this works out.
I called MB USA and MB financial SVS both didn’t have a clue. The increase in RV is my assumption, I don’t see anywhere else room for playing the numbers. Since my payment went only up 9 bucks I am thinking to leave it alone and call it a day but I am still super curious how this whole things came together. The good thing about this maintenance plan is that it says clearly I can cancel anytime and get refund for the unused portion so I think the risk is not that big.
All this consternation for you is based on what may or may not happen in 18 months. Deal with it then. If it turns out you want to do a pull ahead, worry about it then. It may end up being nothing it may end up being something. You don’t even know if 6 month pull ahead will exist then. Of if you’ll want another Mercedes. Absolute worst case scenario is you keep the car for the full two years and paid for $216 for maintenance for the full 2 years.
Totally agree! Right now it is mainly for my own education why I am trying to dissect this deal down so for the future and the next deal I know what I am getting into.
In order to really dissect it you would need to know all of the exact inputs of the original $500 compared to the $509 you signed for with the maintenance included.
It’s possible they increased your discount or cut the MF (if it was marked up) in order to massage things to keep the payment increase at only $9.
Personally I would cut the finance manager a little bit of slack especially if you’re unsure of the above deal inputs. Adding a $2k maintenance plan to your deal is going to increase the RV, it wasn’t some nefarious plan to force you to pay $1k more if you want to buy it out. Grabbing prepaid maintenance for $9/mo is a pretty good deal that I think most people would jump on.
Heck I had a GLC and my first A service was $350ish at a local indy shop. Getting it for $216 spread over 24 mos. is a no brainer.
Unfortunately I don’t have the details of the original agreement. We just agreed on 499 and some change per month including tax and 1500 out of pocket. They had also roughly $12800 off MSRP for a $57500 car. As mentioned earlier, I didn’t negotiated the way we are supposed to, I negotiated payments and total due at signing. It seems that after adding the service contract the total discount off MSRP is now few hundred bucks less which makes it even more difficult to understand how he tailored this final new numbers together.
The finance guy told me he will give me the service plan below cost, what I am not sure of. But I agree with you that $200ish for 2 scheduled services is pretty great and if I don’t use the second one I even get a refund for the non used portion.
