Hello,
New member of the forums here. I did read many articles here before posting.
I booked a Mercedes SUV and waiting for it to arrive. Price is 79K. I am debating between leasing vs buying. If I leased, I get 7500 discounts + Amex discount.
No discounts if I bought. My credit union offer 6% interest which I probably will go for.
From financial perspective, Is it worth to go with leasing or buying? What are the things I should watch for?
I got $7.5k + amex discount on top already. Make sure you got the MF buyrate (it should be close to current interest rate).
The other thing to consider, how do your state tax lease? Not familiar with CA, PA lease tax = sales tax + additional 3%.
The other benefit of lease, the bank is the one who’s taking the depreciation. When your lease end and the residual is higher than market value of the car, you can just give the car back and let the bank eat the depreciation. If the residual is lower than the market value, you can either keep the car, get the equity or sell the car & pocket the equity.
Lease is also much easier on your cashflow even if you choose to payoff in the end.
Thank you. What MF buyrate? Could you explain how that benefits in this situation?
For sales tax in CA, there is no lease tax.
Also, in the calculator and other SIGNED threads, I see reference of acquisition fee of $800 which only applies for lease. Are there other things that apply only for lease?
Yes. and additionally, I can see there are no hybrid SUV in the their lot and may be 1 or 2 in the 100 mile range. why would they negotiate down the price if they such low inventory.
Acquisition fee - When you get the car
Disposition fee - When you choose to return the car at the end of the lease.
MF buyrate = the apr on lease provided by the financing company, in this case MBFS. The dealer can mark it up to add their profit = higher lease for you. The easiest way to check the MF & RV on lease for specific car is to be LH super supporter. Use those info to structure your own lease deal on LH calculator or figure out how the dealer construct theirs.
Lease it to get the credits/Amex discount and then decide if you want to buy out the lease with your credit union. I would also reach out as someone already mentioned to @oarfish18 and @BENZORNOTHING to see what they have to offer before jumping off the ship
Hello,
Could someone explain to me how MSD work?
My quoted MF rate is 0.00356
If I put down 10 MSD, should i expect to change in my monthly lease payment or should i expect them to reduce my MF rate?
Thank you.
Each MSD is roughly a month’s payment. So if your lease is $488 month each MSD is $500.
What you have to calculate is whether the total savings you get is worth tying up the money. And it’s also tax free and essentially risk free. Think of it like a CD that’s not taxed.
Here’s an example. 10 MSDs that cost $5000 and reduce the monthly cost by $20. On a 36 month lease that’s $720. The return on $5000 is 14.4%. So about 4.5% yearly return, tax free. Is that worth it? Up to you to decide.
The above is just a basic example. Sometimes you’ll get 15% returns in which case it’s a no brainer to do it.
