Boy do I wish I knew of this website before entering into a massive contract that I now think I got absolutely railroaded on.
I admittedly am NOT a car guy and really didn’t know the in’s and out’s of leasing so much. So I go to this Mercedes dealership to try to offload a car I have with some negative equity and try to get into a used car. Found a decent used cheap Tesla that I was ready to buy (want to stick with EVs). Problem was, no banks were willing to roll the negative equity into the new loan because of the 120% rule, requiring me to pay 11k up front. I was just about to leave when sales guy suggested I just “try” an EQE and man, all rationale just went out the window. I’ve never been blown away so much by a car, to the point where I just went along with whatever was being put in front of me (I also had been at the dealer for 5+ hours at this point by the time paperwork was in front of me. Maybe on purpose?) Anway, here’s my lease. Please give it to me straight:
Location: Los Angeles, CA
Model: EQE SUV 350 4MATIC
MSRP: 86,000
Price: 76,000
Amex discount: 2500
Lease Incentive: 7500
Down Payment: 3,000
Term: 48 Months
Negative Equity rolled into Lease: 11,000
Monthly Payment: $1199
I was just so focused on the discount and the lease bonus, I thought I was getting a good deal. But then reading in here I’m seeing so many people get 15%+ off MSRP alone, I’m getting the feeling i got ripped off. What are your thoughts? Do I have any options? Just took delivery 2 days ago
Side note: Car lost all power 5 minutes after driving off the lot while I was on freeway and had to be towed back to dealer where it sits now :(.
It doesn’t feel great telling you you’ve started the new year off rocky to say the least. It’s advisable to separate trade-ins as individual sales and having a separate transaction for a new car lease. Honestly, with a quick search here you can see what people are paying for an EQE. Not only that but there are several brokers here, who for a small fee would’ve saved your 5 hours at the dealer.
Dealer discount (not enough), and 11k of neggy. Try not to be flipped that much when selling in tbe future. I think best ter.s (MF, RV) are with 36 month.
Hopefully its a lemon and benz buys it back. Not sure what happens to the neg equity in a situation like that.
Ok first things first: As others said, sorry this is how your year started.
Can you post more details? I am sure the there are “add on” products in your deal. What are they?
Can you take your best attempt at a LH calculator? Or post redacted sales order and lease sheet?
How do you figure negative equity of 11k? Did the dealer tell you this or did you know by getting a few appraisals?
Lastly, get a copy of the PDI from the dealer. This is a pre-delivery inspection report.
Also have the service department give you a history of vin servicing. Lemon law is by vehicle, not owner. If the vehicle had this issue previously that the dealer tried to fix, lemon law or the dealer failing to disclose maybe your out.
11.6% off MSRP isn’t bad for a completely wrong strategy of walking in with no preparation and no target. Discount by itself doesn’t mean much. 11.6% off at buyrate and $85 doc fee might not be too far off from 15% at .00040 markup and $999 in fees. Or vice versa.
TLDR discount by itself doesn’t tell you everything.
Obviously the huge amount of negative equity is going to destroy the payment. What was the impetus to reborrow $11,000 at such a high interest rate and pay almost 10% sales tax on top??
I’ve never had a trade-in or neg equity so I probably don’t understand what’s going on here, but what else could he do? Just keep the old car in the garage and keep making payments?
Usually the best thing. Keep driving it, pay down the loan as fast as possible was always my answer.
One other lesson I learned to try to get your car paid off in 48 months. 60 is too long. You can finance it for 60 to give you some room if something happens- but pay it off in 48. I did that with my last finance- took a 60 month and paid off in 30. Yeah the rate was a little higher- but I also had protection if something happened with my income or finances that gave me more time if I needed it. If I can’t afford to pay it off in 48- I won’t buy it.
Hard to say without more info. In the micro sense, keep paying off the car including extra principal payments to reduce the negative as quickly as possible.
In the macro sense, usually a result of a series of bad decisions which require a change in lifestyle to rectify. For example if someone can sign a lease when they don’t have the cash of just 10 payments on hand it’s a bad sign; they’d need to spend less and save more.
In regards to the negative equity, it was for a trade in and they were willing to give the highest value compared to other dealers, though still left me with 11,000 negative equity. They gave me the option to pay that off, but I asked to roll it into the new lease.
I’ll provide any additional numbers once I have access. My paperwork is in the car and the car is in the shop as mentioned.
