Outstanding. Now you know you have an $8700 offer on your trade if you find a build you want elsewhere.
Late to the party but getting ready to pick up a GLE450e in California in late January or early February. I ordered the car (had specific options preferences that I couldn’t find in one vehicle) and MSRP is $87,230.
I’d like to save as much money as possible. Sounds like the lease then buy option should be considered but I’m a total noob, never leased a car and am not sure how to go about figuring this out.
Can someone walk me through this? And if you go down this path, does it matter what the lease payments are considering you intend to buy out asap? And should you max your down payment to minimize buy out financing costs if you can (and what’s the largest downpayment they’d accept)? And does it matter whether you do a 10k, 12k or 15k lease or even how many years you sign up for if you intend to buy out early?
Appreciate the help here.
Hi Mike - I am the original poster and wanted to give everyone an update and also let you know what I considered in order to pay for my car.
After back and forth with the dealer, contacting other dealers, and viewing the options I had on LH, I opted to custom order the GLE 450e for a lower sticker price (the models off the lot did but have some of the options I wanted, like 4-zone climate control).
I looked into various payment options like multi-year leases, lease to own, financing, one-pay leases, and all cash. My ultimate goal at the end of the day was to own the car outright. I don’t want to get a new car after 1-2 years (my current car is 13 years old).
Ultimately, it was cheapest for me to pay all cash, including a trade-in worth about $8k.
The local dealer had a car on the lot with a $81k MSRP that he was able to get down to about $70k, but the residual I would have to pay (after a lease or financing deal) would have been more than my custom build. For what it’s worth, I was NOT able to take advantage of the $7500 EV credit because it only applies to leases.
So what I learned as a newbie is that if you want to own the car, all-cash is a good solution. However, if you are ok getting a new vehicle every few years, then leasing is potentially a better option.
Hope this helps!
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Thanks for this info! Did you explore the scenario that Mike wants to do where he enters into a lease to get the $7,500 EV rebate, but then immediately buy out the lease (presumably after the first month).
In a nutshell you negotiate to get the lowest selling price (“agreed upon value”) on the lease.
So your immediate buyout of the lease will be selling price less rebate plus $1,095 acq fee.
Plus TTL obviously
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I will - production begins the first week of January. I hope to have it by the end of that month!
I sure did - it was still more expensive to do the lease option, even with the $7500 EV credit. Of all the lease options, the one-pay lease was the cheapest. But, it was still more than the all-cash alternative.
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Huh that’s really interesting. You can tell from the posts on LH (and the most recent one from Max) that the presumption is the lease-then-immediate-buyout approach is cheapest to capture the $7,500 EV credit.
But maybe MBFS is paying some folks to figure out how to pocket that $7,500 to the lender; so it’s like fool’s gold to do the lease-buyout.
Not sure which scenarios you were comparing, presumably the leasing scenario involved riding the lease and buying at RV at the end?
We are talking about paying off the lease within the first month. There’s no way paying cash on day one is cheaper than leasing followed by all cash on day <30
Here is the scenario I was referring to.
Car on lot was $81,010 MSRP (it included a whole bunch of stuff I don’t need, did not include options I wanted, and wasn’t the color I wanted). I looked at leasing for 24, 36, and 48 months plus buyout at the end of the terms. The cheapest option there was the 24-month lease plus a $46k residual. Total price for the car after the 2-year lease ended was $91k. The 36 and 48 month options were closer to $96k and $100k respectively. All options included the $7500 EV credit.
A one-pay lease was $42k plus a residual of $46k so it ended up totaling $88k. This includes the $7500 EV credit.
Financing prices were way worse. Cheapest option was 36 months but it would have ended up costing $96k. Obviously, this didn’t include the EV lease credit since it’s financed.
My custom build ended up being about $77k MSRP. This does not include a $500 AMEX credit, my trade-in (about $8k), or taxes and fees. My OTD price will likely be around $74k when all is said and done.
Ah ok, what Max is saying (and what is usually discussed on LH) is someone entering into say a 24 month lease with that 56% residual. But, after the first month, the leasor decides to buy out the lease then and there.
Effectively terminating the lease early but getting all the $ from the rebate since it was applied at the origin of the lease. The Leasor gives up the lease acquisition fee and probably pays some other junk. But the idea is the $7,500 rebate is worth it (along with the interest and rent charge) paid for that first month.
IMO, BEV’s just look like terrible assets to own. It makes more sense to just lease them to the end of the term and decide from there what to do. Trying to outsmart a lease structure vs cash-buy on a BEV is putting too much faith in the notion that BEVs perform like normal depreciating vehicle assets.
Not sure how that’s relevant here?
@holeydonut This is about PHEV not BEV. I think in luxury segment GLE 450e is the best one out there. I so wish X5 catches up in regards to range and DC fast charging.
PHEV like GLE450e has a good “good day” pure electric range of 58 miles and ~ 67 miles city driving (as per Kyle’s Out of Spec review). Additionally, it offers DC fast charging capability.
I wonder since this battery would be charged on a daily basis and in some cases few times a day how long before it deteriorates. Can it withstand DC fast charging often ? Is it of same quality like EQ BEVs ? What warranty it comes with ? – unable to find this info online.
@Mike_A1 My strategy for GLE 450e would be to (Guru’s like @max_g and others feel free to critique – I am learning the craft myself):
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First build a custom configuration using MB website and see what is total price including destination charge.
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Find a closest match or prepare to do a custom build
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Decide on a price you are willing to pay which would dictate percentage off MSRP
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Add $500 AMEX credit to get further discount
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Find out base money factor for lease of GLE 450e, try to get dealer to eliminate or reduce mark up
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Consider use of MSDs to bring down impact of interest rate even further down (only if you plan to lease for significant time because you are waiting for financing to become favorable and you don’t (or can’t) want to pay for this car in all cash)
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Now bring in $7500 rebate into calculation
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See what your monthly payment comes to, what will be residual and how much are you effectively spending over time period of your lease – all of this using LH Lease calculator.
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Keep fine tuning either your custom build or MSDs or ideal discount you wish to get
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Approach all local dealers, brokers on here and dealers from near by states to see who is willing to bite the bullet, given last month of last quarter is about to begin.
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Before signing negotiate price for various protection/maintenance plans you would like to get for this car.
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Pull the trigger
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Later on (< 1 month) one can immediately buyout with financing or cash
Sorry, maybe I missed it, but what was the amount you paid for your deal OTD?
Not sure why the residual matters, if we’re looking at all-cash deal vs. immediate buyout?
I haven’t paid for it yet but think the OTD price will be around $74k. The car won’t arrive until January.
You should have at least the selling price in writing and the rest is easy: 4.15% sales tax plus the dealer fee.
Don’t buy it until you’ve investigated the scenario of leasing and then paying it off within a month.
Then you missed the entire point of doing an immediate buyout to capture the $7500
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And she’s missing the opportunity cost of earning interest on that huge cash purchase. Just doesn’t add up IMHO.