Residual on Mercedes Prepaid Maintenance

Does anybody know how Mercedes residualize their prepaid maintenance on lease?

Do I just add the cost of the maintenance on top of the MSRP or does it bump the RV by certain % like audi does?

Much appreciated

It is added to the MSRP and residualized. MB does not do it like Audi

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awesome, thank you so much!

The buy rate price is residualized, but not any additional markup from the finance guy.

For my last car, the buy rate price for the 2/20K plan was $890. While signing I agreed to add $15 to my monthly to add the plan (he initially wanted $20). When I saw the contract, he added $1k to the lease cost, but the residualized amount included only $890.

You can find the buy rate by configuring your car on the Mercedes website. The last step is pricing out the maintenance plan. In negotiations make sure you get the buy rate price or as close to it as possible. In my case it added $542 to my total cost which was good enough and I was sick of haggling.

It’s MSRP, not “buy rate price”. Buy rate refers to MF.

But yes, it’s important to know how leases are calculated and how each line item affects your payments. MB PPM can be added to the net cap cost at MSRP (there’s no reason for the dealer to discount it further when MBFS will residualize it). There’s also no reason for a consumer to pay more than MSRP.

Sorry, can you explain a bit about these numbers?

The MSRP of my plan was $890. So my residual was increased by $890*57% = $507.30
The Finance guy charged me $1K for the plan, so my net cap cost increased by $1K. He credited my drive-off by the first month’s amount of $15.48 so that my DAS didn’t change.

So the cost of the maintenance plan for me was $110 (Finance markup) + $382.70 ($890*43%) + interest, or about $542.

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For my knowledge, if the loaner has been serviced, The PPM is not residualizeable

Just FYI

Thank you for the explanation. I still have some doubts about these numbers.

Let’s say your MSRP without the PPM plan is $50000 and RV% is 63%. With the PPM, your RV on the cocntract now becomes (50000+890)*63% now?

In my case, the PPM is $1100 and RV% is 63%. But my RV on the contract is still MSRP*63%. The PPM is not included. Do I miss something here?

Thank you!

yep - when I got my loaner (CPO) lease finance manager was adamant that he cannot residualize PPM

Sorry I’m not understanding. Why would he charge 1000 to your cap cost if the msrp is less than that.

The charge of 1000 seems random and doesn’t have anything to do with “residualizing” the PPM.

Was the 1000 just due to the negotiated price between you and him. I ask because I was told that these numbers for PPM are set by Mercedes.

Let’s say you build the car on the website the msrp goes up a certain amount and your net cap cost goes up the same doesn’t it

Um…have you ever signed for a car with the finance guy? They will try to sell you all sorts of stuff for max markups if possible.

In my case he was only willing to price it in terms of the monthly payment. He started with adding $20 to my deal and I said no. When I asked how much he was adding to my cap cost, he was evasive about it. Then $18…then $15. I had my kids with me and wanted to leave by that point. In the end it was a $3/mo difference if I had gotten it for $890. It was good enough for me to have the convenience of a loaner from the dealer vs a local mechanic who wouldn’t offer that.

When I asked about PPM in negotiations with other dealers, they also said to add $20 to the monthly. So that seems to be the standard markup for the finance guy.

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If the dealer is not negotiating on the PPM and charging a premium, does it make sense to forgo adding the PPM at the time of purchase/rolling into payments, and instead buying the PPM package from another dealer after the fact, and before the first scheduled maintenance? (At least I think you can do this?). Any downside to this approach other than paying the PPM upfront/out of pocket?