Hey guys. I have 6 months left on my mercedes lease (end date is around Jan 15, 2022). I have a ton of miles left since I did not drive much due to covid. I wanted to find out if I will come out ahead if I sell the car to vroom or carvana instead of simply turning the car in. Looks like I might. But I had some questions and would like to hear your thoughts
Carvana is willing to pay me $30K
Mercedes pay-off quote is $29K
So I called Mercedes to see find out how exactly they came up with $29K. And here is a rough breakdown - Car cost left $25K, $1K (4% early penalty), $600 disposition, $2.4K in taxes.
Questions and dilemma
If I let Carvana buy this out for me, I will not be charged the $2.4K taxes in the pay-off, correct? So, the real pay-off to Mercedes is $26.6K ($29K minus $2.4K in tax)? By selling to Carvana for $30K, I end up pocketing $3.4K. Is that a correct understanding?
Now, should I wait a few more months so the early penalty fee and disposition fee will no longer be charged. If so, when exactly does Mercedes not charge early buy-out penalty? 60 days within lease end date? 30 days within lease end date?
What if I make the 5 payments right now that are left? Will they not charge me the early buy-out penalty? May be it doesn’t work that way I guess, right? : )
I don’t have plans to drive much in the next 6 months as well. So I am probably not going to use more than like 1K miles. Is it too risky to wait it out for say 4-5 months? In 4 months, if carvana’s price drops from $30K to say $29K, I might still be ahead by not paying the $1.6K in fees today ($1K early penalty plus $600 disposition) and also get to keep the car for 6 more months. But is it too risky to wait? Should I take the money run? Thoughts?
I don’t know if MBFS is doing third-party buyouts right now, you’ll need to search around.
Two things: you need to call MBFS for the dealer (tax free) payoff, it’s not always calculable by hand. And, there is (usually) no disposition fee or penalties if you buy a lease out. Dispo is generally only paid when you return a lease at term. A fee could be baked into the dealer payoff amount.
Ouch. Was it recent? I remember speaking to swappalease few months ago, and the swappalease agent said that only transfers are not allowed my mercedes and swappalease can still facilitate like a dealer so I dont have to pay tax! Is that incorrect?
Oh by the way, the contract definitely has a 4% early buy-out fee and vehicle turn-in if fee under “Standard Lease - Early Purchase Option Price” clause
OP in that thread confirmed at the end that he was able to sell the car to carmax. I got dealer payoff quote from MBFS a few days back and they didn’t tell me about any restriction. Having said that it’d be good to confirm with MBFS as this can change any time.
