Quote:
Originally Posted by dsad1
Just for reference, on an x5mc I am being offered a money factor of. 00086 which equates to about 2.064%
On the Mercedes they started with 8.2% and lowest they will go is 5.88%. It just doesn't make sense to lease this car, I would be better off paying cash. We typically lease for convenience and not really wanting to own these cars past three years, but there is only a certain premium I would pay for that.
I did mention to the Mercedes guy today that I am contemplating paying cash and he started fumbling a bit. He didn't seem happy with that scenario.
Also when mentioning the BMW mf, he went on how bmw's are a dime a dozen and you see them everywhere. This guy seems to be convinced he is selling exotic cars.
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It is definitely an interesting time in the car business. I was looking at an Audi SQ8 to compare to the M5Oi I just leased and while I traded an Audi I was financing, I found the leases at Audi are just ridiculous. I am thinking that Audi moved to a model where they no longer want to lease cars. They don’t bump the residual at all (like BMW does), the residuals have gotten worse and they are over charging on their money factors like you mentioned seeing at MB.
I wonder if they are looking at the ICE vehicles being worthless in a few years since they are getting so heavily on electrification? All I know is that leases on ‘comparable’ level vehicles are hundreds of dollars more at Audi now. On the message boards, people are talking about A4 lease turn-ins where people are looking for the same model A4 3 years later and the lease is hundreds more as well. And if you want to lease a loaded (Prestige) trim car, they whack you 2% on the residual. I realize that people buying used probably won’t pay the difference for the higher end features vs the ‘standard’ Premium trims but it forces a lot of people to not lease because the monthly payment is much higher than the competition’s similar cars.
I’m not saying the luxury car market needs leasing to be successful but if you look at Audi’s sales last year, they weren’t as successful in terms of growth/loss compared to the year before as BMW.
I think they are making the bet against leasing but who knows. MB may or may not be doing the same. Let’s face it, we all pay more for our BMWs to cover the expected losses that come with leasing. We’re all just financing those residual value losses.
In terms of MSRP, car dealers and manufacturers have set up a system where the entire process is built on a lack of trust. Consumers don’t trust the sales person and dealers, the sales people don’t trust buyers, etc. I’ve seen dealers try to do the ‘one price’ approach and have it fail miserably. Because MSRP is basically a joke, and invoice pricing now is not much better, everyone feels like they have to go into battle when they buy a car. Sorry, not everyone, but I think there is a bell curve of sheep, assertive and then aggressive shoppers and the curve skews way into assertive and then aggressive for the volume and sheep for the profit. It is set up to grab as much volume from the sheep to make more money per car and then bump up volume with discounts for the assertive/aggressive buyers (bonuses, holdback, etc).
With a moving target, there is no way a reasonable person knows what a ‘fair price’ is. So folks like us try to get an idea by reading experiences on these boards and many,many others have no idea. The assertive/aggressive folks get mad if they don’t get the same discount as someone posting here (and not everyone even understands the total cost of their deal so how do you discern those posts??).
The market is a mess and the dealers and manufacturers like it that way. There is obfuscation at every level: sales price, financing, warranties and service plans, etc, etc.
It is not a good model so most people detest the process. And if you are lucky enough to have more competition in a market with multiple dealers with the same manufacturer, they either deal in price fixing or you can get a more fair price due to the competition - again, depends a lot on which market.
Luckily, I have 5-6 dealers that are within a 1 hr drive so competition is fairly healthy. I also like that BMW had a VERY reasonable money factor. It is evident that they are still in the lease game.
MB may be going the way of Audi - away from leasing toward a finance model or they may just be doing that on the GLEs because of popularity. Time will, tell which bet works best for the manufacturers but for now, I would look at the overall cost of whatever you are doing - lease or purchase - and if you can’t get it locally, go to the MB boards and see where people are getting the best deals and see if you can do an internet transaction with delivery. Might be worth it.
I will get off my soap box now but this entire model is such a joke. For many people, they actually like the ‘game’ (I’m a bit sick because I am one of them) but there are plenty of people that just don’t have the desire or ability to do that and they are keeping prices lower for all of us since they provide the profit the dealers need.
Rant off . . .
