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Discussion Starter #1 (Edited)
I am trying to decide how should I buy my new CLA.

I was going to pay fully but then I saw financing is 1.9% and it makes more sense to finance the car.( looking at 5 year finance and some down payment)

On the other hand my SA sent me a leasing option, I never did leasing btw, so its 3.9% on 36 months. Still not bad because no down payment. But it won't be my car, mileage limit(ok with me) , I will hand the car in in 36 months and I have no car lol.

So I want to ask to people who did financing and leasing before and give me some opinions.

If I finance the car and try to sell after 3 years I am pretty sure I can sell it higher than what is on the lease contract.( residual value). I can modify the car,its my car etc etc.

On the other hand, I don't pay tax on leasing, people say there are wear and tear fees, I can't touch the car and higher insurance fees.

So any opinions from guys who experienced these thoughts? I know it comes down to personal preferences but not as many 45 on the road and still with lot of waiting time, if I want to sell the car in 3years I don't think its price will go down %50. Maybe %20,%25.

What are your thoughts?
 

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i am going the lease route because i see the car could be hard to sell when it's that easy to lease or finance a new one rather than buying 1 generation behind 3 years down the road. but i am going with a cla250 rather than cla45 so you may be in a different boat.

but at the same time i am also contemplating if i should just buy the car outright and sell it down the road purely speaking from wanting to spend less money in total. tough choice lol
 

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now here is how nuts i am. i waited almost a year for my cla 250 4matic to come in. that allowed me to do a 2 year lease and pay it in one payment. so far so good, right? well i cant stand not having a car payment so i bought a 2009 porsche cayman from carmax. now i have a play car and my "work" car. does it make sense? no , of course not , but im having great fun! especially at age 70.... IMG_0093.JPG
 

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I used to be a finance only person. But this is my rule of thumb.

American Cars: Hands down... LEASE they are basically worth nothing after 3 years (though I love them)

Japanese Cars: Hands down ... Finance, the likelihood youll get a good trade in/ selling price for a Toyota or Honda is so high, even after a few dents and dings.

Korean Cars: Finance, with the anticipation that it will stay with you, be handed down, or you are not going to get money back

German/European Cars: Its truly a toss up. If you live in an area where accidents, dents, or potholes are popular, then I'd lease. Because if the population is high and in close proximity with numerous cars and taxis (i.e. NYC) then the likelihood youll have incidents or depreciating accidents is high. And if it does happen it "comes out of your pocket". If you have an accident in the course of the financing, your car ha a depreciation jump, which will hurt you when you trade it in. If you plan on having it pristine, then finance.

IF you anticipate some sorts of dings or hard use, then lease. Lease makes it the banks problem if you got dings and collision work done.

In either case, large dents and dings are going to cost you, it may hurt your selling point if you finance, and also may cause you "excess wear and tear" fees in a lease.

But if you get in a collision and repair it, it will depreciate your car for financing, and ultimately affects your pocket. In a lease, it becomes the dealers/banks problem.

I recently moved from finance to lease, also from Japanese to German cars.
 

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I used to be a finance only person. But this is my rule of thumb.

American Cars: Hands down... LEASE they are basically worth nothing after 3 years (though I love them)

Japanese Cars: Hands down ... Finance, the likelihood youll get a good trade in/ selling price for a Toyota or Honda is so high, even after a few dents and dings.

Korean Cars: Finance, with the anticipation that it will stay with you, be handed down, or you are not going to get money back

German/European Cars: Its truly a toss up. If you live in an area where accidents, dents, or potholes are popular, then I'd lease. Because if the population is high and in close proximity with numerous cars and taxis (i.e. NYC) then the likelihood youll have incidents or depreciating accidents is high. And if it does happen it "comes out of your pocket". If you have an accident in the course of the financing, your car ha a depreciation jump, which will hurt you when you trade it in. If you plan on having it pristine, then finance.

IF you anticipate some sorts of dings or hard use, then lease. Lease makes it the banks problem if you got dings and collision work done.

In either case, large dents and dings are going to cost you, it may hurt your selling point if you finance, and also may cause you "excess wear and tear" fees in a lease.

But if you get in a collision and repair it, it will depreciate your car for financing, and ultimately affects your pocket. In a lease, it becomes the dealers/banks problem.

I recently moved from finance to lease, also from Japanese to German cars.
All good points. Here are a couple of other considerations. I get tired of a car after a couple of years, and , they are so complicated these days, I like to keep them in warranty. Since I retired, I don't even drive 10,000 miles a year. All this makes leasing fun for me. My wife on the other hand, buys a new car, and will run it until the wheels fall off. She never washes it, puts gas in it, or takes it in for service. I take care of all that. So for her buying makes more sense, even though she drives less than I do. What that does, is gives us equity in her car when it is finally time to trade. I usually force that issue when her car starts to nickel, ($500) and dime ($1000), me to death. She also likes the no car payment for a few years. Me, I'm resigned to having a payment the rest of my life. The real key is staying under the mileage limit on the lease. That 25 cents a mile can add up quickly. So, if you you want the latest, greatest, and don't want to have any repair bills, lease. I don't find much price difference in insurance costs between leasing and buying.
 

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First off you do pay tax on a lease. You pay for the amount of time you have it. $400 a month for 36 months would be around $1000 at 7%. After the lease is up, if you want to buy it for the residual or whatever they negotiate with you before the lease is up, you pay the rest. So say residual is 20k you owe $1400.

Second a lease is yours. It's just as much as yours as a buy is. Which until it's paid off they both belong to the bank as they hold the title ;). You can do WHATEVER you want to a lease! In 3 years, 3 months or 3 days you can buy the car out from them at any time. It's no different then buying a car financed through key bank only to refinance with PNC down the road at any time you wish. You also do not have to turn a lease in. Again, it's your car. You can trade it in to any other dealer whenever your heart desires. You have a lease buy out or pay off just as you would with a financed car. If your putting money down then you won't have to worry about negative equity. Your cars value will drop just as fast on a lease as it will on a buy, it's still a used car. I'd actually never turn in a lease because of possible fees and such. A door ding to mercedes might be a million dollars, a door ding to bwm might be nothing because it's a used car you're trading in, it should have door dings and bmw will pop them out before it goes on the used lot.

Honestly just do whatever makes most sense to your wallet. Whether leased or financed you have no idea what the used trade in value will be down the road and you'll have no idea what one salesman at one dealer will offer you vs what another one down the road will.

Ps this is my leased 13 370z, full blown track car prep






 

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You can do WHATEVER you want to a lease![/URL]
Good points, The car in a lease is as much your car as in financing until you pay your payments, it just in leasing your paying the depreciation. Again if you know youll never get in an accident or dent dings larger than a credit card, it may not hurt to finance. But who can predict the future. If you get in an issue with a financed cat, youll hurt your equity.

And with MB, you may have to confirm, because I know its true with Buick, you CANNOT modify the car, 1.) without permission from the bank or 2.) Non-manufacturer parts not installed by a dealer.
 

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Discussion Starter #8 (Edited)
I see guys, so y'all lease guys I guess which is fine cause I need some opinions

but with Benz you cannot modify the car as my sales rep told me. Not even a sticker on it. Since it is a cla45 I am not sure if I can hold myself to not do to anything to the car lol

and I am planning to keep it more than 2 years
 

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You are mistaken about how much the car will be worth after 3 years. In a lease the residual is the estimated value of the car at lease end.

Typically this value is in the 45%-55% range of MSRP for American cars in good condition after 36 months. That is a realistic value and matches up fairly well with what Carmax will give you for a well maintained car in good condition. For luxury cars it is typically in the 50%-60% range of MSRP.

For the CLA250 the residual has been consistently in the 63%-66% range since it was introduced which is a completely unrealistic value. The CLA250 has the highest residual for 12K miles and 36 months that I have ever seen and I have been dealing with leases of many brands for well over a decade.

It is very likely that Carmax will only offer between 50%-55% for the CLA250 after 3 years even with very low mileage. Cars simply don’t hold their value that well. They are one of the worst investments you can make. Computers and Cameras are the only things I can think of that are worse investments.

Trust me. You won’t even come close to getting the residual value of the CLA250 even if it is in perfect condition and you sell it private party. That is actually what makes leasing the CLA250 so attractive.

The financial institution is WAY OVER estimating the value of the car and they base the depreciation payments on their residual estimate. That means you are paying a lot less depreciation than you should be with the lease.

The money factor or interest rate is not as good as other leases but the residual is so high it makes up for that.

Now there are many other factors that can make leases a bad idea. However, if you watch the video in my signature it will show you how to identify those bad leases.

The bottom line is that if you know you will want to get a new car in 3 years or less you should at least consider the lease. The lease may or may not be a good option. However, I can guarantee that buying the car and then trying to sell it after only 3 years or less will NOT be a better option than leasing it.

If you know you will keep the car for 5 years or more no matter what then you should not consider leasing.
 

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Discussion Starter #10 (Edited)
You are mistaken about how much the car will be worth after 3 years. In a lease the residual is the estimated value of the car at lease end.

Typically this value is in the 45%-55% range of MSRP for American cars in good condition after 36 months. That is a realistic value and matches up fairly well with what Carmax will give you for a well maintained car in good condition. For luxury cars it is typically in the 50%-60% range of MSRP.

For the CLA250 the residual has been consistently in the 63%-66% range since it was introduced which is a completely unrealistic value. The CLA250 has the highest residual for 12K miles and 36 months that I have ever seen and I have been dealing with leases of many brands for well over a decade.

It is very likely that Carmax will only offer between 50%-55% for the CLA250 after 3 years even with very low mileage. Cars simply don’t hold their value that well. They are one of the worst investments you can make. Computers and Cameras are the only things I can think of that are worse investments.

Trust me. You won’t even come close to getting the residual value of the CLA250 even if it is in perfect condition and you sell it private party. That is actually what makes leasing the CLA250 so attractive.

The financial institution is WAY OVER estimating the value of the car and they base the depreciation payments on their residual estimate. That means you are paying a lot less depreciation than you should be with the lease.

The money factor or interest rate is not as good as other leases but the residual is so high it makes up for that.

Now there are many other factors that can make leases a bad idea. However, if you watch the video in my signature it will show you how to identify those bad leases.

The bottom line is that if you know you will want to get a new car in 3 years or less you should at least consider the lease. The lease may or may not be a good option. However, I can guarantee that buying the car and then trying to sell it after only 3 years or less will NOT be a better option than leasing it.

If you know you will keep the car for 5 years or more no matter what then you should not consider leasing.
Its actually a CLA45 not a CLA250, so residual value will be lot higher since there are still a 1 year waiting list go get a 45 in my province here. cla45 is $70k here and there are 2 used 2014's on sale for 65k which are at 20k kilometers. Based on that I think financing is a better option since even after 3 years this $70k car can worth $40k at least, or thats what I think.

Thats why I am thinkin of financing, do whatever I want with the car like mods, and after 3 years If I want to sell I don't mind if residual of lease is $40k and I sell it for $35k, I actually don't mind that much of difference, at least I did whatever I want with the car instead of I lease and can't even put a spoiler on it.

But with a simple math, a fully optioned 70$k amg with low milage and clean can be sold around $40k after 3 years any day worst case $35k. Thats what I think and if you go order now you still have to wait 1 year so that pushes me to finance it, I don't feel like its my car when I lease it

Again in US 45 is lot cheaper than $70k so it looks better to lease but here its expensive and hard to find
 

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I'd actually never turn in a lease because of possible fees and such.
This is probably the single biggest misconception about leases. If you have a good lease then the residual is ALWAYS higher than the actual value of the car after the lease term is complete. If the actual value is significantly lower than the residual then you would definitely not want to buy the car for more than it is actually worth.

Now I fully understand that you can negotiate the price you pay at lease end instead of just paying the residual. However, a good lease typically has a residual value that is 10% more than the actual value of the car. The dealer might be willing to negotiate up to $500 off of the residual but they simply are not going to give you $3,000 to $6,000 off on it which is what they would have to do in a good lease.

Remember the dealer still has to pay the bank or the financial institution the residual amount to get the title of the car. The dealer doesn’t own the car. The Bank or Financial institution does. The bank might be willing to negotiate with the dealer but the dealer still has to make a profit on the car so you can bet they won’t pass those savings on to you.
 

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that allowed me to do a 2 year lease and pay it in one payment. so far so good, right?
That is a terrible idea.

Pre-paying lease payments is a risky thing. If you pay the whole lease in one payment upfront and then crash the car they aren’t going to give you that money back and the insurance won’t pay a dime because you have already paid the lease off. You are basically driving around an uninsured car for comprehensive damage if it is totaled.
 

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That is a terrible idea.

Pre-paying lease payments is a risky thing. If you pay the whole lease in one payment upfront and then crash the car they aren’t going to give you that money back and the insurance won’t pay a dime because you have already paid the lease off. You are basically driving around an uninsured car for comprehensive damage if it is totaled.
that is an extremely good point that i did not consider. im still glad i did the one pay since it allowed me to get a play car as well. it is noted in most articles that what you said is absolutely true but diminishes as the car get age on it. never the less. good point.:shocked:
 

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that is an extremely good point that i did not consider. im still glad i did the one pay since it allowed me to get a play car as well. it is noted in most articles that what you said is absolutely true but diminishes as the car get age on it. never the less. good point.:shocked:
Let me describe your scenario with an analogy.

What you have done is actually placed a $20,000 bet. However, the payout is only $20,000 so even if you win the bet you just get your money back. No house in Vegas would ever try to get away with a game of chance like that because they know it is completely and totally unfair and deceptive against you.

Honestly, there is nothing O.K. with prepaying an entire lease. It is simply a $20,000+ bet with no upside because you just get your money back and a huge downside in that you could lose your entire $20,000+.

If I was you I would go into the dealer and say that you changed your mind and want to buy the car out. Try to negotiate the buyout down from the residual value. If they won’t budge then just cut your losses and take a low interest loan out for the residual amount.

What this will do is switch it from a lease to a loan. Now your insurance company will pay off the entire value of the car instead of just paying of the residual amount if it ever gets totaled or stolen. Honestly, the situation you are in right now is just simply too big of a risk.
 

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1.) Its actually a CLA45 not a CLA250, so residual value will be lot higher cla45 is $70k here and

2.) there are 2 used 2014's on sale for 65k which are at 20k kilometers.

3.)thinkin of financing, do whatever I want with the car like mods, and after 3 years If I want to sell I don't mind if residual of lease is $40k and I sell it for $35k, I actually don't mind that much of difference.

4.) at least I did whatever I want with the car instead of I lease and can't even put a spoiler on it.

5.) you still have to wait 1 year
I see you have made your decision so its moot to try to convince otherwise, but here is some food for thought:

1.) Nope, CLA45 have both a different residual and money factor campaign. And the difference I would imagine is not drastic between the two in terms of Residual. Money Factor yes.

2.) $65K is a selling price, not the worth of the car, doesnt necessarily the car sells/negotiated for that. Its inflated assuming it will be negotiated down. Plus several factors go into it. Even more so since you are in Canada.

3.) the $35K is the more realistic worth of the car after three years, if that is fine for you then, the question is closed. No need to second guess financing.

4.) You ARE allowed to modify the car with MBFS approval, and a spoiler is allowed. But yes, you dont have free will to do it on your own like with finance. But also be aware certain non-sanctioned mods will void warranty in either form on paying for the car. For a full list of terms and conditions I refer you to the MB warranty for the CLA.

5.) If you are waiting one year for the car, and the car becomes one model year old without even using it, then you have basically already at a disadvantage when it comes three years down the road (because you car could potentially become 4 model years old). This is assuming you order beginning of a 2015, get a 2015 in December, and lease runs onto 2019.

These are again suggestions. Given the CLA high residual, you are techincally paying for a small percentage of the car over three years, which I think is amazing. Youd be hard pressed to find the same in a Cadillac/ Buick (55% residual 3 years).

But finance is good too. I dont want to second guess your decision, because you seem set on financing.
 

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Plus every point made by mpgxsvcd, I endorse.
 

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Well I actually asked mpgxsvcd by private message, he told me that leasing a cla45 doesn't worth it because the money factor is high.

So most probably, I will finance it it seems.
Yeah, Money factor is one thing the CLA250 and 45 differ on, like .0023 or something.
 

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Good points, The car in a lease is as much your car as in financing until you pay your payments, it just in leasing your paying the depreciation. Again if you know youll never get in an accident or dent dings larger than a credit card, it may not hurt to finance. But who can predict the future. If you get in an issue with a financed cat, youll hurt your equity.

And with MB, you may have to confirm, because I know its true with Buick, you CANNOT modify the car, 1.) without permission from the bank or 2.) Non-manufacturer parts not installed by a dealer.
But denting a financed car will make you lose money the same way. If you try to sell it you'll be out that dents price. If you turn in a lease or sell a leased car to a new dealer for a different car that dents going to just come off the price. It's all the same hit.

I modded my Buick regal GS 2012. Turned it back into the dealer no prob! It's just a used car to them, nothing more, nothing less. If actual Buick found out they can't do anything. I'll walk into my bank, get a check cut for the pay off, hand it to Buick and tell them to get lost. It's still my car but now my bank will hold the title unlike PNC that Buick had me go through.
 

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Its actually a CLA45 not a CLA250, so residual value will be lot higher since there are still a 1 year waiting list go get a 45 in my province here. cla45 is $70k here and there are 2 used 2014's on sale for 65k which are at 20k kilometers. Based on that I think financing is a better option since even after 3 years this $70k car can worth $40k at least, or thats what I think.

Thats why I am thinkin of financing, do whatever I want with the car like mods, and after 3 years If I want to sell I don't mind if residual of lease is $40k and I sell it for $35k, I actually don't mind that much of difference, at least I did whatever I want with the car instead of I lease and can't even put a spoiler on it.

But with a simple math, a fully optioned 70$k amg with low milage and clean can be sold around $40k after 3 years any day worst case $35k. Thats what I think and if you go order now you still have to wait 1 year so that pushes me to finance it, I don't feel like its my car when I lease it

Again in US 45 is lot cheaper than $70k so it looks better to lease but here its expensive and hard to find



But that's what they are selling for. The guy who traded it in probably got hosed and they probably gave him about 10k less.
 
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