I don't think they can charge for excessive mileage if you buyout the car at the price they give. If it is $48k, and you can find someone willing to buy it for $43k, you only lost $5k...not bad at all!

 

but wait, there's no way that the buyout now is $48k - it's got to be something more like $65k or $70k. That must be what's left on the lease amounts. Just call MB Credit and ask for the current buyout amount - you'll probably lose about 20k on the deal, at least.

 

weel thats what they told me at mercedes that the buy out amount was 48k....

ill call them back again.. tomorrow to double check,,

 

yep, if u buy it out, they don't care about the miles.

 

joe,
i feel u man. lease is tricky & i hate it. it's only for people good in numbers.

 

if 48k is the total buyout, you are golden

 

If you own your own business, it can be very nice!

T

 

EXACTLY

 

3 choices
1-make remaing payments......take hit
2-use buyout.......take hit (make sure it doesn't include tax)
3-most leases forgive your estate

 

I really hate leasing. Did it two times... and it cost me a hell of a lot of money both times.

I know about all the tax advantages you have by leasing a car... but to me it's an emotional thing. I am not going to lease a car again. I want to OWN a car and I don't want a third party involved.

So, if you tend to change your car more than once every two years, then never ever lease it. No matter how attractive a leasing model appears, to me it always caused trouble at the end of the day.

 

TUUNER

I too am on the sidelines with leasing cars.. I own my own business and have heard leasing for tax purposes are a thing of the 80's..

I would love to hear a second opinion on this subject as I would like to lease my next car for tax purposes..

Thanks in advance,
Dn

 

In fact, someone who changes more than once every two years benefits pretty well - in say California. Say you want a $100k car. Assume residual is appx 50% or $50k for a 4 year lease. The sales tax (7.75% here) you pay on the car is based on the $50k (the portion you use). It looks like $50k * 7.75%/48 months = $80.73/month. You purchase the car through check or finance and you pay $7750 up front when you buy the car. On a lease though, you pay $80.73/month. Keep the car for a year and your sales tax for driving the same vehicle was less than $1k and less than $2k for two years.

After factoring in the sales tax savings, you'll next want to look at the after tax opportunity cost on both the down payment and principal payments on the loan while you have it or the full amount should you decide to write a check. For example, I wrote a check for my 996 four years ago and have forgone any return on that money to help offset the $50k in depreciation. On the other hand, I just leased a $200k+ car that will run me 2.6%/yr (less what I can make after tax on the money - a hell of a lot more than 2.6%) if I keep it for 2 years or so and taking into consideration the sales tax saved.

After factoring in these two financial reasons, assume the car is in an accident which causes $10k or so in damage. The car won't be totaled and the insurance company will fix it. Trade the car in or sell it when you tire of it and you'll take a $10k diminished value hit. On a lease, just turn the thing in at lease termination and tell them to have a nice day.

There really are a ton of reasons for leasing, and only some of them are purely financial. Then again, do the math on something like a $460k CGT!

 

I have to agree, 48k is the remaining amount on the lease. Pay the car off and sell it privately. I've done this 3 times now with not too much out of pocket. Of course I don't put 60,000 miles per year on any of my cars.

 

Good points, Ben, but what about the remaining lease payments? When you close a lease early, the leasing company wants the buyout amount (residual at THAT time of the contract, not the end) AND the remaining lease payments, adjusted to essentially pay the interest alone. It ends up to be a bigger hit than you are inferring.

 

I agree the amounts got to be more like 65-70k. 48k is just the remaining lease payments, she still has to pay the residual value.