Posts Tagged ‘Kelley Blue Book’
Your lease has come to an end and you really like your used Mercedes so much that you wish to keep it. Just like buying a regular used car, buying a used Mercedes, there is a little research required for you to receive a good deal at the end of the lease.
There are basically three things you need to research:
1.) Cost of buying out your lease
2.) Determine actual market value of your Mercedes
3.) Compare the two values
So, as we stated, the first thing you need to do is find out the cost of buying out your lease. Get into the fine print of your contract and look for the “purchase option price”. This is a price set by the leasing company and will contain the residual value of the Mercedes upon conclusion of your lease and the purchase option fee. When you signed the lease agreement, the monthly payments were calculated as the difference between the Mercedes sticker price and the estimated value upon conclusion of the lease, plus the monthly fee for financing. The estimated price upon conclusion of the lease is the residual value. This value is the expected depreciation of the Mercedes over the term of the lease. So for example, if a Mercedes had a sticker price of $50,000 and a 25% residual percentage the the estimated value at the end of the lease would be $37,500.
Now that we have the first item, we need to find out the actual value or “market value” of our Mercedes. Ask yourself, How much does my Mercedes retail for on the market if I was to sell it today? This is where some pricing research comes into play. Check out the prices of Mercedes in similar conditions with different dealers. You can use Kelley Blue Book, local dealers, online dealers, EBay etc.. Data collected from these various sources should give you a fair idea of the market value of your Mercedes.
All that remains now is for you to compare the two amounts discussed above. If the residual value calculate above is lower than the retail value you found in your research, you have a winner. Sadly, the chance is there that the Mercedes at the end of it’s lease will be on the high side.
You should not despair, leasing companies take this into account and are always providing special deals and offers. With some negotiating, you can get the price knocked down on that leased Mercedes. Offer up a price that is below what you are actually willing to pay and negotiate from there until you end up near that actual figure that you are willing to pay.