Should You Lease Your Next Mercedes-Benz Vehicle?

There's a sense of pride in owning a new Mercedes-Benz. It tells your friends and neighbors in Santa Monica that you have impeccable taste, and you indulge in your transportation. But other than pride, is there any advantage to buying rather than leasing?

The Depreciation Curve

Regardless of brand, body style, or class, all vehicles depreciate fastest in the first year of ownership. A car might lose more of its initial value in its first year on the road than the next three years combined. With luxury models, that depreciation curve is even steeper.

When you buy a new vehicle, the steep depreciation curve hurts when it's time to trade in. Buying pre-owned is the most economical way to get a Mercedes-Benz while avoiding the high depreciation rate, but when you want a new model, leasing is the next best option.

When you lease, you are locked in to a low monthly payment based on the vehicle's predicted value at the end of the lease term. If it depreciates more than expected, you don't have to worry about the loss of trade-in value—that's the finance company's problem.

Typical Ownership Cycles

The average car owner trades in their vehicle after six years. However, when you drive a top-of-the-line model like a Mercedes-Benz, you want the latest advances in style and technology—not something six years out of date. If you plan to buy a new car every three years, a lease can offer you significantly lower payments than a loan over a typical 36-month term. This keeps more of your money freed up for other investments.

Contact W.I. Simonson to learn more.
Categories: Finance
Tags: lease