Automotive

Should I take over a Mercedes lease with no lease return protection allowance??

  • Last Updated:
  • May 24th, 2018 4:24 pm
[OP]
Member
Sep 8, 2010
274 posts
21 upvotes
Chambly

Should I take over a Mercedes lease with no lease return protection allowance??

Hi,

So someone I know has a 2015 Mercedes CLA250 (non 4matic) . It's white on white and has 9 months left. He is transferring to the USA and his lease does not allow him to be in the USA for more than three months. He presently pays $550/month but will give me a cash incentive of $2000 and paying for the first month bringing the payments down to $260/month. I agreed to $500 for the lease transfer fees which is the deposit he gave to start and will get back on lease end.

Everything sounds great and will have a little toy for the summer, but what worries me is that he purchased no ens of lease protection for dings, damages, etc and being a Mercedes I am kind of worried as to what this could end up costing. I have never leased before and would not want to make an insurance claim for windshield repair or dings.

I would love to here some feedback/opinions on your experience especially related to the more luxury cars. Are they more picky and less lenient? I heard that many times they will waive any damage fees if you lease another but I am not interested to lease another

Thanks
14 replies
Deal Expert
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Jul 30, 2007
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read over his lease agreement on things like the min. tire treads remaining requirement, door dings/dents that is greater than what size is not a chargeable item, paint scratches of length or how deep is considered as normal wear & tear, do you see any winshield cracks/chipped now, any missing / broken parts, any cracked bumper, etc. If you see them on the car now, then you either negotiate with the current owner to have them fixed or a settlement amount which you are comfortable with and then it would be up to you to have these issues fixed down the road. Hence, that's why having an inspection at the dealer would be a good idea as well before taking over the lease.


https://www.mercedes-benz.ca/content/ca ... .0004.html
Deal Expert
Aug 22, 2011
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If you take on a new lease afterwards, all is forgiven (provided you don't bring it back in pieces).
Sr. Member
Aug 18, 2014
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Markham, ON
vkizzle wrote: If you take on a new lease afterwards, all is forgiven (provided you don't bring it back in pieces).
Why people keep saying that?
In my experience, buying a new vehicle makes no difference.

e.g. the new purchase is thru the dealership, the revenue and profit goes to them.
You return the vehicles to the manufacturer (not the dealership), and the charges if any comes from the manufacturer (not the dealership).

As far as I know, the dealership has no control over the manufacturer charges.



For OP question. Just make sure there is no damage on the car right now? And if you don't put any damage on it before you return it, there obviously wouldn't be any charge.
Other thing you need to make sure, is the tires has min 4/32+ tread, and no overdue service light when you return. (e.g. if the brake service light comes on, you will be forced to do the brake before you return)
Deal Expert
Aug 22, 2011
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pinkdonut wrote: Why people keep saying that?
In my experience, buying a new vehicle makes no difference.

e.g. the new purchase is thru the dealership, the revenue and profit goes to them.
You return the vehicles to the manufacturer (not the dealership), and the charges if any comes from the manufacturer (not the dealership).

As far as I know, the dealership has no control over the manufacturer charges.



For OP question. Just make sure there is no damage on the car right now? And if you don't put any damage on it before you return it, there obviously wouldn't be any charge.
Other thing you need to make sure, is the tires has min 4/32+ tread, and no overdue service light when you return. (e.g. if the brake service light comes on, you will be forced to do the brake before you return)
What do you mean "why people keep saying that"?
Deal Fanatic
Aug 4, 2005
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Brampton
It's a short lease. Inspect the car as if you were buying to keep it looking for damages and at wear and tear items(tires etc). If it's all good then ask yourself if you ever get door dings/ scratches regularly and where do you park. If you park outdoors on a street and you regularly visit parking lots where people don't care about their cars then I would be worried. If not you should be fine.
Sr. Member
Aug 18, 2014
602 posts
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Markham, ON
vkizzle wrote: What do you mean "why people keep saying that"?
e.g. the lease-end damage & wear charges would be waived if you buy a new car from them.
Deal Expert
Aug 22, 2011
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pinkdonut wrote: e.g. the lease-end damage & wear charges would be waived if you buy a new car from them.
Not "buy", "lease" and yes for minor dings and dents and tire wear etc...; they will all be waived if you take a new lease!
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Sep 9, 2012
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pinkdonut wrote: Why people keep saying that?
In my experience, buying a new vehicle makes no difference.

e.g. the new purchase is thru the dealership, the revenue and profit goes to them.
You return the vehicles to the manufacturer (not the dealership), and the charges if any comes from the manufacturer (not the dealership).


As far as I know, the dealership has no control over the manufacturer charges.



For OP question. Just make sure there is no damage on the car right now? And if you don't put any damage on it before you return it, there obviously wouldn't be any charge.
Other thing you need to make sure, is the tires has min 4/32+ tread, and no overdue service light when you return. (e.g. if the brake service light comes on, you will be forced to do the brake before you return)
What you’re saying is theoretically correct at a high level. However, that’s not what actually happens when you get into the nitty-gritty of things.

Let’s say the manufacturer identifies $1,500 in damage to paint and a damaged side mirror. That sucks for returning lessee, but dealer steps in and agrees to cover that if the lessee buys or leases another car.

Otherwise, lessee is unhappy with $1,500 out of pocket bill and moves to another brand for next car, dealer makes $500 on repair but misses sale of next car, manufacturer gets car returned sighing spec but loses sale of next car.

Why and how does this get worked out where everybody is happier? It happens because the dealer can make the repairs at wholesale cost internally rather then retail so maybe only costs them $1,000. Eating that repair cost allows them to earn maybe $4,000 on moving the lessee into another new vehicle. Net result is the dealer makes $3,000 while the lessee saves the $1,500 repair bill and the manufacturer is provided with a clean leased vehicle return that meets their expectations and manufacturer chalks up another sale too. Lessee is happy, dealer is happy, and manufacturer is happy.

Obviously, it’s going to depend on the type of damage, how extensive the damage is, and how much room there is in the profit on the follow-up vehicle sale in order to rob Peter to pay Paul. But since margins are generally better on luxury vehicles they have a bigger pot to play with when offsetting damage returns for the lessee.
Jr. Member
Jan 3, 2018
104 posts
44 upvotes
I would suggest that you take the vehicle to dealership for inspection. Let them tell you what's wrong with the vehicle that needs to be fixed by end of lease agreement. Inspection will cost you about 200-300 dollars but totally worth it. Based on this inspection report, take your decision and if required renegotiate with seller.
Just ask the question...don't worry what people will think...they are the same idiots who made you ask this question !!!
Sr. Member
Aug 18, 2014
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CanadianLurker wrote: What you’re saying is theoretically correct at a high level. However, that’s not what actually happens when you get into the nitty-gritty of things.

Let’s say the manufacturer identifies $1,500 in damage to paint and a damaged side mirror. That sucks for returning lessee, but dealer steps in and agrees to cover that if the lessee buys or leases another car.

Otherwise, lessee is unhappy with $1,500 out of pocket bill and moves to another brand for next car, dealer makes $500 on repair but misses sale of next car, manufacturer gets car returned sighing spec but loses sale of next car.

Why and how does this get worked out where everybody is happier? It happens because the dealer can make the repairs at wholesale cost internally rather then retail so maybe only costs them $1,000. Eating that repair cost allows them to earn maybe $4,000 on moving the lessee into another new vehicle. Net result is the dealer makes $3,000 while the lessee saves the $1,500 repair bill and the manufacturer is provided with a clean leased vehicle return that meets their expectations and manufacturer chalks up another sale too. Lessee is happy, dealer is happy, and manufacturer is happy.

Obviously, it’s going to depend on the type of damage, how extensive the damage is, and how much room there is in the profit on the follow-up vehicle sale in order to rob Peter to pay Paul. But since margins are generally better on luxury vehicles they have a bigger pot to play with when offsetting damage returns for the lessee.
What you said is 100% true, but that repair cost from the dealer is definitely coming out from the discount you could've gotten otherwise. (e.g. if you already negotiated a really good discount, say $300 over invoice, there is no way they would also fix up your old car for you)
So to me you are just deceiving yourself if you think you wound up with no cost to repair when you buy a new car.

You are right the dealer can probably fix the damage cheaper than what the (inflated) lease end charges would be, but it is probably not much different then you going privately to a cheap bodyshop to fix them. (You don't need flawless work when you are fixing it for returns)
Deal Addict
Jan 8, 2007
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mcu wrote:
Everything sounds great and will have a little toy for the summer, but what worries me is that he purchased no ens of lease protection for dings, damages, etc and being a Mercedes I am kind of worried as to what this could end up costing. I have never leased before and would not want to make an insurance claim for windshield repair or dings.

I would love to here some feedback/opinions on your experience especially related to the more luxury cars. Are they more picky and less lenient? I heard that many times they will waive any damage fees if you lease another but I am not interested to lease another

Thanks
booblehead has good advice. It doesn't matter what make you lease. At every lease start they will give you a document stating what damages are acceptable. Honda even gives you a template to measure ding sizes and scratch sizes. So there should be very little surprise at lease end. Go over the document, look at the car, inspect the tires, (with a tire depth gauge) and compare to the document. Sounds like you might be getting a sweet deal if the car is in good shape and can just give it back at lease end.
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for sure, the tires are probably (nearly) done (if it has been driven throughout the year and for the last 3+ yrs) even before you assume the lease. I believe they are runflats too. so, factor in about $350 a piece if you have to buy new.
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booblehead wrote: for sure, the tires are probably (nearly) done (if it has been driven throughout the year and for the last 3+ yrs) even before you assume the lease. I believe they are runflats too. so, factor in about $350 a piece if you have to buy new.
This. Tires on a lease return are probably the most common “gotchya”. It’s usually pretty obvious to spot dents, scratches etc and get them fixed beforehand for a few hundred bucks. But most people overlook the condition of the tires and then get surprised with a bill for over $1,000!!!

If your friend ran winter tires then you should be ok. If not, then check the tread depth and determine if they’ll still be good come return time or if they’re going to need to be replaced. Then you can assess if your friend buys new tires now or you’ll get a further allowance to replace them yourself before turn in.

It’s really hard to say though because you didn’t mention how many kilometers are on the car now? Additionally, you’ll want to know how many kilometers were allowable under the lease terms - you don’t want to be surprised with an excess kilometer charge at the end of the lease!
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pinkdonut wrote: What you said is 100% true, but that repair cost from the dealer is definitely coming out from the discount you could've gotten otherwise. (e.g. if you already negotiated a really good discount, say $300 over invoice, there is no way they would also fix up your old car for you)
So to me you are just deceiving yourself if you think you wound up with no cost to repair when you buy a new car.

You are right the dealer can probably fix the damage cheaper than what the (inflated) lease end charges would be, but it is probably not much different then you going privately to a cheap bodyshop to fix them. (You don't need flawless work when you are fixing it for returns)
Agreed. Buts it’s one case where 6 of one doesn’t necessarily equal half dozen of the other....

For one, rolling it into the next deal is convenient. No estimates, no need to deal with shops for drop off and pick up, etc. also convenient from the cash flow perspective where you avoid having to pay out of pocket for repairs when you can “fund” it instead with a slightly higher purchase price on the next vehicle.

Finally, from a psychological perspective, who wants to lay out $1,000 or $1,500 on a vehicle you’re about to give back. Hard to wrap the head around spending money so the next guy gets a better vehicle since you won’t directly enjoy the fruits of the repairs yourself. It’s just easier for some people to come to terms with it by rolling it into the next deal.

While some know that they’re not getting as good a deal on the new one as the could have there are probably some who think the dealer ate the damage and still gave them a good deal on the new one. Even if these people got the issues fixed privately though, they probably wouldn’t have been able to bargain down much more anyways as they’re just too naive.

So while there’s no magic here where the damage money becomes non-existent, it is a legitimate way for a win-win situation where the parties make compromises to mutually benefit from the transaction.

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