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Old 12th October 2011, 14:28   #16
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Default Re: Mercedes-Benz introduces Star Lease in India

This should help merc sales. Definately a good move. though it all depends upto the exact lease agreement and how one adjust this against tax - if at all. This can end up being a much better option than buying a car or taking the standard lease that the company offers by default. Most E-Class + Merc buyers in India may be running their own business and this will be pefect for them.
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Old 12th October 2011, 14:45   #17
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Default Re: Mercedes-Benz introduces Star Lease in India

what about the rate at which these cars will be leased out?? any idea about that?
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Old 12th October 2011, 14:49   #18
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Exclamation Re: Mercedes-Benz introduces Star Lease in India

This is a good move by Merc in India, though financially leases are terrible, terrible things. Some cons of leasing:

a) Far more expensive as compared to either cash payments or financing
b) Linked directly to a contract which is inevitably expensive to break (assuming lease transfers are not active options)
c) Money spent on an asset which you will never own (since purchase price at the end of the lease period is usually outrageous)
d) Usually the built-in insurance will come up short (this is speculation based on other markets, specifically Sri Lanka), and is usually expensive
e) Penalty at the end of the lease period for what is deemed to be beyond "normal wear and tear" - I could never understand this component, since most lease contracts incorporate a maintenance component
f) I've seen leases which stipulate a mileage limit per year!!! This is ridiculous (according to me). If you exceed the stipulated mileage, there is additional cost per km extra.

If lease transfer options are available, and you want to shell out money for an asset which belongs to somebody else, and the period of ownership is 2-3 years only, then it might make sense (in a weird, convoluted way). Else, my recommendation is

Do not buy a Merc on a lease!!!

Last edited by Anarchy83 : 12th October 2011 at 14:51. Reason: Point e) was mistakenly marked "Normal Wear n Tear"
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Old 12th October 2011, 15:40   #19
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by NetfreakBombay View Post
Do you happen to know approx OTR price for C200 CE petrol?
Is that rhetorical?

I am not sure but it should be less than the 30+ Lakhs you pay for only the lease.
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Old 12th October 2011, 16:56   #20
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by vcash View Post
Is that rhetorical?
No. Did not have any idea about price. Got a quote of 35 lakh (OTR) for C-Class 2011 C 200 CGI. Hope this is the same car. it was online quote from Carwale.

With lease, total cost is 46 lakh. 32 lakh as lease and 14 lakh at end of it.

If one buys it outright, cost is 39 lakh over three years. That includes insurance for 2 years and maintenance package for 3 years.

So, overall 7 lakh extra.
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Old 13th October 2011, 15:29   #21
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Default Re: Mercedes-Benz introduces Star Lease in India

I am sure the lease agreement will preclude any maintenance arising from track use, which might be the only profitable way to use the lease option over buying the car. So the smart Indian car buyer is sure to reject this idea. Some corporates might be interested in this though.
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Old 13th October 2011, 17:25   #22
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Default Re: Mercedes-Benz introduces Star Lease in India

Pricing of the lease is pure dumb. They are asking the customer to pay pretty much the entire price of the car in three years.

Looks like they are turning the concept of a lease over the head.

You only should be paying 50% or less for the total of 3 years in a lease and not more than that.

Another fail by Mercedes.

Cheers
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Old 14th October 2011, 02:52   #23
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by vcash View Post
Lease details in Mumbai for C200 CE petrol with 10K annual run. Information courtesy Autohanger.

Zero Down
90,806 per month inclusive of insurance, tax, etc.
36 month duration
Residual value at the end of 3 years for outright buy - 14 Lakhs.

Yea, I'll pass. Thanks.
That is 32.69 + 14 = 46.69 lacs landed cost after 3 years if you plan to buy it. else you just spend 32.69 lacs for 3 years, which is anyway higher than the cost of the car. Assuming that Autohangar has given out accurate information, this is not really a great deal. It works out cheaper if you take the car on a 5year finance. Ofcourse this is all assuming that the downpayment you save by taking on a lease is not working on earning an interest through some other investment which is giving you a high enough yield to offset the high emi in the lease option.
I think I have gotten too technical.
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Old 14th October 2011, 11:19   #24
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Default Re: Mercedes-Benz introduces Star Lease in India

Corporates and business houses will be more interested in this. The entire lease amount spent can be taken as expenses as against when a car is bought it depreciates slowly over a period of time. This is one of the reasons why companies lease cars from taxi segment or give their top management extra allowance under pay package and buy a car on their own.

Merc has been lagging behind BMW in sales and they just wont take things sitting down and this seems to be one of the way of saying look we are working on it.

OT.
As a personal buyer, the quantity in which the premium cars are selling the used car market will gain a lot of importance similar to developed countries.
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Old 14th October 2011, 12:42   #25
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by NetfreakBombay View Post
No. Did not have any idea about price. Got a quote of 35 lakh (OTR) for C-Class 2011 C 200 CGI. Hope this is the same car. it was online quote from Carwale.

With lease, total cost is 46 lakh. 32 lakh as lease and 14 lakh at end of it.

If one buys it outright, cost is 39 lakh over three years. That includes insurance for 2 years and maintenance package for 3 years.

So, overall 7 lakh extra.
The math isn't that simple. outright purchase is 39 Lakh as you correctly put.

However, figure the interest you would be earning on a lump sump amount kept in bank and paying monthly lease of around rs 1lac/ month. It should end up cheaper not expensive ( hunch) or at least very close

Last edited by Warhound : 14th October 2011 at 12:45.
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Old 14th October 2011, 16:23   #26
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by vcash View Post
Lease details in Mumbai for C200 CE petrol with 10K annual run. Information courtesy Autohanger.

Zero Down
90,806 per month inclusive of insurance, tax, etc.
36 month duration
Residual value at the end of 3 years for outright buy - 14 Lakhs.

Yea, I'll pass. Thanks.
Not only you, I think everyone will pass this silly offer!
I paid an EMI of Rs.80,000/- per month for 3 yrs on E280 CDI on a zero interest scheme offered by the company. At the end of the 3 years, the car is mine. Whats more even after factoring in insurance and service costs its still way below what the above offer costs - that too for a C class corporate edition!
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Old 15th October 2011, 01:14   #27
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by manishk123 View Post
Not only you, I think everyone will pass this silly offer!
I paid an EMI of Rs.80,000/- per month for 3 yrs on E280 CDI on a zero interest scheme offered by the company. At the end of the 3 years, the car is mine. Whats more even after factoring in insurance and service costs its still way below what the above offer costs - that too for a C class corporate edition!
But then you are not factoring in the large downpayment you must have paid. according to your statement, you must have paid 28.8lacs for 3 years. So i presume the rest of it must have been the downpayment
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Old 28th October 2011, 13:29   #28
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Default Re: Mercedes-Benz introduces Star Lease in India

I don't understand how a company like MB can offer something so vague. I mean corporate world around leaves deals in crores over a lacs rupees and goes with the better offer simply because its all about fantastic 'value for money' these days to the informed customers (they all know features, prices and competition before going to the showroom). They should have offered something more appealing.
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Old 18th December 2011, 20:40   #29
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Default Re: Mercedes-Benz introduces Star Lease in India

There is one more aspect to car lease - tax savings. The car lease expense is tax-deductivle, so 30% of your EMI amount is tax exempt. Also, for a leased car, other car related expenses (insurance / maintenance / fuel) can be exempt from tax, if the car is leased to a company.

In effect, if you are an entrepreneur, if u pay lease of 80000 per month, you save 24000 in taxes straight away. in 3 years the savings is 8.6 lacs. If you factor this, then going for a lease is much better option than going for outright purchase.

The leasing agreement must be scrutinized well, though, as each leasing company has slightly different fine print.
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Old 19th December 2011, 13:27   #30
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Default Re: Mercedes-Benz introduces Star Lease in India

Quote:
Originally Posted by NetfreakBombay View Post
No. Did not have any idea about price. Got a quote of 35 lakh (OTR) for C-Class 2011 C 200 CGI. Hope this is the same car. it was online quote from Carwale.

With lease, total cost is 46 lakh. 32 lakh as lease and 14 lakh at end of it.

If one buys it outright, cost is 39 lakh over three years. That includes insurance for 2 years and maintenance package for 3 years.

So, overall 7 lakh extra.
I think you have made one of the biggest blunders in the world of finance by simply multiplying the Lease rents of 90000 with 36 months and then adding 14L to it . Actually there is something called interest cost which should be considered and that brings down the overall cost heavily also considering that lease rents are tax saving. So if calculate the present value with an appropriate factor the LR do seem profitable and then 14L can also be pulled back to Present value. The deal looks good to me.
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