Dealer Financing / Leasing - C230 Kompressor Sedan

Scenario 1: MSRP $34,050 (Sunroof Package, Automatic, CD Changer, Metallic Paint) - $2000.00 discount = $32,050.
To finance this vehicle, the dealer offered 5.25 % interest for 60
months. If I chose to lease this vehicle, the monthly lease amount was $510.00 @ .320 money factor for 39 months, with nothing down as a down payment.
Scenario 2: MSRP $33,496 (Same package as before), but no discount except for $54.00. WOW!
To finance this vehicle, the dealer offered 5.25 % interest for 60 months. If I chose to lease this vehicle, the monthly lease amount was $464.62 (drive out price) @ .16 money factor for 39 months, with $2500.00 as a down payment.
Here's what I don't understand and I need some clarification ...
1. Mercedes Benz, according to Edmunds.com is offering 1.65 % interest for 60 months for qualified buyers (we are qualified). Why weren't we offered this rate? I even asked the salesperson if the 5.25 % interest rate was the best they could do as my credit union was offering 3.4 % interest for 60 months and he told me to take the offer from my credit union. Why weren't they forthcoming about the 1.65 % interest rate? It started in the month of April and today is April 10th. If the salesperson was not informed of this offer, certainly the finance person should have been, which our salesperson visited several times while we were in his office.
2. I negiotiated the price of the vehicle first, before I even mentioned financing or leasing. In scenario 1, the price of the vehicle was $2000.00 below MSRP. I then mentioned leasing and he said the dealership would NOT give me the .16 money factor if I leased the vehicle. He said I could ONLY get the .16 money factor for leasing if I paid almost full MSRP, reducing the vehicle price by only $54.00. Essentially, the deal I had worked out (the $2000.00 off MSRP was being wiped away because I wanted to lease). I told the sales person whether I lease or buy doesn't make a bit of difference. I am negiotiang the price of the vehicle first and whatever I do from there, albeit finance or lease, would then be reduced by whatever I have negiotiated off the MSRP. I shouldn't lose the $2000.00 discount because I decided to lease.
The point I am trying to make is this: the money factor should be the same regardless of what I am trying to do. I negotiated the price of the vehicle first, and whatever I do afterwards is secondary. Am I completely wrong here? I've never leased before, but I have read up as much as I possibly can and I haven't ran across the scenario.
If someone has some experience in dealing with these types of situations, please advise me on what to do next.
Lastly, before I left, we did get an estimate on my wife's car that we MIGHT trade in. They rated in the car in excellent condition (which it is) and offered $13,150 (Kelly Blue Book). We managed to get them to go to $13,500, but not any higher. Selling it private party can get around $15,700, but we've had it listed for a while and it hasn't sold. I know they will turn around and sell it for $2000.00 more than what they gave us, but in this case, do you think it is worth it for us to continue to try to sell it privately or trade it in and get the tax break, providing we can work out the other scenarios mentioned above?
I appreciate many responses. My wife is on my back!
Thanks.
P.S.
Forgot to mention this ...
the dealer wants to also charge $225.00 for client services (loaner car for maintenance is mostly what I was told this is for) + $50.00 for documentary/notary fee.
I was not too pleased with the client fee, since it is a self-imposed fee from the dealer (more profit). I didn't negotiate this today, because I was very displeased with the money factor variations because I was receiving a $2000.00 discount off MSRP.
Any suggestions?
DF
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Go to another dealer. There are many-
What I would do is contact as many as you can via email- listing either the deal on the table or what you want to pay.
I am certain that you will get several replies. At that point, you can either take the competing offers to the original dealer or go ahead and buy from one of the responding dealers.
Either way, you will have proven that in this day and age, no dealer exists in a vacumn.
Best,
Ross

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Good advice. The reason why we selected this dealer is because of my wife's uncle who does business with them on a weekly business (he sells/buys cars at auction).
Guess it's time to look elsewhere. I believe they were thinking they could catch us off guard because of their relationship with the uncle.
DF
On Sun, 11 Apr 2004 22:09:02 -0400, "John Doe"

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Dealers make money off financing. In fact, your deal is probably financed @ 1.65 % interest and, without full disclosure -- it's no required under the law -- the additional interest charge is added on by the dealer.
Go to another dealer.
Also, it's always better to walk into the door with your on financing.
Try peoplefirst.com. It has some of the best rates anywhere.
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I guess what gets me is why didn't they offer me the 1.65 % interest rate (now .9 & APR being reported by Edmunds.com) if they were not losing any money on the deal, since it was being offered through MB. I understand whatever they add to that is pure profit for them, but they knew I had a good understanding of what I could get for an approved APR through my credit union.
I'm in the process of looking for another dealer in my area. We've also decided to consider the Acura TL simply because you get more bang (features) for your buck in this price class. We had looked at the BMW 325, Volvo S40 2004.5 and Infiniti G35.
Thanks for your help.
DF
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The whole issue is they have an expectation of "X" dollars of profit from the sale. They will either get it by not discounting the vehicle or by "marking up" the interest rate (or money factor). If a really uneducated buyer walked in, they would sell the vehicle at a marked-up interest rate *and* full MSRP. You are probably better off getting financing through the dealer (whether it's MBCC or a third party) because even without marking up the rate, they will still make a few $$ on the back end for "selling" the financing.

Even if you have to go somewhat out of your area, do it. Also, do your dealing by phone, and make it clear that you are calling other dealers to get the best price. While you are sitting in a chair at a dealership, you can;t be comparison shopping. Also, remember that in a negotiation, he who speaks first loses. If they ask you "what you are willing to pay" or "what dealer X quoted", don't tell them. Make them give you the offer and then the control is in your hands to accept or decline.

The Acura is a nice vehicle, but I found it a bit lacking in headroom. I was in your shoes a few years ago when shopping for my wife's car. We looked at the C320, (which was my first choice), the Volvo S60 and S80, the BMW 3-series, the TL, G35, Passat, and finally ended up buying an Audi A6 on recommendation from my MB salesman (that also sells Audi). They had some incredible lease deals going (like 0% MF)coupled with decent discounts. Based on the size, power and safety features over the others, it was a no-brainer. So far, we've been happy.
--

- RODNEY



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Go to a different dealer.

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Agreed.
Thanks.
DF
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