The Ins and Outs of Leasing a Car from Mercedes-Benz of Rochester

What's the Leasing Lingo?

• Lessor: In most cases, the financial services arm of the auto manufacturer.
• Lessee: You, the customer who is signing their name at the bottom of the lease contract, and who will be responsible for the vehicle for the time the contract is active. 
• Open-ended vs Closed-ended Leases
• Open-ended: An open-ended lease is where the vehicle's future value is not listed in the contract. At the end of the lease period, you may receive a refund check if the vehicle is worth more than expected. If it is worth less than anticipated, you may owe the lender, such as Mercedes-Benz Financial Services, additional money before you are free and clear. Such reasons for a decrease in value are the vehicle's condition after an accident and subsequent repair or some other unforeseen change in the car or SUV condition.
• Close-ended: A closed-ended lease shows that you have already agreed upon the vehicle's value at lease-end. If the depreciation makes the vehicle worth less than the agreed-upon amount when you turn it back in, you walk away from it with no further financial obligation.
• Capitalized Cost: The Capitalized Cost is the value of the vehicle at the start of the lease. It's essentially what the vehicle was worth when new and includes any options, services, and extras that were part of the agreement at lease inception.
• Capitalized Cost Reduction: Think of this as the down payment. It's possible to reduce the amount of your monthly payment by applying a capitalized cost reduction. This amount reduces the total amount of the capitalized cost. As an example: Say the capitalized cost of the lease vehicle is $35,000. If you apply a capitalized cost reduction amount of $7,000, that will leave you with a capitalized cost of $28,000, from which your monthly payments will be determined.
• Residual Value: Another way of saying, "the value of the car at the end of the lease." It is an agreed-upon amount that is usually decided between you and the lessor at the beginning of the lease and it will be in the contract.
• Depreciation: The rate your vehicle loses value over time.
• Use tax: The Use tax usually takes the place of a sales tax since you are not actually buying anything. Rather, you are using it. State legislators made a law governing use tax, just for people who decide to use rather than buy. Get it?
• Early Termination Fee: Your lease is an agreement that you will pay a fixed amount for a certain amount of time. If you find the need to end the lease early, you may be required to pay an early termination fee. Your lease agreement will detail the amount, in advance, so there are no surprises.

1. Does leasing a car make sense for me? If you prefer to pay less a month for the same vehicle, worry less about maintenance costs or how to sell it when you want to get a new car, then it's worth looking into lease offers.
   
   
2. Leasing a Mercedes-Benz or buying - what's better? Both have their pros and cons and for that reason the short answer is "it depends." It all comes down to personal preferences. Do you intend to drive the same car for a long time? Do you drive a lot of miles annually? Do you like the car selling process? If you answered no to the above questions you should consider leasing a car, not buying one. For more details, check out our Buying vs Leasing article.
   
   
3. What's the cost to lease a Mercedes-Benz? It all depends on the model you have chosen and your payment and credit histories. Just like financing a car, the more you pay upfront, the less you pay monthly. The good news is that often times manufacturers that want to increase their number of leased vehicles offer special incentives and rebates that lower the monthly payments.
   
   
4. Can I buy the car I lease? Yes, if you like the Mercedes-Benz you've been leasing, you can purchase it (most leasing contracts have buyout clauses). If you don't want to wait until the end of the lease period, you can speak with a leasing manager to purchase the vehicle before that. It's certainly possible just keep in mind that you'll have to pay early termination fees.
   
   
5. Is the security deposit refundable? Security deposits are refundable at the end of the lease given that all lease contract specifications have been met. At the same time, some lease agreements require non-refundable deposits, so read your Mercedes-Benz contract carefully and ask questions. And last but not least, there's a difference between paying a security deposit or a down payment. The latter is not refundable. 
   
   
6. Does my credit score need to be perfect to lease a Mercedes-Benz? Contact our Mercedes-Benz of Rochester Finance team for specfic financing questions. You can get pre-approved online by filling out a finance application.
   
   
7. Can I lease a Mercedes-Benz with $0 down? This depends on the current offers going on as well as a number of other factors. Conact our Mercedes-Benz of Rochester Finance team directly with any specific questions and we'll be more than happy to answer all of your questions.
   
   
8. Can I return my leased Mercedes-Benz to a different dealership at the end of the lease? Yes, you can return your leased vehicle to a different authorized dealership of the same brand. It goes without saying but in order to return the car, your lease contract obligations must have been fulfilled.
   
   
9. Is maintenance included with my Mercedes-Benz lease? One of the main reasons people prefer leasing to buying is that maintenance is typically covered during the lease period (specifics vary within individual lease contracts).