Mercedes Lease - Settlement

[Cmonyoureds]

Really? I’ve PCP’d cars and them sold them prior to the end of the initial term, or p/x’d them to a dealer. You get a settlement figure and you clear it. Never been any concept of a penalty nor an overly high settlement figure

Wind back to the 90s when leasing, especially personal leading wasnt a thing, car finance tended to come with a lower settlement figure if you took out another loan for the next car. Remember selling my 500SL to a Mercedes dealer who withheld about £1200 of the agreed price until I bought my next car as the settlemeng figure was dependent on my continued business

It was in response to the OP who said he had settled his PCP in the first year ( turned out it wasn’t a PCP ) The first year of a PCP unless you pay a big deposit you are effectively in negative equity, the monthly payments based on a 3 or 4 year deal will not cover the depreciation in year one, so the shortfall will have to be paid back.

 

[Bobby Dazzler]

It was in response to the OP who said he had settled his PCP in the first year ( turned out it wasn’t a PCP )

Other way round: the OP first said it was leased and then confirmed that it was a PCP.

 

[Cmonyoureds]

Other way round: the OP first said it was leased and then confirmed that it was a PCP.

In post #8 he said it wasn’t a PCP but Mercedes Agility, which now that I’ve looked at it.....is a PCP
This is more confusing than an episode of Line of Duty!

 

[Spider10]

Hopefully a better ending

 

[Cmonyoureds]

Hopefully a better ending

 

[nyssa7]

With Mercedes Agility, and IIRC with the Land Rover PCP scheme, once you get past half way you can simply hand the car back and walk away, assuming it’s in the expected condition of course

 

[Jibbajabba]

With Mercedes Agility, and IIRC with the Land Rover PCP scheme, once you get past half way you can simply hand the car back and walk away, assuming it’s in the expected condition of course

Pretty much. But you can always pay up at any time

 

[Jibbajabba]

What did the £5k relate to then?

They say based on interest. Not sure. Guess that’s the interest over the two remaining years I won’t be paying.

How we worked it out
Here is how we worked out your quote:
Balance outstanding: £xx as of 28 Apr 2021 which is the quote start date.
This figure includes your purchase fee which can be found in your agreement.
Minus a rebate of: £4,615.75, which is based on the remaining interest payable on your agreement¹

 

[Cmonyoureds]

They say based on interest. Not sure. Guess that’s the interest over the two remaining years I won’t be paying.

That’s quite different from what you had said then. You said you got a discount of 5k on top of the interest you would be saving over the remaining term.

 

[Jibbajabba]

That’s quite different from what you had said then. You said you got a discount of 5k on top of the interest you would be saving over the remaining term.

Well it is quite confusing. None of their numbers make sense. The discount is not the complete interest I’d be saving. I paid off a year after Agile started and the interest remaining is technically higher than those £4.6k so who knows.

At the end it makes financially no sense to lease (PCP or whatever you call it) if you intend to keep it.

I run the numbers. Just by using a standard high street loan an Agile contract with Mercedes (taking final balloon payment into consideration) costs £12k more over 30 months.

Anyway, back to my actual topic lol - come one Daimler, where’s that darn confirmation.

Also annoying is that once you ask to settle they only give you account number and sort code but not what the account is under. Which means online confirmation / match won’t work.

Thankfully I eventually tried ‘Daimler AG’ as account holder - which brought up a match.

 

[Cmonyoureds]

Well it is quite confusing. None of their numbers make sense. The discount is not the complete interest I’d be saving. I paid off a year after Agile started and the interest remaining is technically higher than those £4.6k so who knows.

At the end it makes financially no sense to lease (PCP or whatever you call it) if you intend to keep it.

I run the numbers. Just by using a standard high street loan an Agile contract with Mercedes (taking final balloon payment into consideration) costs £12k more over 30 months.

Anyway, back to my actual topic lol - come one Daimler, where’s that darn confirmation.

Also annoying is that once you ask to settle they only give you account number and sort code but not what the account is under. Which means online confirmation / match won’t work.

Thankfully I eventually tried ‘Daimler AG’ as account holder - which brought up a match.

Well the main thing is you’ve saved yourself a big chunk of money. Hopefully you’ve given others a heads up that car finance can be expensive, even more so on used cars where interest rates can be around 10% which is scandalous, given that personal loans can be had for around 3% depending on affordability criteria.

 

[Srdl]

Decided to keep my leased E63S I got from new in 2020 now I wonder - how long until they 'recognize' the fact I settled via CHAPS ?

Money should have been there immediately ... But how long does it take for them to send the 'thanks, got it' mail ?!?

After two days I noticed still no word and portal still only got the settlement quote available #impatient

I cleared my Agility last October. I didn't make sense to be paying them 6% and getting less than 1% on my savings. I hadn't heard anything after a week so I emailed them on [email protected] and had a confirmation back in a couple of days.

 

[Jibbajabba]

What annoys me most is that I have been using different models of leasing, like PCP and others, for years and for some reason I fell for this thing when getting my e63s.

From the beginning I wanted to keep the car so I intended to put 27k down (20k cash and 7k part exchange) and just pay it off. When I mentioned finance the guy immediately fixed up the paperwork (Agile / PCP) at 36 months. Maybe I was happy with it at the time as the monthly payment was very low. I mean of course it was because at 27k deposit and 32k final balloon payment, the monthly was of course low.

I then bought a house and wanted the monthly gone so I asked them to turn the PCP into a loan which they refused (Had to have max 3 month left on PCP) so I thought I look into settling ... Again, was considering cash or loan so looked into that even further and was shocked really.

Because of my good credit rating I got loan offers for 1.9% APR. and I think the PCP was a bit higher than 6% - 6.7%

And yea - it was literally 12k - 15k savings between loan and PCP.

But anyway - it's mine now - now I just need Mercedes to understand that part - it always freaks me out to send so much money without much of an acknowledgment. When I bought my house I got the 'ok' from solicitor within hours - given it was CHAPS and immediately in their account. Hearing Mercedes may need weeks drives me mad.

@Srdl : Good to hear it went then fairly quickly. I literally sent a ticket the minute I got home from the bank.

At least now with owning it - it feels less 'dirty' to mod the car lol ... I thought having all chrome painted black was already pushing it haha.

 

[Bobby Dazzler]

They say based on interest. Not sure. Guess that’s the interest over the two remaining years I won’t be paying.

The total amount borrowed will include interest over the term of the agreement. Therefore to settle I suspect the calculation will be total amount borrowed, minus the amount repaid, plus early termination fees (if applicable), plus purchase/admin fees, minus future interest charges not yet incurred.

The £4.6k will be the future interest charges not yet incurred, If you believe that the interest over the remainder of the agreed term is significantly greater then I would seek clarification now, to make sure you’ve not settled too much.

 

[Jibbajabba]

Yea did exactly that ... asked for clarification .. likely too late but meh .. we shall see ...

 

[Bobby Dazzler]

Because of my good credit rating I got loan offers for 1.9% APR. and I think the PCP was a bit higher than 6% - 6.7%

And yea - it was literally 12k - 15k savings between loan and PCP.

I think you said that you’re up front payment was £27k, so for easy maths let’s assume that the car was £97k, so say £70k to finance.

With a personal loan at 1.9%, the total interest repayable would be £2k. With a PCP at 6.7% it would be £7k (ignoring any complications of a reducing balance).

The difference is only £5k rather than £12-15k. If your interest rate was 6.7% but interest charges would have been £12-15k then there must be a mistake somewhere.

Worth asking for a breakdown.

 

[Bobby Dazzler]

Yea did exactly that ... asked for clarification .. likely too late but meh .. we shall see ...

If it’s a mistake on their part then they ought to honor that, so don’t give up too soon.

 

[Jibbajabba]

If it’s a mistake on their part then they ought to honor that, so don’t give up too soon.

Ah not giving up at all. I just hate when big corps being &$%£

 

[Jibbajabba]

Interesting - that would also imply you need to get in contact :



Although still - their online portal surely should reflect that no matter what ...

 

[Cmonyoureds]

What annoys me most is that I have been using different models of leasing, like PCP and others, for years and for some reason I fell for this thing when getting my e63s.

From the beginning I wanted to keep the car so I intended to put 27k down (20k cash and 7k part exchange) and just pay it off. When I mentioned finance the guy immediately fixed up the paperwork (Agile / PCP) at 36 months. Maybe I was happy with it at the time as the monthly payment was very low. I mean of course it was because at 27k deposit and 32k final balloon payment, the monthly was of course low.

I then bought a house and wanted the monthly gone so I asked them to turn the PCP into a loan which they refused (Had to have max 3 month left on PCP) so I thought I look into settling ... Again, was considering cash or loan so looked into that even further and was shocked really.

Because of my good credit rating I got loan offers for 1.9% APR. and I think the PCP was a bit higher than 6% - 6.7%

And yea - it was literally 12k - 15k savings between loan and PCP.

But anyway - it's mine now - now I just need Mercedes to understand that part - it always freaks me out to send so much money without much of an acknowledgment. When I bought my house I got the 'ok' from solicitor within hours - given it was CHAPS and immediately in their account. Hearing Mercedes may need weeks drives me mad.

@Srdl : Good to hear it went then fairly quickly. I literally sent a ticket the minute I got home from the bank.

At least now with owning it - it feels less 'dirty' to mod the car lol ... I thought having all chrome painted black was already pushing it haha.

Something isn’t right here. When you are buying high end cars it’s important that you understand the financial side of things as interest rates and length of term can make a big difference in the total price you end up paying for such a car.
Firstly I take it that it isn’t a personal loan you’ve now got because 1.9% is very low. 1.9% Sounds more like a remortgage rate?
You said the agility agreement was over 36 months? In that case there’s no way you would be saving 12-15k in interest compared to a loan and your interest rebate of £4600 seems to back this up. Like Bobby Dazzler has said, over a 36 month term your total interest on agility with interest at 6% would be around 7k and that’s based on financing 70k.
Perhaps the high amount of interest that you mentioned ( around 15k ) was calculated before the large deposit that you made and was also based over a longer term?
Was your car brand new? This can alter the interest rate greatly, brand new can be anywhere between 2% and 6%, whereas pre registered/used approved can be north of 10%.
I would call the salesman who signed you up to the agility deal and get him to explain exactly what the deal was, then ask him to email you the details of the agreement for you to look over if you don’t already have this.