neodoc

As many of you know, I have ordered a CL 63, which should be in production in August...or so I'm told. I'm looking at a possible late September, early October delivery date, so I'm now thinking about $$$$. I already lease my GL 450 PE, which helps me out every year with good ol' Uncle Sam, but I never keep a car more than 3 or 4 years, so I was contemplating leasing the CL also. Since I can't deduct both leases come tax time, I'd deduct the higher of the two, or simply use a HELOC to buy the CL and trade it (not sell it) in about 3 years. Excluding all the particulars that make everyone's financial situation unique, how much sense does each of these approaches make? I would still be looking at about $2500 a month either way, so monthly payments aren't the deciding factor. Any thoughts?

Joe

cawimmer430

Heloc?

MBZFAN

Home Equity Line Of Credit - Similar to what is more commonly known as a "2nd Mortgage", but in many cases, the primary mortgage debt, collateralized by real estate value, usually tax deductible.

Joe -

The answer to your lease question can only be correctly addressed by your CPA who knows your specific tax situation. Typically, the larger lease payment is more advantageous, assuming a qualifying business usage. The problem for you now, would be leasing the CL and not being able to utilize the HELOC on the GL which I would guess is "obligated" under the exisitng lease.

More importantly, let me tell you that after 3 weeks of driving the new CL63, I can assure you that the car is utterly fantastic. You have made the right decision and you will not be disappointed. It is an incredible driving experience, unlike anything I have ever driven from Mercedes. Your biggest problem will be the wait until your September/October delivery !

Matt530i

Generally speaking, I would say that the residual MB will give you on the CL will be greater than the trade-in/selling value of the CL in three years. So if you buy the CL, you will pay for more of its depreciation.

The only factor counter-acting this will be the spread between your HELOC interest rate and the lease interest rate (money factor). If the HELOC rate is significantly lower, the difference in interest you'll save may be lower than the difference in depreciation.

neodoc

Thanks, guys, for your input. I've pretty much decided that I'll be leasing the CL63, and just use it as my tax deduction for business (I travel between hospitals). The GL is leased also, but MB Financial has no problem with me having two leases. With the damage the GL sustained after my dad's accident, it's value has depreciated significantly. Since I leased it, and have every intention of returning it at lease end, MB will take the hit, not I. In case you're wondering, the GL (which I got for my dad last year for Father's Day) was hit from behind by a Geo Tracker, which itself was hit from behind by a Ford F-150. Neither of my parents was hurt, but it cost $12,000 to fix and took 2 1/2 months. The whole driver's side rear panel had to be cut out and replaced. The repair is superb, and no one can tell this vehicle was ever damaged, but the fact remains it has depreciated because of it. This is what it looked like after the hit.

Attached Thumbnails

     

cawimmer430

Neodoc,

Best of luck.

Sorry to see those pictures of your beautiful GL involved in an accident. Yikes!