Reply To: why does advance payment change so much when car prices don't change

#181737
James

    I’m sure it’s already been said, but like all leasing companies, ap and the overall lease cost  are mainly based on depreciation and the predicted future value of the car at the end of the lease.  This is why prior to the current supply issues, premium cars were often not much more than budget cars because the depreciation  over 3 years can be about the same.

    It’s well reported that MB has a ton of money in the bank, so in theory they could subside APs, but it’s not a viable long term business model even for a charity.

    Thag said, at the moment I can only assume MB is benefitting from the inflated resale value of 3 year old cars and  adding to those reserves.

    Unfortunately  reduced depreciation is having little impact on the APs because Supply and demand is making it harder to negotiate deals for new cars as there is little to no excess supply capacity,  so manufacturers are less likely to agree deals with MB despite their buying power, once manufacturing capacity  exceeds  demand again, APs will fall.  Unfortunately that’s at least 12 months off.