Latest Deals, Leasing 101

Work For A Large Company? Lease a $58K E-Class For $425/Month, $0 Down (Mercedes Fleet Employee Program)

December 17, 2015 Update: We've been alerted that the FEP incentive cannot be combined with the Winter Event certificate. The article has been updated accordingly. As you'll see, the marginal benefit of the $3,500 FEP incentive is only $500, because there's currently a $3,000 Winter Event certificate on E-Class.

Source: (2016 Mercedes-Benz E-Class Sedan)

Source: (2016 Mercedes-Benz E-Class Sedan)

Are you a doctor? A USAA or United MileagePlus Premier member? Do you work for a large company, such as Apple, Costco, or Starbucks? If so, you might qualify for an incentive under Mercedes-Benz's Fleet Employee Program (FEP).

How big is the incentive?

It ranges from $0 on a GLC-Class to $7,000 on the purchase of a B-Class Electric Drive. The incentive comes directly from Mercedes-Benz, so it does not eat into the dealer's profits. 

FEP Incentive Amount (Through January 4, 2016)
Model 2016 2015
C-Class Sedan $2,000 $2,750
E-Class $3,500 N/A
S-Class Sedan $4,000 $5,500
CLA-Class $1,000 $1,000
C-Class Coupe N/A $2,500
CLS-Class $3,500 $3,000
S-Class Coupe $1,000 $1,000
GLA-Class $1,000 $1,000
GLK-Class N/A $2,500
GLC-Class N/A N/A
M-Class N/A $2,500
GLE-Class $2,000 N/A
GLE-Class Coupe $1,000 N/A
GL-Class $2,000 $2,000
G-Class $3,000 $3,000
SLK-Class $2,000 $2,500
SL-Class $3,000 $3,500
Mercedes-Maybach $1,000 N/A
B-Class Electric Drive $3,000 $3,500 ($7,000 if not leased)

Who is eligible for the FEP incentive?

Eligibility is surprisingly broad; we know plenty of folks who qualify but didn't know when they leased their Mercedes. American Medical Association, USAA, and United MileagePlus Premier members qualify for the FEP incentive, as do employees of the following companies:

# L
3M Lam Research
A Lease Plan
A A A Liberty Mutual
A.P. Moller - Maersk Group Loews Corporation (not the store or movie theater)
ADP Lorillard Tobacco Company
Advanced Micro Devices M
Alcon Labs Marquardt Switches
Allianz Life Insurance Company Mass Mutual Life Insurance
Allstate Insurance Company Mattel Toys
Alstom Power Medical Society of NJ
Altria Group Merck & Co.
American Airlines Met Life Auto & Home Insurance Company
American Bar Association MGM Resorts International
American Credit Union Michelin North America
American Dental Association Microsoft Corporation
Amgen Mission Foods
Apple Morgan Stanley
ARAMARK Corporation Motorola
ARI Munich Reinsurance America
Astra Zeneca N
B Newell Rubbermaid
Bacardi USA Nike, Inc.
Bank of America Norfolk Southern
Benjamin Moore Northrup Grumman
Bobit Northwestern Mutual
Boehringer Ingelheim Novartis Pharmaceuticals
Braintree Labs Novo Nordisk, Inc.
Bristol-Myers Squibb O
Brown-Forman Omnicom Group
Burlington Northern Santa Fe RR Oracle Corporation
Cablevision Par Pharma (Strativa)
Callaway Golf Company Paramount Pictures
CBS Broadcasting Parker-Hannifan
Chubb & Sons Group Pearson Publishing
Cisco Systems Pep Boys
Citigroup Pepsico (does not include Pepsi Bottlers)
Citizens Financial Group Pfizer
Cleveland Clinic Foundation PHH Arval
Coca-Cola Company Philips Electronics North America
Colgate-Palmolive Polo Ralph Lauren
Compass Group USA Division Praxair
Computer Sciences PricewaterhouseCoopers International Limited
Continental General Tire Purdue Pharma
Corning Q
Costco Qiagen
Covidien Qualcomm
Cox Enterprises R
Crawford & Co R. J. Reynolds Tobacco Company
CRH North America Raytheon
Crossmark Resources Global Professionals
CSX Corporation Ricoh Corp
Cumberland Farms, Inc. Rollins, Inc.
Curtiss-Wright Corp. RPM
CVS Caremark S
D S A P America
Del Monte Foods S A S Institute
Dell Saint Gobain
Deloitte & Touche Saks Fifth Avenue Enterprises
Delphi Corporation Samson Investment
Delta Airlines Sanofi-aventis
Deutsche Bank AG Schering-Plough
Discount Tire Company Scripps Health
Dow Chemical USA Sempra Energy
E Sherwin-Williams
EADS North America Shire Pharmaceuticals
Eaton Corp Siemens Corporation
Eisai, Inc. SKF USA
EMC Solvay Management Services
EMD Serono Southern Wine & Spirits
Emerson Southwest Airlines
Emkay Southwest Airlines Credit Union
Endo Pharmaceuticals Staples
Estee Lauder Starbucks Corporation
ExxonMobil State Farm Mutual Automobile Insurance
F State Street Corporation
Factory Mutual Insurance Group Stiefel Laboratories
Farmer’s Insurance Group STIHL, Inc.
Faurecia Holdings Swisher International
Federal Express Symrise
Festo Corporation Syngenta
Fidelity National Financial T
Fidelity Investments T-Mobile USA
FOX News Channel Takeda Pharmaceuticals
FPL Group The Bank of New York Mellon Pershing
G The Great A&P Tea Company
Geico The Hearst Corporations
Genentech The Irvine Company
General Electric The Shaw Group
General Mills The Sports Club
GlaxoSmithKline Ticketmaster
Graceway Pharmaceuticals Tishman Realty & Construction
GTech TJX Companies
H Tupperware Corp.
H.J. Heinz Turner Construction / Logistics
Halliburton Company Twentieth Century Fox
Hartford Financial Services U
HD Supply Unilever HPC USA
Hendrick Motorsports United Technologies Corporation
Henkel Corporation United Water
Hershey Food Corp. University Hospitals
Hertz Corporation University of Alabama System
Hewlett-Packard Company UPS
Home Depot V
Honeywell Valleycrest Companies
Hubbell Verizon
Hughes Telematics W
I Walt Disney Corporation
IBM Waste Management
Ingersoll Rand Weatherford International
Intel Corporation Wegmans Food Markets
International Flavors & Fragrances Weichert Realtors
International Paper Wells Fargo / Wachovia
International Plant Services Westinghouse
Inteva Products Weyerhaeuser Company
inVentiv Health, Inc. Wheels
J W.L. Gore & Associates
J.D. Power and Associates Wm. Wrigley Jr.
Jackson National Life Wynn Las Vegas
Johnson & Johnson X
Joy Global Xerox
JPMorgan Chase Y
K Yahoo
King & Spalding Z
Kraft Foods Zurich Insurance Co.

Prior to using the FEP incentive, you will need to obtain a Control Number and/or the corresponding program form. Incentives are non-transferrable.

How does it translate into deals?

Source: (2016 E250 BlueTEC sedan)

Source: (2016 E250 BlueTEC sedan)

Take the E250 BlueTEC, for example, which has one of the highest residual values of any Mercedes-Benz. Assuming a sticker price of $58,205, we believe an excellent but realistic selling price is $49,000 (including the $3,000 Winter Event certificate). 

If you qualify for FEP, you can swap the Winter Event certificate for the $3,500 FEP incentive (unfortunately, the two cannot be combined), further lowering the selling price to $48,500. Factor in the $795 acquisition fee, and the net capitalized cost becomes $49,295.

At 10,000 miles per year, the 24-month residual on E250 BlueTEC is 68% of MSRP, or $39,579. This results in a depreciation expense of $9,716, or $405 per month.

The money factor rate on the E250 BlueTEC is .00102 (2.5% APR); however multiple security deposits (MSDs) (10 of them) and auto-pay will lower the rate to .00022 (0.5% APR). At that rate, the monthly finance charge is $20 per month.

Add the monthly depreciation expense and the monthly finance charge, and you get the monthly lease payment: $425 per month.

Here's what you should expect when all is said and done. We've added in sales tax (assumed 8%), license/registration, and fees.

2016 E250 BlueTEC Sample Lease - Total Drive-Off
First month's payment (after 8% tax) $459
DMV license/registration $525
Dealer document fee ($80 max. in CA) $80
Down payment $0
Refundable security deposit $5,000

Did you recently lease a Mercedes? Share your deal below.

Optional. Select to auto-populate the acquisition fee, disposition fee, and MSD fields.
% off MSRP
e.g., cash-back offers, loyalty cash, bonus cash. Most states treat customer cash rebates as a capitalized cost reduction, which is subject to sales tax.
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Not recommended
I want to pay my acquisition fee upfront.
Acquisition fee, a.k.a. "Bank Fee," is set by the leasing company. Some dealers mark up this fee to make additional profit for themselves. You can negotiate the fee back to its original that we are showing here.
( miles/yr)
Adjusting the miles changes the residual(%).
APR: %
Enroll in Mercedes-Benz Autopay to lower the MF by 0.00010
I want to pay my total lease payment upfront to lower the MF by 0.00073.
APR: %
Tax your state, county, and city levy.
Tax is levied on the monthly lease payment (most states).
Tax is levied on the sales price upfront (e.g. VA, TX, GA).
Tax is levied on the total lease payment upfront (e.g. NY, MN, OH).
First month's Payment incl. tax:
Down payment:
Registration and doc fee:
Total MSD Payment:
Tax on cap reduction and fees:
Acquisition Fee:
First Month's Payment:
Down payment:
Registration and doc fee:
Total MSD Payment:
Tax on the Sales Price:
Acquisition Fee:
First Month's Payment:
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Acquisition Fee:
The number of years it would take for the accumulated monthly payments to exceed the MSRP. The higher the number, the better it is to lease as opposed to buy.
Fee the leasing company charges at the end of the lease to cover the cost of selling your car. If you purchase the car or lease another car from the same manufacturer, you usually do not have to pay the disposition fee.
The total cost of leasing over the lease term, including applicable taxes but excluding registration/license fee and the refundable MSD payment.