Deal Alert: You can get a great deal on a Mercedes EQS lease

May 12, 2023 Update: It looks like the pricing discussed in this article is no longer as widely available. I do think similar pricing will return as we continue to see increased competition in the EV space and Tesla price drops

I have been looking at car forums and I am starting to see a big uptick in attractive deals that people are getting on the Mercedes EQS sedan and SUV. I wanted to share some of the prices you should target when negotiating and why you are seeing this great price

What deal can I get on an EQS lease?

Over the past month I have been seeing people sharing price ranges of $600 - $700 per month on the electric Mercedes EQS with 0 or very little due at signing. This is a phenomenal deal given that these cars MSRP at over $100K. When looking at traditional “good value” on a lease, I recommend looking at paying about 1% of MSRP per month with 0 money down and taxes rolled into the lease price. These deals mean the car is well below the 1% benchmark and is significantly underpriced in the market. A comparable Tesla Model S is over $1000 a month to lease assuming similar terms. These deals apply to the base model 450 sedan and SUV right now. You can most likely negotiate a good deal on the higher end models, but they do not seem to be as attractive.

Why is an EQS lease so attractive right now?

There are 4 main factors that are driving the lease price of the car down so significantly right now. 1: Mercedes is discounting the car at the dealership. A lot of the recent offers shown have 10-20% dealer discount of the car. My guess is, Mercedes wants to make an aggressive push into the market and is giving dealers room to negotiate on the price. 2: the federal tax credit is applied to the lease payment. This means that you are getting $7,500 off your 3 year lease vs the full value of the car. This translates into a $200 per month price decrease that you see on the lease. 3: There are a couple of other incentives that give an additional $3,000 off the price of the car and in some states, such as New Jersey, EVs are tax free, so you are saving another 6-8% off the cost of the car. Finally, the residual value of the car is listed as 67%, which is a lot higher than what you see on most leases. Typically you are hovering in the 55-49% on residuals for standard cars.

Is it better to lease the EQS or buy it?

A lot of the points I highlighted before would still apply if you bought the car. You will likely get a similar dealer discount and you will still get the federal tax rebate, just in a lump sum vs it being applied directly to your payments. Right now the interest rate on the lease is right at 4%, which is the same rate you would get if you bought the car, so there is no difference there. I would prefer to stick with the lower monthly payment, especially if you have good credit and steady income.

Do I think this deal will last?

I imagine that dealers are more likely to deal between now and the end of March as the quarter is ending and there is always sales pressure to end Q1 on a high note. I can also see the high residual slowly declining as the year goes on and these cars hit the road. I would not recommend holding off for more than 2 months at this point if you want to capitalize on this offer. I would also recommend exploring other EVs as such an attractive deal might spark competition from Audi or other luxury EV makers.