Okay, just got back from the dealer. I found out before I went that in Tennessee, they don't charge tax up front and add to the lease, so that should be helpful (you get taxed on each individual lease payment).
But they're saying they don't know how much I will save by doing this. A dealer over in North Carolina says Kia won't do this at all - it's impossible. The local dealer says they will, and they got off of the phone with KMF and they say I have to pay three whole payments before I can buy it out or they will take away the lease cash. I have no idea how to verify this.
The other part I'm working on is understanding some of the terms in the lease contract (which I got to see today, a real paper copy of the thing).
Here's part 22 Early Termination:
A. LESSEE’S RIGHT TO TERMINATE EARLY. You have the right to terminate this Lease early (before the end of the Lease Term), by returning the Vehicle to us or other person we designate, and paying the applicable Early Termination Liability set forth in Section 22C below.
B. LESSOR’S RIGHT TO TERMINATE EARLY. We may terminate this Lease early if you are in default (see Section 25C below). If we terminate this Lease early, you will owe us the applicable Early Termination Liability set forth in Section 22C below.
C. EARLY TERMINATION LIABILITY. If this Lease is terminated early pursuant to Sections 22A or 22B of this Lease, you agree to pay us the sum of items (1) through (4) as follows: (1) any unpaid Monthly Payments accrued up to the termination date, plus (2) official fees and taxes in connection with the termination, plus (3) all other amounts due and owing under this Lease, except excess wear and mileage, plus (4) an early termination charge calculated as follows:
(i) Lessee’s Early Termination:
(a) if you terminate this Lease more than 120 days before the end of the Lease Term,
the early termination charge you owe (provided the Vehicle is not a Total Loss)
will be equal to the lesser of the Standard Formula and the Remaining Payments
Formula defined below.
(x) Standard Formula: The sum of (1) the difference, if any, between the Adjusted
Lease Balance and the Vehicle's Realized Value, plus (2) an early termination
fee in an amount equal to the Turn-In Fee disclosed in Section 4A of this
Lease, and plus (3) the actual expenses we incur in connection with preparing
for sale and selling the vehicle, including our third party auction fees and costs
for transportation and reconditioning of the Vehicle prior to sale.
(y) Remaining Payments Formula: The sum of: (1) all scheduled monthly Lease
payments from the termination date through the end of the Lease Term, plus
(2) as permitted by applicable law, any excess mileage, plus (3) as permitted
by applicable law, any excess wear and use (See Section 24A, below), and
plus (4) the Tum-In Fee amount disclosed in Section 4A of this Lease.
(b) if you terminate this Lease 120 days or less before the end of the Lease Term,
the early termination charge you owe will be the amount equal to the Remaining
Payments Formula, provided the Vehicle is not a Total Loss.
(c) If you terminate this Lease early in connection with a Total Loss, the early
termination charge you owe will be the Standard Formula, minus the early
termination fee referenced in Section 22C(i)(x)(2) above (‘Total Loss EarlyTermination Charge”).
(ii) Lessor‘s Early Termination: the early termination charge if we terminate this Lease
early will be the amount equal to the Standard Formula: provided that, If we repossess
the Vehicle, in lieu of the early termination fee component of the Standard Formula,
you will be charged the actual expenses we incur in connection with repossessing,
obtaining and storing the Vehicle.
D. ADJUSTED LEASE BALANCE. Your Adjusted Lease Balance is the Adjusted Capitalized
Cost disclosed on the front of this Lease, less all depreciation and other amortized
amounts accrued up to the termination date. calculated according to the Constant Yield
Method. "Constant Yield Method" means the method of determining the rent charge portion
of each base monthly payment under which the rent charge for each month is earned in
advance by multiplying the constant rate implicit in the Lease times the balance subject
to rent charge as it declines during the scheduled Lease Term. At any time during the
scheduled Lease Term, the balance subject to rent charge is the difference between the
Adjusted Capitalized Cost and the sum of (1) all depreciation and other amortized amounts
accrued during the preceding months and (2) the first base monthly payment.
E. REALIZED VALUE. If you obtain an independent appraisal (see below), the Realized Value is the appraised amount. If the Vehicle is a total loss, the Realized Value is the amount of any insurance proceeds we receive under your insurance plus any amount received from any other party in payment of the loss; if there is no payment, the Realized Value is zero. In all other cases, the Vehicle‘s Realized Value will be, at our option: (1) the gross wholesale sales price we receive for the Vehicle at disposition; (2) the fair wholesale market value of the Vehicle at termination according to a recognized used vehicle guide
customarily used by motor vehicle dealers selected by us, including, but not limited to, Black Book, or other commercially reasonable valuation methodology, taking into consideration the Vehicles mileage and physical condition or (3) any amouht you and we agree to in writing after termination.
F. INDEPENDENT APPRAISAL. You may obtain, at your expense, a professional appraisal by an independent third party, agreed to by you and us, of the value that could be realized at sale of the Vehicle at wholesale. The appraisal amount shall be final and binding.
