Lease then Buyout - Complete Experience/Explanation

[Atheleus]

Yep, no need to wait per the lease agreement. I bought mine out before second payment was due...first payment paid at lease signing.

Keep us posted on the title release since you used personal funds. Ill update as soon as mine is release also

I received my title and Bill of Sale in the mail from KMF. The bill of sale says that I paid $0 in taxes, and now the state (MN) is telling me that I owe them 6.5% on the full amount of the buyout total. Somehow I was not expecting this at all. Feels bad.

 

[iclicku]

I received my title and Bill of Sale in the mail from KMF. The bill of sale says that I paid $0 in taxes, and now the state (MN) is telling me that I owe them 6.5% on the full amount of the buyout total. Somehow I was not expecting this at all. Feels bad.

Hope you contact KMF and ask what the heck is going on...

 

[Atheleus]

Hope you contact KMF and ask what the heck is going on...

First thing Monday morning.

 

[Mach_Tuck]

I received my title and Bill of Sale in the mail from KMF. The bill of sale says that I paid $0 in taxes, and now the state (MN) is telling me that I owe them 6.5% on the full amount of the buyout total. Somehow I was not expecting this at all. Feels bad.

Did you pay the tax as part of buyout? What was adjusted lease balance vs what you sent for the buyout.

The amount i sent was adj lease balance plus AZ tax. Math was spot on. Now, I've yet to see the bill of sale so it is entirely possible KMF screwed it up. Should be easy to clear up based on lease and adj lease balance and what you paid.

So far, all dealings with Kia in general have been lacking...

 

[Atheleus]

I guess I am not really sure that I did. Where would I find the adjusted lease balance? I requested the buyout quote from KMF online and the following message appeared with the buyout total:



After I saw that, and before I pulled the trigger, I called KMF and asked them to confirm that all of the taxes were included. I wanted to be sure that I was fully prepared for the total expense. The person on the phone told me that the taxes were indeed included, and that they had paid the state already. This is why I am confused as to the actual Bill of Sale that they sent to me with the title that states $0 in taxes were collected or paid. That line on the bill of sale is why the state of MN is telling me that I owe taxes on the full amount.

I could see owing taxes on the residual value maybe, but for the full amount? This is what is not making sense to me. There had to be SOME taxes paid already-my Kia dealership is trying to tell me the State of MN is hitting me with tax because I turned it into a purchase, and a sale is a sale. They tax on all leases or sales, and so whatever was paid to the state initially is irrelevant, once I turned it into a purchase, I owe taxes on the full 'sale' price.

 

[Mach_Tuck]

Correct. You owe tax on the purchase amount. Purchase amount is adjusted lease balance which is defined in sec22 of the lease agreement. Essentially it's the adjusted cap cost minus any amortized amounts already paid AND then you owe tax on that balance. It would vary based on how many payments you made. Remember too that lease payment include amortized amounts plus rent plus tax. You don't get credit for rent and tax.

 

[Atheleus]

Correct. You owe tax on the purchase amount. Purchase amount is adjusted lease balance which is defined in sec22 of the lease agreement. Essentially it's the adjusted cap cost minus any amortized amounts already paid AND then you owe tax on that balance. It would vary based on how many payments you made. Remember too that lease payment include amortized amounts plus rent plus tax. You don't get credit for rent and tax.

So the adjusted lease balance is $44,058.67. If I am understanding you correctly-I own the state of MN 6.5% of that ($2,863.81)

 

[Mach_Tuck]

So the adjusted lease balance is $44,058.67. If I am understanding you correctly-I own the state of MN 6.5% of that ($2,863.81)

Assuming your adjusted lease balance is correct...yes. If your check was for $46,900ish then I'd say you already paid the tax.

Mine was very close to the same at $44,800 and I sent $48,400 as AZ tax is some 8%.

 

[NYLAWBIZ]

In NY, you pay sales tax partially twice: first based on the total of the lease payments under the lease; then for the residual when you buyout. That's why if you are dong to a lease/buyout (at least in NY) the lower the total of the lease payments, the less it costs. For that reason, best to put as much cash down on lease signing (knowing for sure you are buying the car out shortly), so the scheduled lease payments over the life of the lease (which of course you are not going to make) is as low as possible, so the sales tax on the total payments is as low as possible.

 

[Mach_Tuck]

There are a few "special" case states. I believe Texas has some rules that penalize or can penalize thus process. Please understand these BEFORE signing anything.

 

[Atheleus]

Assuming your adjusted lease balance is correct...yes. If your check was for $46,900ish then I'd say you already paid the tax.

Mine was very close to the same at $44,800 and I sent $48,400 as AZ tax is some 8%.

What about the initial amount of tax that was paid at signing? That should be taken into account, right? My State is an upfront tax state, so I paid $850 or so in initial tax.

 

[Mach_Tuck]

I only paid tax on first month payment and tax on lease cash up front...that is it. More than likely thats what you paid

 

[Atheleus]

I only paid tax on first month payment and tax on lease cash up front...that is it. More than likely thats what you paid

My State collects tax upfront. I ended up paying about $850 in tax upfront after my trade in credit. After speaking with the State of MN, they tell me that they will credit me for the initial $850 and I will pay the remaining $2,000 in tax.

Thanks for all the help Mach_Tuck

 

[Thang]

The misinformation that I received from KMF USA has been horrible. As I stated, last week I sent a check overnight and they look my money on 04/19. Balance showed $0. Yesterday, I check again, and it shows they reversed my payment even though they have my money. I called and they said in 8 states, Colorado being one of them, in-order to pay off the car they must receive the an actual Dealer check. This was after I called and confirmed with two separate reps at KMF USA to confirm that I could pay them directly.

They stated that they send me a check on 04/20 for all of my money back. I asked for the new payoff amount and it has gone up by over $250 since it's a new billing cycle. KMF USA said any Hyundai / KIA Dealership can pay off. I called the closest Hyundai dealership near me and they declined. I called a few more KIA Dealerships (including the one I bought from, the one that refused to let me pay off immediately) and got hung up on or no one responded. I left a desperate message to one KIA Dealership about an hour away. The finance manager called back and he said the other dealership I bought from was clearly lying to me and it indeed can be paid off immediately. Once I get my check from KIA, I will be heading down to this dealership that's willing to help and perform the lease buyout. What an absolute headache.

 

[SEA Stinger]

The misinformation that I received from KMF USA has been horrible. As I stated, last week I sent a check overnight and they look my money on 04/19. Balance showed $0. Yesterday, I check again, and it shows they reversed my payment even though they have my money. I called and they said in 8 states, Colorado being one of them, in-order to pay off the car they must receive the an actual Dealer check. This was after I called and confirmed with two separate reps at KMF USA to confirm that I could pay them directly.

They stated that they send me a check on 04/20 for all of my money back. I asked for the new payoff amount and it has gone up by over $250 since it's a new billing cycle. KMF USA said any Hyundai / KIA Dealership can pay off. I called the closest Hyundai dealership near me and they declined. I called a few more KIA Dealerships (including the one I bought from, the one that refused to let me pay off immediately) and got hung up on or no one responded. I left a desperate message to one KIA Dealership about an hour away. The finance manager called back and he said the other dealership I bought from was clearly lying to me and it indeed can be paid off immediately. Once I get my check from KIA, I will be heading down to this dealership that's willing to help and perform the lease buyout. What an absolute headache.

This is indicative of simply abysmal behavior by both KMF and local KIA dealers.

KIA Korea should find some new people to run KMF, and impose harsh discipline on dealers who play these kinds of bogus games.

If the same BS keeps happening, Stinger owners should consider filing formal complaints with their state consumer protection agencies.

 

[Mach_Tuck]

So I have supplied 3 fax and 1 hard copy of my odometer disclosure to KMF and still
They are saying they don't have it. Credit union is now getting involved as KMF won't release the title.

The fun continues.

 

[CDv6]

So I have supplied 3 fax and 1 hard copy of my odometer disclosure to KMF and still They are saying they don't have it. Credit union is now getting involved as KMF won't release the title.

I've had a similar experience, going on 3 months now.

 

[Thang]

The misinformation that I received from KMF USA has been horrible. As I stated, last week I sent a check overnight and they look my money on 04/19. Balance showed $0. Yesterday, I check again, and it shows they reversed my payment even though they have my money. I called and they said in 8 states, Colorado being one of them, in-order to pay off the car they must receive the an actual Dealer check. This was after I called and confirmed with two separate reps at KMF USA to confirm that I could pay them directly.

They stated that they send me a check on 04/20 for all of my money back. I asked for the new payoff amount and it has gone up by over $250 since it's a new billing cycle. KMF USA said any Hyundai / KIA Dealership can pay off. I called the closest Hyundai dealership near me and they declined. I called a few more KIA Dealerships (including the one I bought from, the one that refused to let me pay off immediately) and got hung up on or no one responded. I left a desperate message to one KIA Dealership about an hour away. The finance manager called back and he said the other dealership I bought from was clearly lying to me and it indeed can be paid off immediately. Once I get my check from KIA, I will be heading down to this dealership that's willing to help and perform the lease buyout. What an absolute headache.

KMF is quite possibly the worst company I've ever dealt with.

Finally got my refund check 2 1/2 weeks later. Deposited the money back into my bank and went to a dealership to pay off my car the very next day. Wrote the dealership a check. Dealership did an electronic funds transfer with KMF on 05/10. I called on 05/14 asking if they've received payment since I didn't see it shown on the website. They said it takes up to 6 business days for the website to be updated. I checked this morning and it still doesn't show payment / payoff complete. The woman I spoke to said that they received payment on 05/10 but the odd thing is that the lease buyout team hasn't done anything with the money. They have not applied it towards my account / buyout. She had to write an email to the lease buyout team as there is no way to communicate them directly via phone or in-person. Thing is, if it's not processed by tomorrow 05/19, the lease buyout amount will go up and that's also when a payment would have been due. Two months of me trying to pay off the car with no success even though they've taken my money out of my account twice.

 

[stingeradmr]

I will never buy another Kia. I've had alot of problems with KMF also. I bought out the lease and they applied it to the lease, not as a buy out. I still have not recieved the title yet either, have sent several odometer statements. Either they have a bunch of morons or dishonest people

 

[SEA Stinger]

My lease buyout process with KMF was one of the most woeful, disgusting experiences I have ever endured as a consumer. By comparison, they make Comcast look like paragons of competence, honesty, diligence and responsiveness.

Do not trust what the KMF customer service people tell you over the phone. My experience was that what they said to me usually was not accurate. And what they promised to do typically did not happen...

Some tips:
1. ALWAYS take notes about your phone calls to KMF, including who you spoke with, day & time of call, topics discussed, actions requested of you, and commitments promised to you.
2. Keep track of what actually happens after each call. If KMF promises to send you something in 7 business days, check to confirm that it arrives on schedule and is what was promised - even though/because it probably won't be. At least that was my experience.
3. When KMF drops the ball/fails to perform, follow up promptly.
4. When you have to follow up, don't play service rep roulette - instead, escalate. Call KMF and tell the service rep who answers that your initial request wasn't handled as promised, and politely but firmly request to speak with a supervisor. If the rep balks, tell them to check the notes on your account, and remind them that this is a follow-up to something that should already be resolved but isn't.
5. When you speak with the supervisor (again, get their name), ask them why the issue hasn't been resolved, even though you did what you were initially instructed to do. After they finish their lame explanation, ask what else needs to be done to resolve it. You will typically be told things that the front-line defense (service rep) didn't know or wasn't authorized to tell you.
6. Write down what the supervisor tells you to do and what they promise KMF will do. Get a clear sequence and timeline for both.
7. Recite the instructions/next steps back to the supervisor and ask them to confirm that these are accurate and complete.
8. Ask the supervisor to confirm that the described process will fully and finally resolve the issue.

Also, be prepared to receive and submit documents to KMF via fax. They do not send or accept documents via email.