Lease then Buyout - Contract Explanation

[ignorerant]

Is there any way for a resident of Texas to take advantage of the Lease-to-Buyout method of cost savings?

 

[Jay B.]

@ignorerant Yes, you can do a balloon loan through the dealership to qualify for the lease incentives and then pay off the baloon loan early to avoid interest. There are many posts on here prior with people doing this. Just search balloon and texas. Good luck.

 

[rytabb]

Hoping someone can help me calculate what my lease buyout would be as I just got a quote on a new 2018MY GT2 (Buying in Nevada, registering in California).

MSRP: 50,150

Negotiated Price: 42,500

Rebate: 10,000

Sales Tax: 2,146.22

Doc Fee: 499.50

Other Fees: 197.25

Net Price: 35,343.47

Net Residual 26,579

Thanks for all your help!

 

[Ruturaj]

Hoping someone can help me calculate what my lease buyout would be as I just got a quote on a new 2018MY GT2 (Buying in Nevada, registering in California).

MSRP: 50,150

Negotiated Price: 42,500

Rebate: 10,000

Sales Tax: 2,146.22

Doc Fee: 499.50

Other Fees: 197.25

Net Price: 35,343.47

Net Residual 26,579

Thanks for all your help!

35,343.47 - (monthly payment x months you wait to buyout) + interest for those months

Seems like your monthly payment would be close to 390

You will pay first monthly payment when you start the lease

Your buyout after that would be close to 35,200

Approximate numbers.

 

[NimitzGT2]

For those who got an auto loan through a CU or bank, what did you need to payoff the lease? From what i can tell, KMF just wants the odo disclosure, and a check with the payoff amount on the quote. My CU keeps asking me for a buyout packet from KMF and I cannot for the life of me find anything online of such a thing (other than the end-of lease packet with your options, and checklist which doesn't apply because I am not turning it in). The buyout quote from my online account just asks for a check with the account # in the memo field, the odo disclosure so they can release the title...and that's it. I even called them and the guy helping me thought I meant the odo disclosure form when asking for a lease buyout packet.

Anyone have an idea? I didn't want to keep calling KMF support if it doesn't exist, but if I need to because the rep misunderstood what I need, I want to know for sure so I don't end up talking in circle again.

 

[CDv6]

For those who got an auto loan through a CU or bank, what did you need to payoff the lease? From what i can tell, KMF just wants the odo disclosure, and a check with the payoff amount on the quote. My CU keeps asking me for a buyout packet from KMF and I cannot for the life of me find anything online of such a thing (other than the end-of lease packet with your options, and checklist which doesn't apply because I am not turning it in). The buyout quote from my online account just asks for a check with the account # in the memo field, the odo disclosure so they can release the title...and that's it. I even called them and the guy helping me thought I meant the odo disclosure form when asking for a lease buyout packet.

Anyone have an idea? I didn't want to keep calling KMF support if it doesn't exist, but if I need to because the rep misunderstood what I need, I want to know for sure so I don't end up talking in circle again.

Sounds like your credit union needs to explain exactly what they require. My credit union issued the check on good faith (and credit), and I had one or two months to deliver the title to them, which proved that I was buying a car with the check. If I had not delivered the title, they were just going to convert it to a non-car loan, which would have raised the interest rate.

As I recall, KMF simply required the payoff check and odo statement, then sent the title directly to my CU. (There was probably a 3rd form that had the credit union’s info, but I don’t recall exact details.)

 

[MacAtk]

I went in to get numbers on a leased GT2 with a dealer that was listing pretty well discounted stingers. They came back with the starting price as full MSRP and the only rebate as the standard 9400 lease cash. How close was a listed price in comparison to what you guys got in dealer discounts with a lease?

 

[Ruturaj]

I went in to get numbers on a leased GT2 with a dealer that was listing pretty well discounted stingers. They came back with the starting price as full MSRP and the only rebate as the standard 9400 lease cash. How close was a listed price in comparison to what you guys got in dealer discounts with a lease?

I got 4k off.

 

[MerlintheMad]

I went in to get numbers on a leased GT2 with a dealer that was listing pretty well discounted stingers. They came back with the starting price as full MSRP and the only rebate as the standard 9400 lease cash. How close was a listed price in comparison to what you guys got in dealer discounts with a lease?

Welcome, Mac. The first words out of the sales rep's mouth were, "We'll knock $2,995 off of MSRP up front." Turns out that was a fairly competitive dealer discount. Added to Kia lease incentive of $5,900 I was impressed to take the lease. (Then the dealer added back on a bunch of "fees" and "dealer expenses", etc. But I wasn't savvy enough at the time to watch out for that. Caveat emptor.)

 

[Ruturaj]

I went in to get numbers on a leased GT2 with a dealer that was listing pretty well discounted stingers. They came back with the starting price as full MSRP and the only rebate as the standard 9400 lease cash. How close was a listed price in comparison to what you guys got in dealer discounts with a lease?

Best way to make big jump in dealer discount is by getting costco pricing. Just get a email with it. Go to different location, show them the deal and ask for better. I think they are offering around 3.3-3.5k off of MSRP. I had a quote with 3700 off, I went to local dealer and he offered 4k off.

 

[captainstevo]

35,343.47 - (monthly payment x months you wait to buyout) + interest for those months

Seems like your monthly payment would be close to 390

You will pay first monthly payment when you start the lease

Your buyout after that would be close to 35,200

Approximate numbers.

Would it be fair to say another way of looking at the buyout, would be the residual + the monthly lease payment (excluding finance charges...so setting MF equal to 0.0) X months left in lease? I know it's a little more complicated than that, if you wait a while to buy it out....

There would be no reason not to lease for 24 months, since that currently has a higher lease cash versus 36 or 48, correct? In other words, lease for the # of months purely based on lease cash?

Would be interested to see if anyone in KY has done this, and if there are any issues with paying tax on the value of the car twice. Some delears in the Midwest have significant rebates from MSRP..

 

[Ruturaj]

Would it be fair to say another way of looking at the buyout, would be the residual + the monthly lease payment (excluding finance charges...so setting MF equal to 0.0) X months left in lease? I know it's a little more complicated than that, if you wait a while to buy it out....

There would be no reason not to lease for 24 months, since that currently has a higher lease cash versus 36 or 48, correct? In other words, lease for the # of months purely based on lease cash?

Would be interested to see if anyone in KY has done this, and if there are any issues with paying tax on the value of the car twice. Some delears in the Midwest have significant rebates from MSRP..

Yes.

Found this online
Kentucky provides two methods for paying taxes on leased vehicles. The tax can be paid in full when the vehicle is registered at the County Clerk, or the owner can contact the Kentucky Transportation Cabinet, U-Drive-It Section, at (502) 564-5301 to make arrangements to obtain a permit which will allow payments to be made on a monthly basis.

 

[captainstevo]

Yes.

Found this online
Kentucky provides two methods for paying taxes on leased vehicles. The tax can be paid in full when the vehicle is registered at the County Clerk, or the owner can contact the Kentucky Transportation Cabinet, U-Drive-It Section, at (502) 564-5301 to make arrangements to obtain a permit which will allow payments to be made on a monthly basis.

Thanks much for finding that! I'll call tomorrow just to make sure that if you opt for the monthly option that you don't have to pay out the full amount if the lease is bought out early. Wouldn't think so...

 

[Ruturaj]

Thanks much for finding that! I'll call tomorrow just to make sure that if you opt for the monthly option that you don't have to pay out the full amount if the lease is bought out early. Wouldn't think so...

Not sure about that. Do update when you get the info from them.

 

[MerlintheMad]

Thanks much for finding that! I'll call tomorrow just to make sure that if you opt for the monthly option that you don't have to pay out the full amount if the lease is bought out early. Wouldn't think so...

I don't see how you can avoid taxes. If you buyout, and you've been paying taxes monthly, the remaining taxes will be added on at the time of the buyout. The lease "rent", however, will be avoided for the months avoided by doing the buyout.

 

[Ruturaj]

I don't see how you can avoid taxes. If you buyout, and you've been paying taxes monthly, the remaining taxes will be added on at the time of the buyout. The lease "rent", however, will be avoided for the months avoided by doing the buyout.

Merlin, not avoiding taxes, avoiding paying tax twice.

In NY you have to pay tax on lease up front on lease payments and when you buyout you don't get credit. So you lost the money you paid upfront.

 

[MerlintheMad]

Merlin, not avoiding taxes, avoiding paying tax twice.

In NY you have to pay tax on lease up front on lease payments and when you buyout you don't get credit. So you lost the money you paid upfront.

Title changing hands requires you to pay as the new title holder; that's how I understand this racket. Kia holds the title while the lease is in force. If you get to pay taxes on a monthly basis (as opposed to the total tax up front as the lease begins), at least if you do the buyout quickly you don't lose that much money.

 

[Ruturaj]

Title changing hands requires you to pay as the new title holder; that's how I understand this racket. Kia holds the title while the lease is in force. If you get to pay taxes on a monthly basis (as opposed to the total tax up front as the lease begins), at least if you do the buyout quickly you don't lose that much money.

Every state is different.

1. Some states charges tax on cars price at front for lease and on buyout amount when you buy it out (so you paid approx 2x tax)
2. Some charge tax on leasing amount up front for lease and again on buyout. (you pay approx 1.5x tax)
3. Some state charge tax on monthly payment and on buyout amount. (you pay approx same tax)

If you have trade in then it makes a difference. In case 1 and 2 then will save up on up front tax on lease payments.

 

[usagi]

looks like the lease cash incentive is gone now

 

[Ruturaj]

looks like the lease cash incentive is gone now

It renews every month, that's how it goes up and down.

Dealers gets it in advance.