Lease then Buyout - Contract Explanation

[Jay B.]

@SVT2003 That is better than I first thought. I thought the dealer really took you to the cleaners, but you did fine.

Your buyout will be the $41405 plus a $300 buyout fee and any sales tax for your state. You should definitley buyout ASAP to save on the high rent charges of the lease. Put down as much as you want on the credit union loan that you will get to perform the buyout. Obviously the more you put down, the less interest expense you will over the term of the loan.

The residual number does not mean anything if you are doing a buyout.

 

[SVT2003]

Thank you Jay B. I guess they screwed something up on the paperwork and actually paid my first lease payment. My next payment is not due until September 1. I guess at that point I’ll take out a loan for the remaining balance and put down the 22k I have in my savings and finance the rest for 2.99%

 

[Ruturaj]

What would I save if I did the buyout now versus buying at the end of the lease

Equivalent APR to money factor on 24 month lease was 5.6% for you it seems lower may be 4.5%. So you would save difference in interest. Also you are getting taxed on payment which is depreciation + rent charge (interest), after buying out you would pay tax only on buyout amount. So whatever sales tax on your rent charge is, you would save that.

 

[Ruturaj]

This is a photo of the agreement

Can you take picture of where the added 650 lease fee to 49554 plus something (that I am curious about) and came up with 51305. Because it should have been 50204 (agreed up on price + lease acquisition fee).

 

[SVT2003]

They snuck the tire/wheel program in. I was told it was part of all the lease vehicles. I didn’t know I’d be charged for it

 

[Ruturaj]

They snuck the tire/wheel program in. I was told it was part of all the lease vehicles. I didn’t know I’d be charged for it

Seems like dealer did mess up the first month payment if he didn't charge you at time of signing. He might ask later on though. Everything else looks right.

 

[SVT2003]

The sales manager actually said that they’d eat it. They also threw in a remote start and cargo mat (I squeezed them on the last day of the month) so the buyout should be about $42,000 plus tax?

 

[Ruturaj]

The sales manager actually said that they’d eat it. They also threw in a remote start and cargo mat (I squeezed them on the last day of the month) so the buyout should be about $42,000 plus tax?

41405 - whatever out of first month went towards depreciation + 300 (buyout fee) + sales tax (if you are resident of one of these states AZ, CA, CT, ID, KS, ME, MI, MS, NV, NJ, NY, OH, TN, UT, WA & WI or else tax is due at DMV at the time of registration).

 

[MerlintheMad]

I just sound the rent charge to be $3551.20, in Massachusetts the sales tax is part of the monthly payment. I’m assuming the residual value and monthly payments should include the sales tax with the buyout?

Not sure about that question. I do know that the updated buyout amount includes any remaining sales tax and known fees.

 

[Jaymorz]

The sales tax would apply at the buyout whether its after the maturity of the lease or an immediate buyout.

Rent charge can be avoided if bought out ASAP. However, depending on the loan you inherit you will pay some form of interest regardless.

 

[Ruturaj]

Not sure about that question. I do know that the updated buyout amount includes any remaining sales tax and known fees.

Merlin, it's different state to state.
1. Some state charge tax of lease payments upfront (at buyout this will go waste as it will be included in capitalized cost + tax on buyout amount)
2. Some state charge tax on lease payment monthly (at buyout you don't have to pay this but have to pay tax on buyout amount)

 

[tempofast]

Has anyone in Illinois completed the lease buyout? Did it require you to visit the dealership to complete paperwork (like in FL)?

Thank you!

 

[Stinger-Performance]

Can somebody help me understand how all of this works. Here is the quote I got from a dealer to buy or lease a 2019 GT RWD.

Current Market Value 40,420.00
Rebate (K.m.f) 2,750.00
Dealer Discount 5,636.00
New Price 32,034.00
Destination 995.00
Processing Fee 799.00
State Taxes( Kansas) 3,308.34
Est Tag Fees 514.60
------------------------------------------------------------
Out the door 37,650.94

All they gave me for the lease is:

24 months 10k only first payment $677.38

If I understand correctly, there is a $6300 lease incentive currently for a 24 month lease.
Can someone tell me what the buyout price would be if I did the lease and then bought it out after the first payment?

Thanks.

 

[Jay B.]

@Stinger-Performance If you do a lease buyout you would replace the $2,750 rebate with the larger $6,300 lease incentive. So about 3500 less there. But there is a lease buyout fee of around $400 you have to add back in. So the buyout would be around $34,600.

But you should negotiate a little more. The destination fee is already included in the window sticker and MSRP, so you should be able to eliminate the $995 there. processing fee of $799 seems high, but this is controlled by local markets/conditions.

 

[Stinger-Performance]

@Jay B. Thanks for the info, just what I was looking for.

 

[Guitarcrazy]

View attachment 30643 Hello. I am purchasing a new 2019 GT2 AWD Ceramic and Red using the lease buyout. Anything I need to know before signing on this? Thanks in advance. View attachment 30642

 

[ZaZ]

View attachment 30692 View attachment 30643 Hello. I am purchasing a new 2019 GT2 AWD Ceramic and Red using the lease buyout. Anything I need to know before signing on this? Thanks in advance. View attachment 30642

That deal looks great! Was it in MD and did you end up getting it at those same numbers?

 

[KyleSC]

View attachment 30692 View attachment 30643 Hello. I am purchasing a new 2019 GT2 AWD Ceramic and Red using the lease buyout. Anything I need to know before signing on this? Thanks in advance. View attachment 30642

The numbers look great, but buyout costs vary from state to state. I would check the early payoff penalties in your state.
I leased a 19' GT2 in July 24/mo 10k miles. The rebate was $9,900. The dealer tried to sneak in a Kia Care Plan cost... $1,155. It basically covers oil changes on their terms, ripoff. My list was $53,600... 5k down, which covered 1st payment and junk fees. My discount was right at 4k. Kia finance said i would have to go through a dealer for the paperwork, but not the original, thank god. After 2 payments of $430 this is the buyout with dealer doc fees, registration, sales tax... All in all not bad...

 

[orangeoranges]

What does people think about this deal for gt2?

Market value Selling Price: 54,305
Discount: 4,532
rebate: 10,200
adjusted price: 39,573
doc fee: 399
title fee: 135
acq fee: 650
tax: 89.46

Balance: 40,846.46

Any help would be greatly appreciated! Thanks

 

[Lynix]

What does people think about this deal for gt2?

Market value Selling Price: 54,305
Discount: 4,532
rebate: 10,200
adjusted price: 39,573
doc fee: 399
title fee: 135
acq fee: 650
tax: 89.46

Balance: 40,846.46

Any help would be greatly appreciated! Thanks

From what people have been posting I would shoot for at least 5k off. It seems like most people are getting around 10% off msrp