Lease then Buyout - Contract Explanation

[dmk08]

I bought a demo with 5.4k miles on it and managed to get 11% off MSRP. Since it was still sold new and had the warranty I thought it was worth it. I’m sure someone has gotten a non demo one with the discount but i couldn’t find one in the ceramic silver color I wanted so went with the demo.

They are offering me 10% off MSRP + $.50 per mile.

Dealer contact is a friend of a good friend who works @ Hyundai. He is saying they generally only give $.25 per mile on demos.

Biggest problem is the car I wanted (blue) is now gone and all they have is this black demo. Not my desirable color but he said deals like this won't be on the incoming 2021s...

 

[AYip31]

They are offering me 10% off MSRP + $.50 per mile.

Dealer contact is a friend of a good friend who works @ Hyundai. He is saying they generally only give $.25 per mile on demos.

Biggest problem is the car I wanted (blue) is now gone and all they have is this black demo. Not my desirable color but he said deals like this won't be on the incoming 2021s...

not bad. Depending on how many miles it has. Maybe get them to change the oil. Maybe have them throw in a color match pen, it only retails for about $10

 

[Brandonfontes]

Thanks for the tips!! I went back to the dealership today and got an adjusted cap cost with the 24 month lease option. How does this look?

Also new to this and trying to research my options. When looking at the pictures you shared on the lease agreement, where would I see the cap cost? I don't see that called out. Just trying to learn how to read these numbers. Thanks!

 

[TacoTuesday]

Has it ever been explained why KMF allows this lease buy out process after offering large amounts of lease cash and other incentives before hand? Does this apply to all new Kia vehicles? Are we taking advantage of a loophole Kia is not so keen on or are they simply allowing this to happen? Could it end?
Sorry if this has been asked before and thanks for any information on this.

 

[AYip31]

Has it ever been explained why KMF allows this lease buy out process after offering large amounts of lease cash and other incentives before hand? Does this apply to all new Kia vehicles? Are we taking advantage of a loophole Kia is not so keen on or are they simply allowing this to happen? Could it end?
Sorry if this has been asked before and thanks for any information on this.

I’m sure Kia is well aware of it.
As long the lease rebate is high enough to justify going the lease buyout route.
On different Kia vehicles, you would have to review the lease agreement to see if it’s the same as the Stinger lease agreement

 

[Rob M]

@TacoTuesday... Kia only offers big lease incentives on vehicles intended to compete with European luxury car market. Majority of BMWs, MBs, Audis, etc., are leased. So Kia feels compelled to offer an attractive lease for Stinger, but due to lower predicted residuals, they need to throw cash at the deal. They could implement a heavier penalty for doing an early buyout, but that kind of restriction would turn away some lessees. I'm sure Kia is still making a profit in cases of early buyout.

 

[TacoTuesday]

@TacoTuesday... Kia only offers big lease incentives on vehicles intended to compete with European luxury car market. Majority of BMWs, MBs, Audis, etc., are leased. So Kia feels compelled to offer an attractive lease for Stinger, but due to lower predicted residuals, they need to throw cash at the deal. They could implement a heavier penalty for doing an early buyout, but that kind of restriction would turn away some lessees. I'm sure Kia is still making a profit in cases of early buyout.

Thank you.

 

[Brandonfontes]

hey stinger friends. got a lease offer this evening and curious if someone can help me understand it. (i'll even include the screenshot of their purchase offer) so I'm assuming the "adjusted price" is what the adjusted cap cost would be on the buyer order? the folks who have leased before - does this breakout look familiar? this is a 2020 GT1 AWD and the current lease rebate should be $7,900 which means they're taking off $3,937 as a dealer discount, which is 8% off MSRP ($3,937 +$7,900 = $48,745). one thing to note is I dont see tax in the breakout - i'm assuming that's because this dealer is located in NH where there is no sales tax, but my car would be registered in MA where I live so I'm assuming I'd need to add on 6.25% sales tax to this equation to calculate if the buyout option is worth it? Thanks!

 

[AYip31]

hey stinger friends. got a lease offer this evening and curious if someone can help me understand it. (i'll even include the screenshot of their purchase offer) so I'm assuming the "adjusted price" is what the adjusted cap cost would be on the buyer order? the folks who have leased before - does this breakout look familiar? this is a 2020 GT1 AWD and the current lease rebate should be $7,900 which means they're taking off $3,937 as a dealer discount, which is 8% off MSRP ($3,937 +$7,900 = $48,745). one thing to note is I dont see tax in the breakout - i'm assuming that's because this dealer is located in NH where there is no sales tax, but my car would be registered in MA where I live so I'm assuming I'd need to add on 6.25% sales tax to this equation to calculate if the buyout option is worth it? Thanks!

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8% is ok, not great. See if you can get another dealer to beat it then play them off each other. 10% or more would be great, or you can let the dealer know: their only $937.50 away from you signing on the dotted line.
I would not put any money down at signing beside a trade-in.
Adj price is NOT the Adj Cap Cost
the Adj Cap Cost is the final balance offer
According to this offer sheet, including money due at signing, your final balance is $38,603
So when you review your lease agreement, look for the Adj Cap Cost. Should be equal to the final balance

 

[Brandonfontes]

I’m assuming the top is the lease quote and the bottom quote is a finance?

8% is ok, not great. See if you can get another dealer to beat it then play them off each other. 10% or more would be great.
I would not put any money down at signing beside a trade-in.
Adj price is NOT the Adj Cap Cost
the Adj Cap Cost is the final balance offer
According to this offer sheet, including money due at signing, your final balance is $38,603
So when you review your lease agreement, look for the Adj Cap Cost. Should be equal to the final balance

Gotcha thanks this is helpful! So I am getting two dealers to play off each other, in fact I I may be able to get another guy (local in MA) to honor the purchase offer on a new gt2 in my color preference so it comes to about another $2000 difference. So spend $2000 more from than the lease buyout and get my choice of color in a gt2. Otherwise I'll try and get this guy to come down on the lease offer a bit and get the black gt1 for $2000 less. If thats the case I now need to see the buyer order/lease agreement and make sure the adj cap cost is what we agreed on and confirm the early termination fees? (I calculated a $500 term fee when I did my math, any other fees to add when buying out a lease?)

Thanks again man, you've been extremely helpful!

 

[AYip31]

Gotcha thanks this is helpful! So I am getting two dealers to play off each other, in fact I I may be able to get another guy (local in MA) to honor the purchase offer on a new gt2 in my color preference so it comes to about another $2000 difference. So spend $2000 more from than the lease buyout and get my choice of color in a gt2. Otherwise I'll try and get this guy to come down on the lease offer a bit and get the black gt1 for $2000 less. If thats the case I now need to see the buyer order/lease agreement and make sure the adj cap cost is what we agreed on and confirm the early termination fees? (I calculated a $500 term fee when I did my math, any other fees to add when buying out a lease?)

Thanks again man, you've been extremely helpful!

only other thing i see missing would be taxes.

 

[Dina Autry2q]

Question: How long did it take to complete your buy out process?

We got our good deal and now have our buy out quote and conventional financing ready. KMF is now saying that it can take 90 days to get the title (copy is required by bank).

Has it actually taken anyone 3 mo to complete your buy out?

 

[Buzz]

KMF was super slow and disorganized, I would trust them there. Ages for the title to settle, ages to have their fax lines actually receive a fax, ages to actually get a response in a system that may or may not work and has multiple days between tries.

 

[AYip31]

Question: How long did it take to complete your buy out process?

We got our good deal and now have our buy out quote and conventional financing ready. KMF is now saying that it can take 90 days to get the title (copy is required by bank).

Has it actually taken anyone 3 mo to complete your buy out?

I got lucky, 4 days after signing the lease, it showed up on KMF.
But I’m in FL, I had to go to a dealership to process and finalize the buyout
but I’ve had read in this thread, that it can be that long.

 

[Dina Autry2q]

KMF was super slow and disorganized, I would trust them there. Ages for the title to settle, ages to have their fax lines actually receive a fax, ages to actually get a response in a system that may or may not work and has multiple days between tries.

Thanks Buzz. At least we know. I thought The Hubs was gonna have a meltdown when they told him 3 months lol. We are actually trying to work it out with the bank to move forward without it.

 

[ATLStinger]

I'm close to pulling the trigger on a GT2 (multiple in the area - Atlanta), and trying to understand the lease buyout and figure out if it's the best route.

I've read multiple pages of this thread and others, but I want to make sure I am understanding correctly.

At baseline - if I 100% intend to pay for the car in full, I should ask for a lease?

 

[AYip31]

I'm close to pulling the trigger on a GT2 (multiple in the area - Atlanta), and trying to understand the lease buyout and figure out if it's the best route.

I've read multiple pages of this thread and others, but I want to make sure I am understanding correctly.

At baseline - if I 100% intend to pay for the car in full, I should ask for a lease?

you don’t not need to pay the car in full, at the time of the buyout. you can take out a. traditional car loan at the time of buyout
Go back and review my post, #1154

 

[ATLStinger]

you don’t not need to pay the car in full, at the time of the buyout. you can take out a. traditional car loan at the time of buyout
Go back and review my post, #1154

I think I've gotten the gist.

I'm looking for a 2020 White GT2. I need to negotiate dealer discount (10%) first, then find out lease rebates. Then negotiate cost of the trade (potentially).

 

[AYip31]

I think I've gotten the gist.

I'm looking for a 2020 White GT2. I need to negotiate dealer discount (10%) first, then find out lease rebates. Then negotiate cost of the trade (potentially).

yep

 

[MattMN]

A lease buyout, takes advantage of the lease rebate.
In order to do a lease buyout 1st you must have good to great credit.
Then do a lease term 24 months 12K miles to get the biggest lease rebate.
Get at least 10% or more on dealer discount off MSRP, but do not pay the dealership addendum sticker.
Then subtract the lease rebate.
Then subtract your trade-in. If you have a car to trade in.
Then add Tax, Tag, doc fee, and acquisition fee, but Beware of BS fees.
Then this is your balance, which is also your Adjusted Cap Cost
When going to sign the lease agreement, make SURE Adj Cap Cost is the same as the balance you agreed too.
Also make sure and read sections sections 9, 22D, 23B.
Congrats you are now driving away with a new Stinger.
Sign onto KMF, verified your VIN, click get buyout quote.
If it said please contact dealership. You need to go to a dealership to buyout.
You can go to any dealership to buyout.
If required to buyout the lease at dealership, they will add Tax, Tag, and fees again. Again Beware of BS fees.
Get financing through a credit union.
This is were you can put your down payment.
Congrats you now have a traditional car loan and own the car.

Question on the text bolded above. Do you really need to pay tax on the same vehicle twice - once on the lease and once on the buyout? That doesn't seem right. That's at least a $2k extra charge. Is everyone encountering this?

I'm also in Florida, like @AYip31 , but doesn't seem like that should vary by state.