Max MF Markup?

[andyecon]

Has anybody tried to get a dealer to max out the MF in exchange for a bigger discount up front? If so, how much will KIA let them mark it up? I guess they may see a buy out coming as soon as you ask this, so I’d try to approach it gently.

Sorry if this has been discussed, I didn’t see this specific question on a quick search.

 

[appletinienjoyer]

This is what the lease-buyout discussions are all about. You'll see a bunch of threads about this.

Dealer doesn't care about the buyout since they get paid either way by Kia Motors Finance. They offer several thousand dollars of discount to lease the car if you take the worst possible terms, but then you can turn around and buy out the lease right away to never have to pay for the higher interest rate you'd be paying for taking crappy terms.

There's a thread titled "Lease Incentive History by Month". Look through that for details on how much of a discount you get for doing crappy lease terms. Also there's another thread pinned, "Lease then Buyout - Contract Explanation" you should read through.

I guess Kia Motors Finance thinks despite some people taking advantage of this to pocket the lease cash and buy out, they'll still come out ahead somehow. Either because they think most people won't do the buyout and take the bad terms, or maybe they think they can flip the leased cars a few years later for minimum depreciation (who knows with how expensive the used car market has been recently), or maybe they are doing this as an incentive to get the Stinger name out there and think it will payoff in terms of brand goodwill and reputation?

 

[andyecon]

This is what the lease-buyout discussions are all about. You'll see a bunch of threads about this.

Dealer doesn't care about the buyout since they get paid either way by Kia Motors Finance. They offer several thousand dollars of discount to lease the car if you take the worst possible terms, but then you can turn around and buy out the lease right away to never have to pay for the higher interest rate you'd be paying for taking crappy terms.

There's a thread titled "Lease Incentive History by Month". Look through that for details on how much of a discount you get for doing crappy lease terms. Also there's another thread pinned, "Lease then Buyout - Contract Explanation" you should read through.

Thanks, but what is the max they can mark up the MF? I didn't see that info precisely... is there no limit from KIA on that? I know BMW only lets them go so far for each credit tier.

 

[appletinienjoyer]

Thanks, but what is the max they can mark up the MF? I didn't see that info precisely... is there no limit from KIA on that? I know BMW only lets them go so far for each credit tier.

I have no idea. Do you plan on buying the lease out immediately? If so, then honestly it doesn't even matter what the MF rate is... you'll be paying the car off immediately, and paying maybe 1 month worth of payments. As such, I, and most people looking to do lease buyouts, haven't paid much attention to the actual rate as much as how big the lease cash discount is.

 

[andyecon]

Thanks, I completely understand your point that it doesn't matter what the MF is, for a given discount, if you buy out right away.

I'm asking about how to negotiate the biggest initial discount possible. Suppose they give me a 5% discount at base MF. Then I would like to counter with a 10% discount but a marked up MF that keeps the profit constant for them, since I will buy out immediately.

Of course, I realize that you can't take this to the limit of a 99.9% discount but infinite MF, I'm just trying to get a sense of how much you can push it.

 

[appletinienjoyer]

There's a very specific set of discounts for different terms. From my understanding, its not a sliding scale or anything like that. Please refer to the "Lease Incentive History by Month" thread to see March 2021 lease discounts for the different Stinger variants.

Again, these lease deals are thru Kia Motors Finance, not the dealer for most states. So there's no real negotiating on rates and such. There's a sheet with different lease cash promotions for various terms. If you qualify for specific terms, and choose to take those deals, you get specific cash promotions.

 

[andyecon]

Sorry man, I must not be clear in what I'm trying to ask.

In addition to the lease cash from Kia, the dealers give discounts. I have some at 5% with base MF. I'd like to get more dealer discount, but of course that reduces their profit. However, if they mark up the MF then they get more profit. So they should be willing to give more dealer discount in exchange for a MF markup. All of that is keeping the lease cash constant.

 

[appletinienjoyer]

Ah I understand.

I'm not too knowledgeable about the car industry, but I have extensive experience in other retail industries w/ financing/leasing components, and the terms of the lease/financing do not usually matter at all to the dealer. The dealer is not the financing company, they aren't a big enough institution to assume risk and determine proper payouts/discounts for varying interest rates, the financing company does. The dealer just gets the same amount of money regardless of whatever terms you get on the lease or financing, so it doesn't matter too much to them what the actual terms of the agreement are, and given that it most likely does not make a difference to them, I don't think they would care to negotiate and increase your MF to offer you a lower price overall.

Maybe if you manage to reach someone at Kia Motors Finance, they'd be the one with the incentive to cut deals, but I really doubt it, since at that point, it would be super obvious that you intend to do a lease buyout, since you're attempting to max out MF rate even beyond the terms that they offer a huge cash discount already.

 

[andyecon]

Ok, the folks at Edmunds tell me that the max MF markup is 0.0004, which on a 24 month lease, $53700 MSRP is equivalent to about 1.3% price change. So probably not worth trying to negotiate over anyway!

 

[andyecon]

So, I was able to squeeze an extra $350 on a deal by telling them to mark up the MF and give me a better discount!

 

[GTdsz]

It's easier to call a dealer and tell them to give you invoice lol

 

[andyecon]

It's easier to call a dealer and tell them to give you invoice lol

I mean, I'm about $1500 below invoice before the lease cash...

 

[GTdsz]

I mean, I'm about $1500 below invoice before the lease cash...

Before or after incentives?

 

[andyecon]

Before. Doing the lease to buyout. Have 8.6% off of a GT2 before the $6700 incentive.

Before or after incentives?

 

[GTdsz]

Before. Doing the lease to buyout. Have 8.6% off of a GT2 before the $6700 incentive.

You still have other fees involved with lease buyout. Everyone's gers their money

 

[andyecon]

You still have other fees involved with lease buyout. Everyone's gers their money

Sure, but if you can get $350 for a MF bump and plan to buy out the lease after one month, it is effectively more discount, so why not ask?

Even after the acquisition fee, this is by far the best way to get one of these cars if you can arrange for the cash to buy out the lease right away... I mean, after all fees I am at 19.5% off of MSRP and that is even with the somewhat low lease cash this year. People were getting more like 25% off on 2019's when they had >$10k in lease cash.

 

[GTdsz]

Sure, but if you can get $350 for a MF bump and plan to buy out the lease after one month, it is effectively more discount, so why not ask?

Even after the acquisition fee, this is by far the best way to get one of these cars if you can arrange for the cash to buy out the lease right away... I mean, after all fees I am at 19.5% off of MSRP and that is even with the somewhat low lease cash this year. People were getting more like 25% off on 2019's when they had >$10k in lease cash.

To each their own. I got 0% apr for 72 months. Put the $40,000 in a high yield account