Lease then Buyout - Contract Explanation

[Never thought]

Sorry if I missed it. I live in AZ and thinking of doing a early lease buyout. The dealer told me if I use a private bank to buyout the lease early I don’t have to pay sales tax on the buyout amount. I am glad I did some searching because that doesn’t appear to be true.

Can anyone in AZ confirm one way or the other? Thx!

 

[StingaGT]

Hi guys,

I read good portion of this thread. I haven't pulled the trigger yet, but it helped me so much getting idea of using lease incentive for purchase.
It seems like I should be able to save most on rent charge (or interest) if my account setup is completed on kma website sooner. as I will be paying monthly payment which includes the rent charge while the account is being setup.
Does this depend on dealer's documentation timing or is it purely KMA's job?
Also, once I initiate the buyout process, does the delay from KMA with title transfer cause any issue? ( I assume this is done after check is cashed??)
I think I have pretty good understanding of lease buyout portion in the lease contract, but not sure when to look for the loan or what I need to do after initiating the buyout process.
Can anyone please share what had to be done during your experience?

 

[MerlintheMad]

It's all in the thread. I'd just be repeating myself. But to directly answer your question about the timing: I applied for the buyout, and less than a month after I sent the cheque I had my title. If one lease payment was made during that time, it was deducted from the buyout figure. You won't end up making extra payments in addition to the buyout figure.

 

[Nick Worrell]

Has anyone ever used the lease guide that you can purchase online?

On a Lease you do not get a tax credit for your trade in. The way to take advantage of the tax credit is to trade in your vehicle upon the buyout as oppose to during the lease period as the buyout is a purchase. You will get your tax credit that way.

 

[RingStingerGT]

I leased my GT2 AWD in August which got me a 7K rebate, they also dropped the price another 2500 and gave me buy rate on the money factor, however, when you calculate the interest cost it’s high. They said after four months I could buy it out without having to pay back the rebate. Rebate was only available if I leased. Thinking of buying out. Bought in June for 45K.

 

[MerlintheMad]

I leased my GT2 AWD in August which got me a 7K rebate, they also dropped the price another 2500 and gave me buy rate on the money factor, however, when you calculate the interest cost it’s high. They said after four months I could buy it out without having to pay back the rebate. Rebate was only available if I leased. Thinking of buying out. Bought in June for 45K.

"Pay back the rebate": those words have never been strung together on this forum until now. What are you talking about? The whole point of buying out the lease is to take full advantage of the lease rebate to lower the out the door cost, then pay off the lease (buyout) as soon as possible. Nobody has to "pay back the rebate"!

 

[RingStingerGT]

You’re right. I mis states that. For some reason I was told I couldn’t buy it out until after I made 4 payments

"Pay back the rebate": those words have never been strung together on this forum until now. What are you talking about? The whole point of buying out the lease is to take full advantage of the lease rebate to lower the out the door cost, then pay off the lease (buyout) as soon as possible. Nobody has to "pay back the rebate"!

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[MerlintheMad]

You’re right. I mis states that. For some reason I was told I couldn’t buy it out until after I made 4 payments

There is no waiting period. Once your buyout figure appears on your owners.kia.com finance page, you're good to go.

 

[RingStingerGT]

There is no waiting period. Once your buyout figure appears on your owners.kia.com finance page, you're good to go.

So I guess they lied to me lol

 

[MerlintheMad]

So I guess they lied to me lol

That's what others have said on this discussion: dealers do that. I didn't involve my dealer at all in the buyout; didn't ask them about it or anything. Not that I think these guys would have lied to me: just not any point in involving them once the lease is in force, since it is HCA Exchange, Inc. that handles the buyout.

 

[RingStingerGT]

What is the best bank or credit union for a buyout loan? I'm paying $700 a month, and would love to lower my payment if I could through a buyout, otherwise, I will hold off until my installment balance is lower so my total financed amount is less.

 

[MerlintheMad]

I would like to know these things. All I can say is that the interest rate on your buyout needs to be considerably less than the total interest and least rent, or buyout isn't worth the bother. Whatever you can secure as interest on a loan to buyout the lease is the determining factor. A credit union is probably going to give you the lowest interest rate.

 

[Waleed]

I was looking at the Kia website and using the payment calculator to get an estimate on a Stinger GT1 lease. The one I was looking at is a 2018 Red with Red leather AWD GT1 + Kia Drive Wise package. Estimated Total was $48350
If I was to put around $2500-$3000 down for a 36 month lease with 10k miles, it is estimated to come out to a bit under $600 / month. I have never leased a vehicle before and wanted to get some opinions on it.
Thanks

 

[MerlintheMad]

Hi. There is a huge thread on leasing. Putting money down on a lease is not recommended. Better to just keep it for future use; or to help lower your loan amount if you buyout the lease with a loan. Lease then Buyout - Contract Explanation That's just the longest of many lease threads.

 

[Waynerm002]

The 2018's should have a huge discount on them now so you can get a great price off MSRP and then apply the leasing cash or use the bonus cash and low APR to do a purchase.

 

[Iceman25c]

You’re right. I mis states that. For some reason I was told I couldn’t buy it out until after I made 4 payments

My dealer initially said I needed to make three payments, but later relented and said that gets them past the time where they get their dealer incentives. There is no minimum number of payments.

 

[jmilacek]

Sorry if I missed this, but right now there is a discount of $9700 off on a TWO year lease. Is this better for buyout purposes than the $7600 off for a three year?

 

[Iceman25c]

Sorry if I missed this, but right now there is a discount of $9700 off on a TWO year lease. Is this better for buyout purposes than the $7600 off for a three year?

Yes, because you should be paying it off right away. Ideally, before the first payment.

 

[MerlintheMad]

Sorry if I missed this, but right now there is a discount of $9700 off on a TWO year lease. Is this better for buyout purposes than the $7600 off for a three year?

If you get a two year lease incentive that high, then buyout at a low interest rate on the loan to do the buyout, that does sound interesting, like an advantage. Just make sure your out the door cost doesn't go up somehow; it's tempting to look at the lease incentive then not notice how the dealer adds back in a ton of "added fees and costs that we dealers have to pay" or somesuch excuses for whittling away at the incentive until it's practically gone (I learned this).

 

[ChaosTheory]

I am trying to figure out a general buy out amount for a 2019 GT1. Using the figures below, is my approximation correct for what the buy out amount would be? This is in AZ where I have a 8.1% sales tax and tax on leases is added onto monthly payments.

2019 Stinger GT1
MSRP: $46,590
Negotiated Price: $41,000
Lease Cash: $5700

Adjusted Cost: $35,300
+Reg Fee: $95
+Title Fee: $75
+Doc Fee: $429
+Acq Fee: $650

Purchase Fee: $300


Approximate Buy Out Cost: $39,673

Does my math approximately work on for this hypothetical scenario? Also are the numbers I used realistic, I would ideally like to get a GT1 below $40k before incentives, but I don't know if that is possible.

Thank you for your help!