Lease Questions

[zoop]

Ive never leased a car before but I saw this article:

https://jalopnik.com/kia-is-offering-up-to-6-800-off-the-sticker-price-if-y-1820848361

Seems KIA is going to be offering $6800 lease cash to GT2 lessees.

Now tell me if I am understanding this correctly. Let's say the "purchase" price of the GT2 is negotiated to $49k for the RWD. The residual lets say is set at $25k for a 36 month lease. Interest rate of around 2.9% (0.0012 MF).

If they are offering $6800 lease cash doesnt that basically mean that the "purchase" price of the car is $42200 ($49k-6800) and over the 36 month term of the lease essentially you will be paying $42200-$25000 = $17200/36 = $478/mo + interest for the lease assuming no trade in? Doesnt it also mean that you can buy the car at the end of the lease for $25k so you essentially got a $6800 discount on the car if you were planning on buying?

 

[FluffyBottoms]

Is the GT2 lease deal still available? Just checked the Kia site, and there's no mention of it - only for the base model. I could've sworn I saw it there yesterday, but I'm not sure.

https://www.kia.com/us/en/offers/2018/10001?series=stinger&offers=3,2,1,4

 

[seanmccubb]

Yeah, I don't see it on the offers list but it's still there when you build the car and look under "calculate my payment".

I'm looking at a lease too and still trying to do the math...
But one example is with a loan for 60 months @ 0.9% on $49k you are only paying $1,129 in interest.
I'm not sure if it works the same on a lease but 36 months @ 2.9% on $42,200 you are paying $1,913 in interest. but you also have to factor in sales tax and that varies by state, lease fees, and GAP premiums. (it looks like KMF is including GAP in their lease price) So yeah it looks like you're almost getting a discount when you lease it and then decide to buy it later on after the 36 months.

So with a lease even with a bigger APR you are only paying about $800 more over 36 months, so the lease cash is a much better option. I think Kia knows what they're doing and are trying to draw BMW and Audi leasees in with the cash. It's a great idea!

Check out this thread for more info! https://stingerforum.org/threads/kia-stinger-introductory-lease-deal.1154/

 

[SteveMcD]

The lease on this is AMAZING!. It's a good offer till 1/2/2018

 

[hej]

Ive never leased a car before but I saw this article:

https://jalopnik.com/kia-is-offering-up-to-6-800-off-the-sticker-price-if-y-1820848361

Seems KIA is going to be offering $6800 lease cash to GT2 lessees.

Now tell me if I am understanding this correctly. Let's say the "purchase" price of the GT2 is negotiated to $49k for the RWD. The residual lets say is set at $25k for a 36 month lease. Interest rate of around 2.9% (0.0012 MF).

If they are offering $6800 lease cash doesnt that basically mean that the "purchase" price of the car is $42200 ($49k-6800) and over the 36 month term of the lease essentially you will be paying $42200-$25000 = $17200/36 = $478/mo + interest for the lease assuming no trade in? Doesnt it also mean that you can buy the car at the end of the lease for $25k so you essentially got a $6800 discount on the car if you were planning on buying?

Your logic is sound to me. With the residual value presumably being unaffected, that $6,800 should in theory be coming right off the top of what you're paying to cover the depreciated amount.

 

[ralzod]

The lease on this is AMAZING!. It's a good offer till 1/2/2018

I'm pretty sure the lease terms don't guarantee the capitalized cost...you'd still have to factor in any dealer markup to calculate the actual monthly payments. I don't know how that would affect residual, though. Since they list it in percentages, is it based on MSRP or cap cost?

 

[jwhollan]

I also have a couple lease questions since you brought it up. I've also never leased before.

1) If I go into the lease with the expectation that I'm going to buy it at lease end, can I go over the mileage allowance without having to worry about being charged for the extra miles later? Or do they charge you for them no matter, what, even if your just going to keep the car.

2) Similar to above, am I safe to make alterations to the car (window tint, new emblems, intake/exhaust, etc) if I have the expectation of keeping it after lease end? Or will they charge me fees for any of that stuff as well?

I know that even if they do't charge me for the above stuff, I'm taking a risk that maybe I wont want to purchase the car at the end of the 36 months, I'm more interested in what will happen if I do want to keep the car.

 

[BarryLI]

The lease on this is AMAZING!. It's a good offer till 1/2/2018

A good lease offer doesn't have much significance if there are no cars to lease, you can be death and taxes certain those terms get extended upon expiration.

 

[BarryLI]

I also have a couple lease questions since you brought it up. I've also never leased before.

1) If I go into the lease with the expectation that I'm going to buy it at lease end, can I go over the mileage allowance without having to worry about being charged for the extra miles later? Or do they charge you for them no matter, what, even if your just going to keep the car.

2) Similar to above, am I safe to make alterations to the car (window tint, new emblems, intake/exhaust, etc) if I have the expectation of keeping it after lease end? Or will they charge me fees for any of that stuff as well?

I know that even if they do't charge me for the above stuff, I'm taking a risk that maybe I wont want to purchase the car at the end of the 36 months, I'm more interested in what will happen if I do want to keep the car.

As to 1 the reason they charge you extra if you go over miles is the depreciation is higher than you paid for, if you buy it why would they have a reason to charge you as the car is already sold. For 2 you're really not supposed to alter the car while the bank owns it but once again you're buying it so they wouldn't care.

 

[victoryimminent]

Now tell me if I am understanding this correctly. Let's say the "purchase" price of the GT2 is negotiated to $49k for the RWD. The residual lets say is set at $25k for a 36 month lease. Interest rate of around 2.9% (0.0012 MF).

If they are offering $6800 lease cash doesnt that basically mean that the "purchase" price of the car is $42200 ($49k-6800) and over the 36 month term of the lease essentially you will be paying $42200-$25000 = $17200/36 = $478/mo + interest for the lease assuming no trade in? Doesnt it also mean that you can buy the car at the end of the lease for $25k so you essentially got a $6800 discount on the car if you were planning on buying?

I've been under the impression that both the residual and MF are unable to be changed. As posted in another thread, the residual and MF are 53% and 0.00181 for T1-T3 credit. The lease cash is actually only $6,100 for a RWD GT2. The 6,800 is for the AWD GT2.

Obtaining the $6,100 manufacturer lease cash, assuming some other numbers, you would be looking at:

Year, Make, Model, and Trim: 2018 Kia Stinger GT2 RWD
MSRP: $49,200
Selling Price: $49,200
Rebates: $6,100 Kia Lease Cash
Trade-in: $0
Acquisition Fee (rolled into payments): $400
Document Fee (rolled into payments): $80
License/Registration Fee (rolled into payments): $400

Months: 36
Annual Mileage: 10,000

MF: 0.00181
Residual: $26,076(53%)

Security Deposit: $0
Monthly Payment (exclude tax): $610

If we, as an example, use 9% tax - in a state that only the total lease cost is taxed
Sales Tax Rate: 9.0%
Monthly Payment (inc. tax): $665

Leasehackr Score: 6.6
Total Lease Cost: $24,371

 

[Chris]

I've been under the impression that both the residual and MF are unable to be changed.

I'm not sure about the stinger, but I got a better MF than they originally quoted when I leased my Optima.

 

[victoryimminent]

I'm not sure about the stinger, but I got a better MF than they originally quoted when I leased my Optima.

Interesting. You may have been quoted a MF from a lower credit tier, then when you applied for credit you were 'bumped up' to a higher tier and thus got a better rate. Generally the only way you can reduce MF is through multiple security deposits (MSDs). Unfortunately, Kia doesn't offer MSDs.

 

[Chris]

Interesting. You may have been quoted a MF from a lower credit tier, then when you applied for credit you were 'bumped up' to a higher tier and thus got a better rate. Generally the only way you can reduce MF is through multiple security deposits (MSDs). Unfortunately, Kia doesn't offer MSDs.

No, I was just an ass, and told them if they wanted to sell me the car this is what I would pay. To give you an idea, from the time I first talked to the dealer, to when I got the car was just over 1 year. The last few days were some pretty intense negotiations..

 

[Jayce]

I also have a couple lease questions since you brought it up. I've also never leased before.

1) If I go into the lease with the expectation that I'm going to buy it at lease end, can I go over the mileage allowance without having to worry about being charged for the extra miles later? Or do they charge you for them no matter, what, even if your just going to keep the car.

2) Similar to above, am I safe to make alterations to the car (window tint, new emblems, intake/exhaust, etc) if I have the expectation of keeping it after lease end? Or will they charge me fees for any of that stuff as well?

I know that even if they do't charge me for the above stuff, I'm taking a risk that maybe I wont want to purchase the car at the end of the 36 months, I'm more interested in what will happen if I do want to keep the car.

If you want to keep the car, none of that matters. You just write them a check for the residual and you're good to go.

A good lease offer doesn't have much significance if there are no cars to lease, you can be death and taxes certain those terms get extended upon expiration.

This. They'll extend this, and who knows later down the road if they're not selling well, they might increase it. They give like 10k on the Cadenza.

I'm not sure about the stinger, but I got a better MF than they originally quoted when I leased my Optima.

Interesting. You may have been quoted a MF from a lower credit tier, then when you applied for credit you were 'bumped up' to a higher tier and thus got a better rate. Generally the only way you can reduce MF is through multiple security deposits (MSDs). Unfortunately, Kia doesn't offer MSDs.

To both of these last two quotes. From what I understand, there is definitely a minimum MF that they can offer you and they can't go below this. However, they can charge a higher MF if they wish, and will do this in order to maximize profit. It's not uncommon. That's why it is best to know what the numbers are for your area. The guys at the Edmunds forum often have inside access to these numbers and give them out to people who ask. That way you can know if the dealership is trying to get one over on you. There have been plenty of instances that I've seen where people have gotten the dealership to improve the offer. So yes, MF can change but only to an extent and if they're upcharging you. Residual cannot change though.

 

[damtachoa]

I've been under the impression that both the residual and MF are unable to be changed. As posted in another thread, the residual and MF are 53% and 0.00181 for T1-T3 credit. The lease cash is actually only $6,100 for a RWD GT2. The 6,800 is for the AWD GT2.

Obtaining the $6,100 manufacturer lease cash, assuming some other numbers, you would be looking at:

Year, Make, Model, and Trim: 2018 Kia Stinger GT2 RWD
MSRP: $49,200
Selling Price: $49,200
Rebates: $6,100 Kia Lease Cash
Trade-in: $0
Acquisition Fee (rolled into payments): $400
Document Fee (rolled into payments): $80
License/Registration Fee (rolled into payments): $400

Months: 36
Annual Mileage: 10,000

MF: 0.00181
Residual: $26,076(53%)

Security Deposit: $0
Monthly Payment (exclude tax): $610

If we, as an example, use 9% tax - in a state that only the total lease cost is taxed
Sales Tax Rate: 9.0%
Monthly Payment (inc. tax): $665

Leasehackr Score: 6.6
Total Lease Cost: $24,371

I rather buy the car instead of leasing.

 

[Chris]

I rather buy the car instead of leasing.

If you do that right now you are overpaying. The are only offering the money now as lease cash. If you buy a top of the line car you are paying 6800 more than everyone leasing it. Seems dumb to eat 6800 bucks...

 

[Kia Stinger]

I rather buy the car instead of leasing.

You can always buy it after the lease is up...

 

[victoryimminent]

To both of these last two quotes. From what I understand, there is definitely a minimum MF that they can offer you and they can't go below this. However, they can charge a higher MF if they wish, and will do this in order to maximize profit. It's not uncommon. That's why it is best to know what the numbers are for your area. The guys at the Edmunds forum often have inside access to these numbers and give them out to people who ask. That way you can know if the dealership is trying to get one over on you. There have been plenty of instances that I've seen where people have gotten the dealership to improve the offer. So yes, MF can change but only to an extent and if they're upcharging you. Residual cannot change though.

Fair enough with your points above. I've done my research through Edmunds in the past as well, but unfortunately there isn't a Kia Stinger thread set up yet. Hopefully once that takes place we can see the 'real' money factors. Until then, though, I think we have to the document posted below as fact.

 

[Jayce]

Fair enough with your points above. I've done my research through Edmunds in the past as well, but unfortunately there isn't a Kia Stinger thread set up yet. Hopefully once that takes place we can see the 'real' money factors. Until then, though, I think we have to the document posted below as fact.

Yeah, I believe these are the numbers that Edmunds would have access to. Kia probably just keep them under lock and key like some manufacturers. I doubt we see anything lower than this for a while.

 

[John1956]

I think this is the error in the calculations:

The interest is charged not only on the amount you are paying off (the capitalized cost less the residual), but also on the residual itself. That is, you do not have to pay off the residual, but you do have to pay interest on it. A .00181 money factor is about 4.3% apr. So 25,000 residual times 4.3% per year times 3 years is $3,225. Spread over 36 months, this is $269 additional per month.