Lease then Buyout - Contract Explanation

[sym]

Dang, yours is confusing. You may need to call your DMV and ask...which is likely to be an even more excruciating call than KMF...lol.

Your state is either BS, or your dealer may have messed up on paperwork.

If your agreed price was 49763 and you put down 2300 something is off. Most of the math lines up, but there seems to be a miss.

It should have been something like this...roughly...I'm on a phone so excuse the crude layout.

49763 agreed purchase price
-6500 lease cash
+1688 tax
+650 acquisition
+150 dealer crap
+16 license
= 45767 (buyout price/capitalized)
-27825 residual value
=17942 (amount you owe over 36 mos)
+6782 rent charge (paid over 36 mos)
=24874...and here comes the miss maybe, but it only matters for the monthly pmt
-1688 (part of the 2300 you paid up front, but I dont see it was subtracted out.)
=23036/36 = 639.88 (what your payment should have been)

The 1st pmt is moot in the above math. It just means your buyout was 498 less right away. It looks like you paid tax up front and you're paying it again within your monthly payment. With that said, the 45767 buyout is correct though. Think of it this way. The money you put down, beyond first payment, goes against the difference of (capitalized minus residual plus rent), so tax is the same as the acquisition fee really. It's all just going in the bucket of what you owe, and all it does is reduce your monthly lease pmt. Hopefully you can avoid paying tax on the 45767, but it is the correct initial buyout cost. If you can go through Indiana you should only have to pay tax on the residual of 27825.

If you do keep the lease it looks like you may need to buckle in for an argument to get your payments reduced UNLESS you're actually gaining more than 498 each month vs. the buyout, but that would be odd.

Good luck!

Zac, thank you for the assist. This stuff is highly confusing and I truly appreciate someone checking my sanity.

I think we're on the same page. Either I shouldn't have paid the tax out of pocket up front or the tax shouldn't be included in the calculation you used for the buyout price / capitalized cost (as it was already paid). If I remove the tax from the capitalized cost itemization I end up with the same number as you for the monthly payment in my spreadsheet. Either way, I owed $1700 in taxes whether it was paid during the buyout or up front. Do we still agree?



I'm still waiting from the paperwork from KMF with a detailed breakdown. Once that's done I'll see what I can do about the Ohio sales tax situation (My sales tax should be ~$50500 * 0.08 - ~$1700).

Thank you again!

 

[CJ21]

Checking in,

Paid off my lease (buyout offer) a week ago today. Check was cashed.

Not getting clear answers from KMF yet. A bit of run around on when they send title.

Staying patient, but not amused. Shouldn’t be hard.

 

[Zac]

Zac, thank you for the assist. This stuff is highly confusing and I truly appreciate someone checking my sanity.

I think we're on the same page. Either I shouldn't have paid the tax out of pocket up front or the tax shouldn't be included in the calculation you used for the buyout price / capitalized cost (as it was already paid). If I remove the tax from the capitalized cost itemization I end up with the same number as you for the monthly payment in my spreadsheet. Either way, I owed $1700 in taxes whether it was paid during the buyout or up front. Do we still agree?

View attachment 8692

I'm still waiting from the paperwork from KMF with a detailed breakdown. Once that's done I'll see what I can do about the Ohio sales tax situation (My sales tax should be ~$50500 * 0.08 - ~$1700).

Thank you again!

Glad to help.

What you show is close. I think the 45767 is correct as it was for the buyout though. The mistake was with your monthly payment calculation only.

639 is what I think your payment should have been. If your payment is 689, then someone owes you 1688 as a refund, unless your state taxes the lease in full AND they tax the payment too...which would suck.

The 45767 would remain the same in any scenario. Think of KMF/dealer as one big money collection bucket, so yes tax was part of it, but basically Kia paid it to the state for you up front, so you'd still need to pay them back for it...hence it would need to be part of your monthly payments. 1688 of the 2300 you put down would then only go against reducing the 17.9k original depreciation figure. Another way to look at it is to imagine you put zero money down. 45767 still stays the same, but then your pmt of 689 would be correct because you wouldn't have had the 1688 down to reduce the pmt.

Oh the fun with numbers!

Hope that helps.

 

[Zac]

Checking in,

Paid off my lease (buyout offer) a week ago today. Check was cashed.

Not getting clear answers from KMF yet. A bit of run around on when they send title.

Staying patient, but not amused. Shouldn’t be hard.

I overnighted my buyout yesterday since my state blows and titles are 45 days behind. I wish both of us luck!

 

[Original Poster]

Checking in,

Paid off my lease (buyout offer) a week ago today. Check was cashed.

Not getting clear answers from KMF yet. A bit of run around on when they send title.

Staying patient, but not amused. Shouldn’t be hard.

Take names and IDs when you talk to people. I was told they had my odometer form and my title would go out by June 16th, then two days later received an odometer form to fill out and return in the mail. I filled it out and sent it back along with a copy of the original odometer form I sent. If I don't see my title by the end of next week I will call back, ask to talk to a supervisor and let them know if I don't see my title by the end of the following week I will be filing a complaint with the Washington AG (who loves to fine companies for systematic incompetence.) I have 3 other people in Washington ready to do the same (including the person who said they would in this thread.)

 

[CJ21]

Also had the odometer chat today. Instructions were to send with the check. Nice fellow told me odometer should have been sent separately. I told him they needed to step up and get me the title as the quickly cashed my check.

I was told today the title dept at kmf would send me a document showing release of lien...in the mail. No more mention of the odometer. Strange days, my friends.

I’ve talked to 3 different people and received 3 completely different responses. I’ll wait until Wednesday, will call again, and will ask for my title, or money be returned.

You would think that the title payoff dept would have the ability to issue a lien free title immediately after payment. It can’t be a new thing.

 

[Mach_Tuck]

Also had the odometer chat today. Instructions were to send with the check. Nice fellow told me odometer should have been sent separately. I told him they needed to step up and get me the title as the quickly cashed my check.

I was told today the title dept at kmf would send me a document showing release of lien...in the mail. No more mention of the odometer. Strange days, my friends.

I’ve talked to 3 different people and received 3 completely different responses. I’ll wait until Wednesday, will call again, and will ask for my title, or money be returned.

You would think that the title payoff dept would have the ability to issue a lien free title immediately after payment. It can’t be a new thing.

Just an FYI...my title release took approx 50 days and 5 odometer disclosures AFTER the initial one sent with the buyout amount...which they cashed within 2 days.

Just keep on them is all i can say.

@sym - I agree with what Zac is saying. You owe the tax one way or the other. When/how you pay it is where the variance comes into play. IF you paid the sales tax up front, it should not have also been included in your monthly payment amount. Is there any info on Section 6A(7) on the Lease Agreement? What about Line 7(J) (i think, my photo is difficult to read, either 7(j) or 7(k)) that shows the tax as part of the monthly amount? Id be surprised if both are populated.

 

[sym]

Just an FYI...my title release took approx 50 days and 5 odometer disclosures AFTER the initial one sent with the buyout amount...which they cashed within 2 days.

Just keep on them is all i can say.

@sym - I agree with what Zac is saying. You owe the tax one way or the other. When/how you pay it is where the variance comes into play. IF you paid the sales tax up front, it should not have also been included in your monthly payment amount. Is there any info on Section 6A(7) on the Lease Agreement? What about Line 7(J) (i think, my photo is difficult to read, either 7(j) or 7(k)) that shows the tax as part of the monthly amount? Id be surprised if both are populated.

Interesting point actually. Both 6A(7) (sales / use tax due at lease signing) and 7(J) are marked as N/A. Would this point to the dealer having mistakenly collected sales tax? Or the lease being wrong, and the tax should have been marked in 6A(7) as $1688 as due at signing, collected, and thus should not have been present in the gross capitalized cost?

Still waiting for the paperwork from KMF.

 

[Mach_Tuck]

Interesting point actually. Both 6A(7) (sales / use tax due at lease signing) and 7(J) are marked as N/A. Would this point to the dealer having mistakenly collected sales tax? Or the lease being wrong, and the tax should have been marked in 6A(7) as $1688 as due at signing, collected, and thus should not have been present in the gross capitalized cost?

Still waiting for the paperwork from KMF.

Hmmm, you basically gave the dealer money that wasnt listed on the lease agreement?? Not sure how you prove what the $1688 as this point? For me, 6A2 showed the tax i owed on the lease cash (yes AZ taxes this or my dealer did) and then the monthly tax amount on 7J (AZ taxes monthly payment). I chose to "pay" the tax on the lease cash WITH the lease cash so that i did not have any money out of pocket.

I then turned around and bought out the lease knowing i would owe the sale tax on the adjusted lease balance.

 

[Zac]

Hmmm, you basically gave the dealer money that wasnt listed on the lease agreement?? Not sure how you prove what the $1688 as this point? For me, 6A2 showed the tax i owed on the lease cash (yes AZ taxes this or my dealer did) and then the monthly tax amount on 7J (AZ taxes monthly payment). I chose to "pay" the tax on the lease cash WITH the lease cash so that i did not have any money out of pocket.

I then turned around and bought out the lease knowing i would owe the sale tax on the adjusted lease balance.

The plot thickens. My lease doc showed the same as Machs did. I hope my buyout goes smoother, but I'm already buckled in for the $hit show.

Interesting point actually. Both 6A(7) (sales / use tax due at lease signing) and 7(J) are marked as N/A. Would this point to the dealer having mistakenly collected sales tax? Or the lease being wrong, and the tax should have been marked in 6A(7) as $1688 as due at signing, collected, and thus should not have been present in the gross capitalized cost?

Still waiting for the paperwork from KMF.

The paperwork from Kia is exactly the same as your yellow lease doc, but it won't be legible bc they copy it on an 8.5x11 sheet of paper...lol. At least that's what they sent me.

Have you gone back to the dealer? Walk in and tell them you need to talk to the finance mgr. They are the source of the confusion, so make them earn a few bucks and explain your doc vs. what Mach n I said vs. what you paid vs. your pmt. That's a lot of versus, so hopefully my crazy run on sentence made some sense.

Cheers, its Friday!

 

[Mach_Tuck]

Agreed, prob need to take this up with finance manager of where you paid. That lease doc details everything down to the last penny.

I hope you at least got a receipt for that payment of $1688.

FWIW, the finance dudes at my dealer were pretty much clueless as they dont often lease many cars they said. Had to print the lease doc almost 7 times because they kept screwing it up.

In the end, however, it was worth the almost $7k in savings.

Side note...your doc fees and license fees are making me sick. Mine were $499 and $899 respectively

Best of luck!

 

[Zac]

In the end, however, it was worth the almost $7k in savings.

Side note...your doc fees and license fees are making me sick. Mine were $499 and $899 respectively

Best of luck!

Couldn't agree more with some hassle being worth a 5-7k savings after fees. And, your doc fees are disgusting...mine were $100 flat, and I still pissed and moaned. LMAO, shame on me!

 

[Job314]

Finally got my title in hand today. It's been a long process, but it did work. Also confirmed no double taxation in Texas, however in my case I did not get financed with another loan. I believe that was probably the reason for no double taxation. I was definitely hesitant about doing the lease then buyout, but the clause in the contract is clear. I was worried about double taxation, but it ended up not happening. Overall, it was a bit of work/stress during the process and it took a LONG time, but it was worthwhile for that lease cash.

 

[robz32]

Glad to hear about the no double tax for Texas residents, will be taking upon this task in a few months.

 

[Original Poster]

Take names and IDs when you talk to people. I was told they had my odometer form and my title would go out by June 16th, then two days later received an odometer form to fill out and return in the mail. I filled it out and sent it back along with a copy of the original odometer form I sent. If I don't see my title by the end of next week I will call back, ask to talk to a supervisor and let them know if I don't see my title by the end of the following week I will be filing a complaint with the Washington AG (who loves to fine companies for systematic incompetence.) I have 3 other people in Washington ready to do the same (including the person who said they would in this thread.)

So I was a little slow calling them back. I didn't call them back until July 5th. Upon calling them back they said they didn't have my Odometer statement. I told them I would fax it to them and if I didn't have my title and a proper bill of sale in 10 business days I would be filing a complaint with the state AG. Received my title and a bill of sale that properly lists sales tax today, 7 business days after faxing the Odometer Statement and 47 actual days after they cashed the check paying off the lease.

 

[MerlintheMad]

My title was in the mail when I got back from my week long road trip; exactly like they said it would be. The entire process of buyout was painless.

 

[CJ21]

Wish I had positive news.

-Sent the Odometer statement with the check and a kind memo.
-Spoke to 3 different people with 3 different stories about providing me the title. Second one had me fax in a new Odometer statement...done. Last one said a "letter of no interest" would come in a few days...that was 3 weeks ago, no letter.
-4th time, asked for the escalation team.
F-irst chap said he would expedite the aforementioned letter. Never came in two weeks.
-Called last week and told a nice gal she could either send my money back with interest, or send me the title as I bought the Stinger weeks ago. She told me...WAIT FOR IT...they didn't have my odometer statement. I blew a turbo, then asked for her direct fax, and faxed the 3rd odometer statement. I did receive a confirmation that this was received, but bet it'll take another few months and they are awful.

Am I worried - no.
Am I frustrated - a little.
Am I embarrassed - Very much for KIA.

Love the car!

 

[MerlintheMad]

@CJ21: It's so hard to find good help these days. Incompetents, fools and morons on our team. You seem to have met them all. And I escaped them all. I did get the person on the phone saying that they needed the odometer statement (that I had sent in); and I insisted it was with the cheque, and she double-checked something and said, "Oh, here it is", or summat like that (I have no idea why this odometer requirement is such a problem for them at their end). I was prepared to email a scan of the odometer pic I had taken, etc. Right then, directly to her. Didn't have to, though.

 

[CJ21]

@CJ21: It's so hard to find good help these days. Incompetents, fools and morons on our team. You seem to have met them all. And I escaped them all. I did get the person on the phone saying that they needed the odometer statement (that I had sent in); and I insisted it was with the cheque, and she double-checked something and said, "Oh, here it is", or summat like that (I have no idea why this odometer requirement is such a problem for them at their end). I was prepared to email a scan of the odometer pic I had taken, etc. Right then, directly to her. Didn't have to, though.

I had the same thing happen - then the original OS must have just disappeared. This too, shall pass.

 

[CJ21]

Holy Smokes!

My title arrived today from Kia. Bit of a challenge to my patience, but it worked out in the end.

Crazy lease deal worked!