Balloon Financing Availability

[Indy499]

It's been pretty well established that the best deal on a Stinger is to get the Lease cash and pay the lease off immediately (or take out a loan with a lower rate than the 5.5% lease APR). I've seen that some folks have used balloon financing to get the lease cash, avoid paying the lease acquisition and purchase option fees, and avoid the title transfer.

Does anyone know what states allow balloon financing? Is it rare, or is it allowed in a majority of states? More specifically to me, is it available in Indiana?

Also, what is the APR rate for balloon finance?

 

[shaggystinger]

I am curious about the same.

 

[StingEm]

I’ve only heard about it being available in Arkansas, Oklahoma, and Texas.

There could be others but we’d need someone who has purchased on a balloon in another state to confirm.

The APR is high (~7% IIRC), but honestly who is going to hold onto it for more than a month before buying it out or refinancing it anyway?

 

[ant]

I have tried asking about balloon financing at 3 different dealerships in MA and they all say they can't do it, so I would rule out MA.

 

[Indy499]

I was told by a sales manager at a Kentucky dealer that balloon financing is not available in this region (Great Lakes region I assume).

 

[mightbestung]

Balloon financing available in both Texas and Louisiana. Had quotes from both and ended up purchasing in Houston from Demontron Kia. Great experience and highly recommend.

 

[StingEm]

Awesome! Congrats!

So now we know it’s available in: Arkansas, Louisiana, Oklahoma and Texas.

 

[Ruturaj]

I emailed one of the dealers in NC, I got this reply

There are no "balloon" notes in NC. Deem unfavorable lending by NC in the early 2000's

 

[Billy M]

What’s the difference in a ballon loan and lease?

 

[Ruturaj]

What’s the difference in a ballon loan and lease?

Please read the first post.

 

[Billy M]

Please read the first post.

Maybe we read different first posts?

 

[Indy499]

What’s the difference in a ballon loan and lease?

A balloon loan has similar structure as a lease, but it's a loan and the car is titled in your name instead of Kia Financial. You're obligated to pay the balance of the loan (i.e. the residual) after 3 years - you can't just turn the car back in. Generally a bad idea, but if you're planning too buy out the lease right away, KMF will give you the lease incentives, it saves the hassle of retitling, and you don't have to pay lease acquisition fee or buyout fee.

 

[mightbestung]

A balloon loan has similar structure as a lease, but it's a loan and the car is titled in your name instead of Kia Financial. You're obligated to pay the balance of the loan (i.e. the residual) after 3 years - you can't just turn the car back in. Generally a bad idea, but if you're planning too buy out the lease right away, KMF will give you the lease incentives, it saves the hassle of retitling, and you don't have to pay lease acquisition fee or buyout fee.

Nor do you need to send in an odometer statement or wait for Kia during a buyout of a lease which some have had problems with. If you plan on doing a buyout to take advantage of the lease money then the ballon financing is the way to go. Once your account goes live on Kia finance website, request a payoff and send in a check. That’s what I did. Easy money.

 

[Ruturaj]

Maybe we read different first posts?

Everything in here was in the context of getting a lease just to get incentives then buyout the car. So the first post had benfits summerized

"I've seen that some folks have used balloon financing to get the lease cash, avoid paying the lease acquisition and purchase option fees, and avoid the title transfer."

If we are just comparing lease which is not intended for immediate buyout and balloon financing then the lease is better.

 

[Billy M]

Thank you all

A balloon loan has similar structure as a lease, but it's a loan and the car is titled in your name instead of Kia Financial. You're obligated to pay the balance of the loan (i.e. the residual) after 3 years - you can't just turn the car back in. Generally a bad idea, but if you're planning too buy out the lease right away, KMF will give you the lease incentives, it saves the hassle of retitling, and you don't have to pay lease acquisition fee or buyout fee.

Nor do you need to send in an odometer statement or wait for Kia during a buyout of a lease which some have had problems with. If you plan on doing a buyout to take advantage of the lease money then the ballon financing is the way to go. Once your account goes live on Kia finance website, request a payoff and send in a check. That’s what I did. Easy money.

Everything in here was in the context of getting a lease just to get incentives then buyout the car. So the first post had benfits summerized

"I've seen that some folks have used balloon financing to get the lease cash, avoid paying the lease acquisition and purchase option fees, and avoid the title transfer."

If we are just comparing lease which is not intended for immediate buyout and balloon financing then the lease is better.

 

[washguy]

Balloon financing available in both Texas and Louisiana. Had quotes from both and ended up purchasing in Houston from Demontron Kia. Great experience and highly recommend.

Hi Yall just got back from the Kia dealership where we test drove a Stinger gt2 ...WOW nice ride...of course it started raining as we pulled off the parking lot...sheesh....so I had a number in my mind after spending hours on this great forum...Thanks for the awesome info here....Okay so this old phart here hasn't ever messed with balloon payments and refies...so help me out...lol.....the car is a gt2 msrp over 50k of course....he asked me what I what number I had in mind ...I said the number is 40k plus ttl....sales manger sez yep we can do that number if you do a Kia balloon finance....say what?...lol he said do the deal at 40 plus ttl and then go refinance in 90 days before I ever make a car payment...with my credit score should be a lil over 3% at any credit union......he sez Kia allows 7600 discount on balloon and they will add to that to get me out at 40k...is this a deal and is it easy to refinance? ive never done this before.....regards Wash

 

[Ruturaj]

Hi Yall just got back from the Kia dealership where we test drove a Stinger gt2 ...WOW nice ride...of course it started raining as we pulled off the parking lot...sheesh....so I had a number in my mind after spending hours on this great forum...Thanks for the awesome info here....Okay so this old phart here hasn't ever messed with balloon payments and refies...so help me out...lol.....the car is a gt2 msrp over 50k of course....he asked me what I what number I had in mind ...I said the number is 40k plus ttl....sales manger sez yep we can do that number if you do a Kia balloon finance....say what?...lol he said do the deal at 40 plus ttl and then go refinance in 90 days before I ever make a car payment...with my credit score should be a lil over 3% at any credit union......he sez Kia allows 7600 discount on balloon and they will add to that to get me out at 40k...is this a deal and is it easy to refinance? ive never done this before.....regards Wash

I assume you are talking about RWD. Basically, they are giving you car at $47600 before incentives. So $2500 (50100 - 47600) is the dealer discount you are getting which is 5%. IMO that's low considering 2019 are about to come out. If you negotiate better you can go even low.

 

[washguy]

Yep rear wheel drive.....hmmmmm there wasn't a sticker on the showroom car....told him I would need to see it...but he didn't produce it....you are right...I left money on the table.....thought salesman and manager said the car was 52 ? Wash

 

[Ruturaj]

Yep rear wheel drive.....hmmmmm there wasn't a sticker on the showroom car....told him I would need to see it...but he didn't produce it....you are right...I left money on the table.....thought salesman and manager said the car was 52 ? Wash

With dealer installed overpriced junk mostly.

 

[Waynerm002]

GT2 AWD has $7900 in lease cash, and a lower money factor on the lease plus you should be able to get around 10% off MSRP, $52,300 or so. If you can get $46-47K on that, then apply the lease cash, then do the buyout. Assuming you haven’t signed any papers yet ask for a lower price and see if they will do it. Never hurts to ask.