Lease then Buyout - Contract Explanation

[Paul32]

You got a shady dealer...bottom line.

There is no difference in price when comes to lease vs buy. Any A-Hole that says different is just plain ignorant. Find another dealer.

Negotiate Purchase Price is same whether lease or buy. Incentives or rebates may vary but not purchase price

When I negotiate a purchase price it includes all discounts and rebates plus dealer fee's, tax, tag, etc. Something was strange about your dealer because the lease price should have been less than the purchase price.

 

[niko]

Hey Niko, how long have you had the car? They just called and said, hey, want to buy out the lease that we already gave you so much in rebates on'? Sounds interesting.

i got the car may 18 so a little over 3 months. yea no bullshit they said u are eligible to buy out the lease, then whats good about it u won't be charge any rent fees at the end, if theres any damage fees, then they said later down the row when like the 2020 or 2021 comes out it be a lot easier for u to trade ur car in since the principal is lower. i was at work so i was like ok just give me a call on Saturday ill see if i can come down then.

 

[niko]

No harm in seeing what they will offer you as far as rates go. Compare it to what your credit union is offering and go from there.

thanks for the feedback yeah i think I'm going go in and see what they can offer they gave me a good deal on the lease might give me a good deal on financing it.

if they can beat the interest rate then go with them. make sure they are allowing the buyout in accordance with the lease contract and not hiding some added fees or god knows what in there! Buyout amount should match what is shown on the KMF Account page

thanks a lot good advice i know how some dealership people get. the saleman who sold me my car told me one price but the lady who wrote the contract marked it up $500 so i went back the following day and got it fixed.

 

[Banana_Thunder]

This is what I’d like to do. Interested to hear how it goes for you

Things got interesting today. After more calling around, I found a dealer offering a GT2 for $43,290 purchase (not lease) with all rebates included.
2 caveats: The first is I do not qualify for military, so add $500 back to the price. Ok, its $43,790.
The second is that it is using standard simple financing at 6.9% APR. They only ask that you wait 3 months to refinance.

 

[Waynerm002]

Some places are open and honest, some places want to shake you down. That's the way the industry works. Most places are advertising the sale price including the finance incentives as a lot of folks shopping KIA are finance buyers and are not leasing. If you look up the invoice price online you will see that these cars don't have a ton of profit built in however, the big shops can sell at a larger discount if they really want to move product to get a bonus if being offered for selling a number of vehicles per month. Forum members here have gotten up to 10% discount then applied the lease cash for an even better deal. Getting that 10% plus finance cash and .9% financing is also not bad as not many other banks/credit unions are going to give you .9%.

Don't get caught up in the lease thing and get confused, you shouldn't be concerned about the payment, your focus should be on the total price out the door with lease rebate, taxes and fees included. That's the number your refinancing will be based on (minus a payment or 2 until you finalize things). You still want to know the selling price before the rebate as the lower that is, the lower the final number will be. Good luck with the shopping!

 

[Waynerm002]

Things got interesting today. After more calling around, I found a dealer offering a GT2 for $43,290 purchase (not lease) with all rebates included.
2 caveats: The first is I do not qualify for military, so add $500 back to the price. Ok, its $43,790.
The second is that it is using standard simple financing at 6.9% APR. They only ask that you wait 3 months to refinance.

Why 6.9? Are you going to the 75 month payment plan? it's 0.9% for 60 months with good credit (KIA specifies 720 beacon/FICO score or better), the longer you go the higher the interest rate. That price however, seems to be before taxes and fees, if so, why not the .9% financing?

 

[GronkSoyFiesta]

Things got interesting today. After more calling around, I found a dealer offering a GT2 for $43,290 purchase (not lease) with all rebates included.
2 caveats: The first is I do not qualify for military, so add $500 back to the price. Ok, its $43,790.
The second is that it is using standard simple financing at 6.9% APR. They only ask that you wait 3 months to refinance.

What city are you in? Is this AWD? Thanks

 

[Banana_Thunder]

Why 6.9? Are you going to the 75 month payment plan? it's 0.9% for 60 months with good credit (KIA specifies 720 beacon/FICO score or better), the longer you go the higher the interest rate. That price however, seems to be before taxes and fees, if so, why not the .9% financing?

0.9% gets me a price of 47,000. 6.9 saves me 3,210 minus the inflated cost of 3 payments, after which I should qualify for a 2.99% loan. The 0.9% option ends up costing $48,298 after 72 months, the 2.99% ends up around $47,199 after 60 months. Whether the opportunity cost of that money or the possibility of financing 2.99 over 72 months is worth it is a question up in the air. (simplified math used)

 

[Mach_Tuck]

Purchase price 43,290...

If this is true...agree to that price, then tell them you want to lease it to take advantage of the lease cash, then turn around and buyout via a private financing and you will have purchased the car for mid 30s plus tax and fees. I would be all over that deal!!!

I would be hesitant to sign a purchase with 6.9% as you may not be able to qualify for something better down the road. Obviously this is a general statement but many things could happen in a three month window that could significantly alter one's financial position.

Id take their lowest purchase price and then hit them with the lease option. Secure separate financing and buy it out before the first payment. Now you are driving a 50K car for low 40s out the door!

 

[Akriant]

Got the car yesterday. Dealership tried to sell me a car with 1500 miles as new......rofl.
Ended up getting one with 19 miles and no remote ignition ( I can live without one) at a reasonable price. Secured rate with my credit union. Waiting for Kia Motors to poste and then buyout.

 

[Banana_Thunder]

Good luck to ya!!! Let us know how it went

Ended up just going simple financing. 48k out the door, taxes included along with remote start. I am now the proud owner of a HiChroma Red Stinger GT2. Judging by how I slept last night, it was a good decision, but I think this is my last toy for 2018! Beauty shots to follow soon.

Edit - I was focused on before tax price, which I see is a bit too simple. I do not qualify for the military rebate or loyalty rebate, and after learning what I did qualify for made me feel better.

 

[Waynerm002]

Based on the number of queries and explanations given on the lease buyout, it seems a lot of folks don’t understand how this works. I’ll say this, if you are happy with your price and type of financing, go for what makes you feel comfortable. Not everyone is going to feel the same about the buyout option, keep in mind, it is an option, if you choose to go that route. Sometimes it might feel strange to get financing when you get the car and then go and get more financing later. The key to remember is the dealer is more than likely going to bump your finance rate to make a profit, that’s part of how they make money. If you are not savvy on the financing process and your credit score isn’t where it needs to be for the best rate or even if it is, it can happen. The interest is paid over time so if you get new financing, the interest isn’t rolled from the old payment into the new. The new financing is based on the amount you owe at that time without any future payment of the current interest. By securing a lower interest rate you will save money over the payment period, in addition, if you pay the loan off early, you also save a bit.

KIA is giving a huge lease rebate and the dealer is discounting these cars to move them. They might not all be doing this now but when the 2019 start showing up, they will want to dump the 2018s to get them off their books. Good luck everyone! May you score a great deal on your Stinger!

 

[NovaKane]

long time lurker first time poster...I have been going back and forth on getting a base or GT for a few weeks and finally put a deposit down to lease a GT with safety package for about 35k (1600 due at signing) after discounts/rebate. Does this seem like a good deal? I hope to do the lease buyout a month or so after doing the final paperwork next weekend.

 

[MerlintheMad]

long time lurker first time poster...I have been going back and forth on getting a base or GT for a few weeks and finally put a deposit down to lease a GT with safety package for about 35k (1600 due at signing) after discounts/rebate. Does this seem like a good deal? I hope to do the lease buyout a month or so after doing the final paperwork next weekend.

That price looks acceptably low to me for a GT. I've seen better deals on this forum, but why try to set some kind of record for a killer deal? You've got your car now instead of beating somebody else's deal later. One is Joy, the other is an ego trip.

 

[Banana_Thunder]

Based on the number of queries and explanations given on the lease buyout, it seems a lot of folks don’t understand how this works. I’ll say this, if you are happy with your price and type of financing, go for what makes you feel comfortable. Not everyone is going to feel the same about the buyout option, keep in mind, it is an option, if you choose to go that route. Sometimes it might feel strange to get financing when you get the car and then go and get more financing later. The key to remember is the dealer is more than likely going to bump your finance rate to make a profit, that’s part of how they make money. If you are not savvy on the financing process and your credit score isn’t where it needs to be for the best rate or even if it is, it can happen. The interest is paid over time so if you get new financing, the interest isn’t rolled from the old payment into the new. The new financing is based on the amount you owe at that time without any future payment of the current interest. By securing a lower interest rate you will save money over the payment period, in addition, if you pay the loan off early, you also save a bit.

KIA is giving a huge lease rebate and the dealer is discounting these cars to move them. They might not all be doing this now but when the 2019 start showing up, they will want to dump the 2018s to get them off their books. Good luck everyone! May you score a great deal on your Stinger!

Let me say this: Even the finance guy at my Kia dealership was mystified and tried to incorrectly explain the payoff amount. Hadn't heard of anyone ever doing this. Lots of people have even pointed out the double taxation issue with the tax being included in the lease and having to be paid again for the buyout. I think there are a few uncertainties that people still need confirmed by spelling out every detail in a sample sale and what the exact refi conditions are.

 

[Waynerm002]

The leasing thing isn't that new to KIA but maybe the dealership personnel aren't up to date on this. The lease contract has no restrictions on you doing this. Keep in mind a number of folks here are coming from other brands where they have done this and as mentioned the lease contract has no restriction on this. The dealer cannot give you the buyout price, your concern should be to get the best price on the deal and the out the door cost as that is what you will be refinancing if you get it done soon or a bit less if you wait a month or 2 to do it.

Forgot to mention the tax thing. Check your state’s site on taxation for vehicle purchase. In mine you are taxed on the entire vehicle price up front for the lease, if you purchase the vehicle at the end of the lease or anytime after the lease starts, you do not pay additional taxes on it. You don’t have to take our word on what we say here, but you can certainly go to the source of the information for your state and find it. Remember, we are sharing information to help others however, anyone can find information on this on their state’s motor vehicle site.

 

[GronkSoyFiesta]

OK, so I got my deal. 39.9 for GT2AWD with discount and lease cash. I was shooting for more discount, but I think this is a very fair price. Thanks for everyone's help. Pick her up tomorrow. YESSSSSS!

 

[GronkSoyFiesta]

So, work colleagues are trying to tell me I can't do this. Anyone know about Wa state laws on lease early buyout? Anything I should be on the lookout for in the agreement tomorrow?

 

[Akriant]

Does anyone know how long on average it takes for KMF to process everything? I can't seem to create an account on their website, keeps giving me "invalid VIN" error (at the same time my account on Kia.com works just fine).

Thanks in advance for replies.

 

[Akriant]

So, work colleagues are trying to tell me I can't do this. Anyone know about Wa state laws on lease early buyout? Anything I should be on the lookout for in the agreement tomorrow?

I don't hold a law license in WA, so this is not a legal advice. Generally speaking the terms of the contract dictates the rules, so long as the contract is not unconscionable and does not violate some state laws. I would be hiiighly surprised if WA had some weird law that prevented a purchase/buy-out option of a vehicle lease. The Office of Attorney General's website for your state actually talks about purchase options, so this for me is an indicator that it's not generally prohibited in your state.