I think I got scammed

[GenesisG70]

Can anyone tell me what is the rent fee?

 

[NS_Stinger]

Can anyone tell me what is the rent fee?

Its basically the total interest paid over the term of the lease.

 

[GenesisG70]

So if I pay off the car now and get out of the lease I don't get to pay the interest right?

 

[David C Dubbin]

Contract laws as with here in Canada can be influenced by all 3 levels of Gouvernment.

Though I am only "speculating" it looks to me like the $5500.00 amount is the cost of your lease over the 39 month period. This cost would include the true cost of the money plus, and, here is the kicker, the amount of money they, being the dealer, had to spend to BUY the lease interest rate down by to get you qualified for the lease payment or offer you an agreeable lease payment or both.
I saved my son recently from a similiar deal where he owed money on his trade in (added to purchase price), had money built into the deal to pay off a credit card (added to the purchase price) and a $5000.00 hit (added to the purchase) to buy down the interest rate all done to get his payment where it needed to be to get him qualified.
If I had not intervened he instantly would have been $10K+ up side down on the deal.
Perhaps I am missing something as well but was there a trade in? Did you own it or lease it?. Was there any money owing on the trade in? If it was leased as well, was it at full term or if you turned it back early, was there an early return penalty involved.

The finance/business manager's role is to get you into the car "at all cost" and sell you as many add ons as possible.

Most guys in the finance office make 30% of the sale price of the add ons or "spiffs" as they call them.

$300.00 window tinting becomes $900.00. $350.00 full frontal exposer stone guard becomes $1200.00. $900.00 extended wuaranty becomes $2500.00 and more.

Though difficult to believe, a dealer more often than not makes more money off of the customer on "spiffs" than they did in the sale of the car.

Hope this helps.

 

[GenesisG70]

This is the other page of the lease contract, I did not trade in anything and I did not put any money down upon signing. All of this is very confusing.

 

[David C Dubbin]

Contract laws as with here in Canada can be influenced by all 3 levels of Gouvernment.

Though I am only "speculating" it looks to me like the $5500.00 amount is the cost of your lease over the 39 month period. This cost would include the true cost of the money plus, and, here is the kicker, the amount of money they, being the dealer, had to spend to BUY the lease interest rate down by to get you qualified for the lease payment or offer you an agreeable lease payment or both.
I saved my son recently from a similiar deal where he owed money on his trade in (added to purchase price), had money built into the deal to pay off a credit card (added to the purchase price) and a $5000.00 hit (added to the purchase) to buy down the interest rate all done to get his payment where it needed to be to get him qualified.
If I had not intervened he instantly would have been $10K+ up side down on the deal.
Perhaps I am missing something as well but was there a trade in? Did you own it or lease it?. Was there any money owing on the trade in? If it was leased as well, was it at full term or if you turned it back early, was there an early return penalty involved.

The finance/business manager's role is to get you into the car "at all cost" and sell you as many add ons as possible.

Most guys in the finance office make 30% of the sale price of the add ons or "spiffs" as they call them.

$300.00 window tinting becomes $900.00. $350.00 full frontal exposer stone guard becomes $1200.00. $900.00 extended wuaranty becomes $2500.00 and more.

Though difficult to believe, a dealer more often than not makes more money off of the customer on "spiffs" than they did in the sale of the car.

Hope this helps.

Sorry to potentially add to your misery but I just read the document that you posted on this string.

There is most definitely an Early Lease Cancellation clause in the agreement where it speaks to there being costs of cancellation and those costs being higher the early you cancel the lease.

I am not certain what state you are in but if from the onset of the transaction, you told the business office person that it was your intention to terminate the lease in a year and then buy the car, you may have a case with your state's Consumer Protection agency or in Canada what we call the Department of Consumer and Corporate affairs.

Additionally, your State may have an Auto Dealers association that typically mandates and enforces fair trade policies and practices.

With any of these types of subjects, time is of the essence.

If you truly beleave that the transaction does not represent what was discussed in the business office, then I strongly advise you to inform the store by way of a traceable method of your concerns as soon as possible.
Good luck

 

[David C Dubbin]

Sorry to potentially add to your misery but I just read the document that you posted on this string.

There is most definitely an Early Lease Cancellation clause in the agreement where it speaks to there being costs of cancellation and those costs being higher the early you cancel the lease.

I am not certain what state you are in but if from the onset of the transaction, you told the business office person that it was your intention to terminate the lease in a year and then buy the car, you may have a case with your state's Consumer Protection agency or in Canada what we call the Department of Consumer and Corporate affairs.

Additionally, your State may have an Auto Dealers association that typically mandates and enforces fair trade policies and practices.

With any of these types of subjects, time is of the essence.

If you truly beleave that the transaction does not represent what was discussed in the business office, then I strongly advise you to inform the store by way of a traceable method of your concerns as soon as possible.
Good luck

So looking at the second document that you posted you were contractualy obligated to pay $5500.00 on delivery.

The dealer used $5500.00 of your previously referred to $11,000.00 discount to pay that $5500.00 up front lump sum payment. Net affect is that you did not have to dig into your jeans for $5500.00 to drive car away.

The challenge is that all the costs of borrowing the money for the lease have been added to the deal up front.

This method of financing is called front loading and is perfectly legal.

What it does is ensures that the lessee is contractually obligated to pay a specific amount of money divided by the number of payments over the carved in stone Lease Term period.

Your deal seems to make sense. The documents though confusing are actually for more unstandable then some I have seen.

I do not see however, unless the deal does not represent what you discussed in the business office, how you are going to be able to get out of this lease in a year.

Sorry my friend.

I hope this has helped a bit at least with your understanding of your contract.

Again best of luck going forward.

 

[Chark]

Can you post an image of your Monroney (window) sticker showing all factory installed items and anything the dealership might have installed either at port or on- site? Did you purchase any Excess Wear and Tear, GAP, Paint Protection, or any other Insurance? These all add to the purchase price.

Here is a brief explanation of your lease:

The Gross Capitalized Cost is the MSRP of the vehicle, plus any add-ons such as floor mats, wheel locks, extra insurance, etc., less whatever discount the dealership is giving you. In this case, the vehicle-only price is $46,710 and you've got about $1,121 in other items for a total of $47,821.

The Cap Cost Reduction includes any rebates, lease cash, trade in allowance, down payment, etc. and is $3,709. It's different than the $5,500 rebate total because they applied some of it to your first month's payment, taxes on the depreciation and a $899 document fee (which is pure profit). This results in a higher Adjusted Cap Cost than what you were thinking.

Adjusted Cap Cost is the Gross Cap Cost minus the Cap Cost Reduction. Here, it's $44,112.

The Residual Value is expressed as a percentage of the MSRP and is usually in the 50% - 53% range. In your case, the finance company is estimating your vehicle will be worth $26,400 at the end of the 39-month lease.

The Depreciation is the difference between your Adjusted Cap Cost and the Residual Value, or $17,712

Your monthly payment divides the depreciation into 39 payments and applies a money factor (interest rate) which is your cost to finance the deal.

Because your first payment was "paid" from the rebates, you owe 38 more payments. If you purchase the car instead of turning it in, you won't have to pay the $400 turn-in fee. I cannot see in Section 9 whether there is any penalty for buying out your lease, but usually through Kia, there isn't. Give it a while to process and then contact KMF and request a lease buyout package. They will have detailed instruction and exact payoff amounts.

Hope this helps.

 

[GenesisG70]

Hi,
MSRP 51765 plus 1800 in Dealer added stuff (tinted windows, etc)
Discussed total discount including Kia Finance lease Cash of a total of 11,000 in discounts
Did put Zero down
Did absolutely not buy anything else from the Dealer
WOW what amazingly helpful you guys have been in clarifying this but still cannot see where are the 11,000 in total discounts the dealer promised
I tried going to KMF and when I click buy out says contact the dealer, so it means I leasing the car from the dealer?
I wonder if I just should have done a regular finance to avoid all this mess... Or maybe I am over reacting and I actually did not get ripped?

Thank you guys!

 

[Chark]

OK - You're a lot closer than you think. Your total MSRP is $53,565. Your Adjusted Cap Cost is $44,112 for a difference of $9,453. $900 of your $11,000 in rebates was doc fees, the rest was tax on the depreciation and your first payment. Seems legit. If you just entered into the lease, it's probably not fully in the KMF system yet. Give it a few weeks, or at least until you get your license plates. Then contact KMF again to ask for the Lease Buyout Package.

Cheers!

 

[GenesisG70]

OK - You're a lot closer than you think. Your total MSRP is $53,565. Your Adjusted Cap Cost is $44,112 for a difference of $9,453. $900 of your $11,000 in rebates was doc fees, the rest was tax on the depreciation and your first payment. Seems legit. If you just entered into the lease, it's probably not fully in the KMF system yet. Give it a few weeks, or at least until you get your license plates. Then contact KMF again to ask for the Lease Buyout Package.

Cheers!

Thank you sir! sincerely appreciated the time you took to teach me all this stuff.

 

[Chark]

Additionally, I think they discounted the $1,800 in add-ons to the $1,100 amount - not too bad.

I'm trying very hard to be patient as the lease returns come back and Stingers become available on the used car market for $25K or so. It's difficult!

 

[GenesisG70]

Additionally, I think they discounted the $1,800 in add-ons to the $1,100 amount - not too bad.

I'm trying very hard to be patient as the lease returns come back and Stingers become available on the used car market for $25K or so. It's difficult!

You've been so helpful that I wanna give you mine after 3 years!

 

[MerlintheMad]

but still cannot see where are the 11,000 in total discounts the dealer promised

That, it appears, is where you got "scammed", aka "he said s/he said" if it came to a confrontation. By contrast, the place where I bought my car said up front, "$2,995" off MSRP, "our discount to you". And that stayed on through the entire signing.

The $5,500 rent fee and the $5,500 rebate seem to be a coincidence. Their total costs equaling the rebate must means that the Kia lease incentive (rebate) got used to pay for all that cost.

Altogether, it looks like you got an okay deal, nothing remotely like "we'll take $11,000 off", because I am not seeing it either.

Some have confused "end the lease" with "buyout the lease". You can do the buyout without penalty, and you will save almost all of that $5,500 rent fee over the (avoided) 39 months.

 

[Chark]

You've been so helpful that I wanna give you mine after 3 years!

Thanks in advance - 38 1/2 short months to wait! lol

 

[DiabloStinger]

Cap cost reduction looks to be 3K plus 700ish... that is the rest of the 11K they promised you.

 

[brancky3]

Altogether, it looks like you got an okay deal, nothing remotely like "we'll take $11,000 off", because I am not seeing it either.

I hate dealer shenanigans with a passion. When I bought my GT2 (RWD) I basically just said I want to lease this car for $550/mo, and if I can't get it for that price I'm not interested. Had to almost walk out twice, but they caved and gave it to me. I still need to get with the dealer regarding buying the lease out to see what kind of price they offer.

 

[MerlintheMad]

I hate dealer shenanigans with a passion. When I bought my GT2 (RWD) I basically just said I want to lease this car for $550/mo, and if I can't get it for that price I'm not interested. Had to almost walk out twice, but they caved and gave it to me. I still need to get with the dealer regarding buying the lease out to see what kind of price they offer.

Those "who know" leasing on this forum have in the past advised to not dicker over monthly payment. But I don't know what the practical difference is: if you only go in with a maximum price out the door, and monthly payment isn't an object for discussion, how does leasing make sense in the first place? I know: Kia incentives on the Stinger. That is the game changer: with leasing rebates sometimes in the $9K range (!?) it makes sense to get as much of that as possible and then do the buyout.

But typically, normally, leasing is for people who can't afford the higher monthly payments of financing to buy. Leasing allows lower monthly payments. So dickering over a maximum monthly payment (as you did) seems logical to me if you are not going to exercise the buyout. If you expect both a lower monthly payment and then do the buyout, why bother fighting for a lower monthly payment?

Lower monthly payment results in less of the Kia lease rebate/incentive applying. The dealer will tack on added costs and fees to reap a profit, gouging the incentive to nothing (It looks like the OP's incentive exactly equals the amount of the first payment). But if you go for a higher monthly payment and lower out the door price, then the incentive will apply more to get to the lower agreed price, and then you do the buyout and reap the reward of a lower out the door price.

(I am inviting correction/education on this: because leasing was entirely new to me a year ago, and I have slowly pounded what I think I understand about it into my middle aged brain. No doubt this is yet one more area where I know far less than there is to know.)

 

[eflyguy]

Monthly payments are directly related to the difference in cap cost and residual, with interest and other financing charges applied to that difference. Dealer has no input on residual number or, for the most part, the financial charges, so the most significant factor that determines the payment is the final cap cost number.

Your buyout will also be residual plus outstanding payments, less (hopefully) some of the interest.

It's why lease then buyout makes sense with these huge lease incentives - you can take advantage of the huge discount which shows up as the lower cap cost, hence saving that amount in the buyout.

Not everyone who leases does it to "afford" more car. I always lease my first model, because it's a risk-free way to guarantee I can walk away from a car later without the hassle of trading or selling. Twice I've had the residual "adjusted" down because the vehicle didn't hold its value as expected (got a buyout offer in the mail for substantially less than what was originally predicted.)

I've also had vehicles worth a fair amount more, so I bought them to use for additional trade-in credit against my next vehicle.

 

[Chark]

Did the dealership explain what your Money Factor was? It’s expressed as a decimal such as 0.0005 or something like that. If you multiply the MF by 2400, it equates to an interest rate. (1.2% in my example). That will help you determine whether the Rental Fee of $5500 is appropriate or not, although there may be initiation fees, more document fees, etc. that aren’t listed.