If I get a lease per month number, do i care about the

[anselgator]

If I get a lease per month number, do i care about the other factors surrounding a lease? Still not the greatest at putting a lease together.

Interested in a Y18 Gt2 RWD....per Nov incentives the MF is .00197 I believe. I had a dealer tell me residual on a 50k car is $24,163.20 after 3 years, 10k miles.

So If said I wanted this car at $450 a month and they agreed, do I care 'how they make it work'? And/Or more specifically, what do they do to make it work? Play with the money factor?

Thanks for helping me understand.

 

[MerlintheMad]

That residual seems low to me, because mine was the same almost to the dollar: $24,156. Yet my gross capitalized cost plus "items" was $45,407.26, minus $5,900 rebate cash, equals "Adjusted Capitalized Cost" of $39,507.26. So the residual of your more expensive initial agreed value of "$50K" should not depreciate faster to such a low residual. It looks like they are playing tricks to fiddle with your monthly payment. Oh, and my annual miles was 15K.

Now, somebody else who knows more can clear this up.

 

[Paul32]

That residual seems low to me, because mine was the same almost to the dollar: $24,156. Yet my gross capitalized cost plus "items" was $45,407.26, minus $5,900 rebate cash, equals "Adjusted Capitalized Cost" of $39,507.26. So the residual of your more expensive initial agreed value of "$50K" should not depreciate faster to such a low residual. It looks like they are playing tricks to fiddle with your monthly payment. Oh, and my annual miles was 15K.

Now, somebody else who knows more can clear this up.

Using just monthly rate works if you don't plan on purchasing the car at the end of the lease and there is no up front cash. I think paying $450 per month for 36 months with no cash, other than the first payment, would be a good deal even for 10k miles. If you need more miles, just increase the monthly rate. The other consideration is if you ran over your mileage requirement, can get expensive.

 

[MerlintheMad]

The other consideration is if you ran over your mileage requirement, can get expensive.

That was what I saw happening right away: even 15K miles a year wasn't going to cut it, so I paid attention to the lease buyout conversation and opted to do that at three months. Here I am at eight months, and well over 13K miles already. Leasing 36 months, driving within your miles, or buying out the lease: it all depends on individual needs and wants.

 

[twolfcale]

If I get a lease per month number, do i care about the other factors surrounding a lease? Still not the greatest at putting a lease together.

Interested in a Y18 Gt2 RWD....per Nov incentives the MF is .00197 I believe. I had a dealer tell me residual on a 50k car is $24,163.20 after 3 years, 10k miles.

So If said I wanted this car at $450 a month and they agreed, do I care 'how they make it work'? And/Or more specifically, what do they do to make it work? Play with the money factor?

Thanks for helping me understand.

You can lease a new 2019 GT2 RWD for $450 a month. You can lease a Porche for $450 a month. You can lease anything for $450 a month, you just have to put the right amount of money down up front to make it a terrible deal.

If you want to spend $50k on something, you need to do more homework. It's boring, but it's important. That residual and money factor look fine, but you wouldn't know if they weren't. Start by using a lease calculator (google) - see how the MSRP, sale price, MF, residual, etc. affect the monthly payment on a lease. That way when the dealer says no to your ask, you can actually understand how to negotiate with them. Not saying this to be an a**hole, and I'm happy to help any way I can.

 

[anselgator]

You can lease a new 2019 GT2 RWD for $450 a month. You can lease a Porche for $450 a month. You can lease anything for $450 a month, you just have to put the right amount of money down up front to make it a terrible deal.

If you want to spend $50k on something, you need to do more homework. It's boring, but it's important. That residual and money factor look fine, but you wouldn't know if they weren't. Start by using a lease calculator (google) - see how the MSRP, sale price, MF, residual, etc. affect the monthly payment on a lease. That way when the dealer says no to your ask, you can actually understand how to negotiate with them. Not saying this to be an a**hole, and I'm happy to help any way I can.

Everything for a lease was based on on 0 down

 

[anselgator]

You can lease a new 2019 GT2 RWD for $450 a month. You can lease a Porche for $450 a month. You can lease anything for $450 a month, you just have to put the right amount of money down up front to make it a terrible deal.

If you want to spend $50k on something, you need to do more homework. It's boring, but it's important. That residual and money factor look fine, but you wouldn't know if they weren't. Start by using a lease calculator (google) - see how the MSRP, sale price, MF, residual, etc. affect the monthly payment on a lease. That way when the dealer says no to your ask, you can actually understand how to negotiate with them. Not saying this to be an a**hole, and I'm happy to help any way I can.

Trust me I'm researching! But also using the wisdom of this forum. Hopefully I can pay it forward one day. I'm pretty good w finances, just lease was always this black hole to me. I looked at the paperwork on my current lease (got a new 2016 Maxima SE for $389 w 12k miles...sticker was 40k)...and I did the 'i want to pay this'...and they worked backwards. I can't find the MF on the paperwork however. But If i take a 50k on Kia's site, after the 8k of incentives..using their calculator....the lease is still upper 5's if not in 6's. So trying to reconcile the two..to then figure out how to best get into the Stinger

 

[twolfcale]

Trust me I'm researching! But also using the wisdom of this forum. Hopefully I can pay it forward one day. I'm pretty good w finances, just lease was always this black hole to me. I looked at the paperwork on my current lease (got a new 2016 Maxima SE for $389 w 12k miles...sticker was 40k)...and I did the 'i want to pay this'...and they worked backwards. I can't find the MF on the paperwork however. But If i take a 50k on Kia's site, after the 8k of incentives..using their calculator....the lease is still upper 5's if not in 6's. So trying to reconcile the two..to then figure out how to best get into the Stinger

You can get away with the "I want to pay this" method and not care about how they make it work, as long as the amount you want to pay is ridiculously low. In this case, $450 per month with zero down is. But then they'll come back and say "we can't possibly do that, best we can do is $575/mo" and you won't have any way to negotiate.

The leases are terrible because the MF (interest rate) is high and the residual (car value after lease) is low, which means you're paying for a huge percentage of the car's value in only 3 years, AND you're paying a high interest rate to do it. Both values are set by Kia, along with the incentives, so they're theoretically the same for every dealer. That means the only way you're getting a "better deal" from one dealer to the next is mostly based on the sale price before incentives - how much the dealer is willing to discount the car from MSRP before subtracting the money $8k Kia is offering.

To get to $450 with zero down, you'd need a sale price before incentives of around $42500 on a RWD model (ballpark not knowing your tax rate, etc - again, you can calculate this online with a lease calculator just by punching numbers in to see how it changes). And even if a dealer went with a sale price that low, that still assumes you pay the ~$1600 of taxes up front to get that $450 payment. Getting to $450/mo on a GT2 with absolutely zero at signing just won't happen with Kia's leasing numbers.

 

[brancky3]

You can get away with the "I want to pay this" method and not care about how they make it work, as long as the amount you want to pay is ridiculously low. In this case, $450 per month with zero down is. But then they'll come back and say "we can't possibly do that, best we can do is $575/mo" and you won't have any way to negotiate.

You can negotiate by walking out the door
This is exactly what I did... I said "I want to trade in my Audi and drive out of here in a GT2 without raising my payment". They said it's impossible, it's a $50k car, etc, etc. I started walking out the door, they lowered the price to $30 more a month than my car. I started walking out the door, they lowered the price to $15 less a month than my car. I REALLY doubt $450/month with $0 down will happen, but you could probably swing $500 with the right dealer.

 

[anselgator]

You can get away with the "I want to pay this" method and not care about how they make it work, as long as the amount you want to pay is ridiculously low. In this case, $450 per month with zero down is. But then they'll come back and say "we can't possibly do that, best we can do is $575/mo" and you won't have any way to negotiate.

The leases are terrible because the MF (interest rate) is high and the residual (car value after lease) is low, which means you're paying for a huge percentage of the car's value in only 3 years, AND you're paying a high interest rate to do it. Both values are set by Kia, along with the incentives, so they're theoretically the same for every dealer. That means the only way you're getting a "better deal" from one dealer to the next is mostly based on the sale price before incentives - how much the dealer is willing to discount the car from MSRP before subtracting the money $8k Kia is offering.

To get to $450 with zero down, you'd need a sale price before incentives of around $42500 on a RWD model (ballpark not knowing your tax rate, etc - again, you can calculate this online with a lease calculator just by punching numbers in to see how it changes). And even if a dealer went with a sale price that low, that still assumes you pay the ~$1600 of taxes up front to get that $450 payment. Getting to $450/mo on a GT2 with absolutely zero at signing just won't happen with Kia's leasing numbers.

Thanks....you said something interesting which I had heard before.....the residual is low. I am playing with buy vs lease scenarios (i actually have 4 scenarios..don't ask lol)........and the buy only popped in after reading this forum with the lease then buyout....but should you buy a car that is dropping it's value faster than others? I suppose this is a personal question, and only comes into question if you don't keep the car for a long time. I could see myself keeping the Stinger for defintely longer than 3 years.....maybe to 7...heck, I'm not quite ready to even give up the Maxima (wife is though!)....and the Stinger will be on a whole different level...more towards the 3 series I had before the Maxima.

 

[twolfcale]

should you buy a car that is dropping it's value faster than others? I suppose this is a personal question, and only comes into question if you don't keep the car for a long time.

The residual value is poor for most cars in this segment, and a first year model Kia trying to break into the sports sedan world will probably depreciate faster than it's competition. You're right that the rate of depreciation will hit you harder the shorter time you keep the car, but keep in mind that 50% of the depreciation happens in the first three years - that's why so many people prefer buying their cars used as they come off lease with 3 years and relatively low mileage on them, because they tend to depreciate at a slower rate for the remainder of the car's lifetime.

Generally speaking, you should lease if you plan to get a new/different car every few years, and buy only if you plan to keep the car well past when you're done making payments on it.

 

[Stinger957]

As others have said, the residuals on the Stinger are not great. Shopping recently for a lease on a GT2 the residuals I was quoted ranged from .46 to .48 (36 month/12K miles). That said, the huge incentives Kia is offering now for leases are to offset that initial depreciation. I just leased a GT2 AWD (MSRP 52,975) with over 5K dealer discount and 9K Kia lease incentive for a cap cost of 39,726. Even with a residual of .47, I'll only be paying for 28% depreciation after 3 years. (Well, 28% of the MSRP, 38% of the purchase price.)

 

[Stinger957]

Also, I can't remember where I read this, but as a quick check to determine if a lease deal is good or not, you can divide the MSRP by the "real" monthly payment (see below). If the ratio is greater than 75 it's an "okay" lease. Greater than 100 is a "great" lease. The "real" monthly payment is the base payment (before tax) plus any down payment divided by the term of the lease. For example:

MSRP: 40,000
Down Payment: 3000
Payment: 399
Term: 36 months
Real payment = 399 + 3000 / 36 = 482
MSRP / Real Payment = 40000 / 482 = 83 (This is a "good", but not "great" lease deal)

I've found that most lease deals tend to be in 80's, but if you look hard enough you can get close to 100.

 

[anselgator]

As others have said, the residuals on the Stinger are not great. Shopping recently for a lease on a GT2 the residuals I was quoted ranged from .46 to .48 (36 month/12K miles). That said, the huge incentives Kia is offering now for leases are to offset that initial depreciation. I just leased a GT2 AWD (MSRP 52,975) with over 5K dealer discount and 9K Kia lease incentive for a cap cost of 39,726. Even with a residual of .47, I'll only be paying for 28% depreciation after 3 years. (Well, 28% of the MSRP, 38% of the purchase price.)

Thanks. A few follow ups 1) Do you mind me asking what you ultimately got the lease for? 2) The 5k dealer discount...how did you get that? I currently can get a 50,500 GT2 RWD down to 40,850. When I asked for the lease in the 4's he told me no way. Maybe I'm being very unrealistic...I did use your formula against my Maxima....$389/month for a 40K sticker.....that score 102. So maybe a $50k sticker at 550 a month (score 92) isn't that bad.

 

[Stinger957]

Thanks. A few follow ups 1) Do you mind me asking what you ultimately got the lease for? 2) The 5k dealer discount...how did you get that? I currently can get a 50,500 GT2 RWD down to 40,850. When I asked for the lease in the 4's he told me no way. Maybe I'm being very unrealistic...I did use your formula against my Maxima....$389/month for a 40K sticker.....that score 102. So maybe a $50k sticker at 550 a month (score 92) isn't that bad.

Here's what I ultimately got for my lease:
MSRP: 52,795
Net price after discounts and fees: 39,726
Money factor: .00196
Residual: .47 (24814)
Payment before tax: 541
First payment + sales tax on rebates due at signing

I looked for several weeks and got offers from 4 different dealers. With 0 down, most of them started with about a 640 payment. I finally found a dealer who was willing to discount the car heavily because it was their last 2018 on the lot.