Lease/Purchase Strategy Question

[Via Chicago]

Hi All,

First post here in the forum. I appreciate all of the useful content from the community.

I'm interested in the Stinger, and my preference would be to do an outright purchase. However, the leases have much better cash back incentives. Has anyone considered doing the lease to take advantage of KMF's rebate and then just buying out the lease right away?

Thanks in advance.

 

[CO-bound]

That's what I did, but it wasn't intentional. I leased 12/13, and very next day arrived at work and found out I was being transferred to another office; my 2 mile drive is about to become a 26 mile drive. I decided then to buyout the lease to avoid any mileage/wear-tear issues later.

Painless process; the lease buyout was ~45k (would have been way higher if not for the lease cash and my DP), I got a 60 month loan through my credit union, signed the check and some other docs, sent to KMF and that was that.

 

[Via Chicago]

That's what I did, but it wasn't intentional. I leased 12/13, and very next day arrived at work and found out I was being transferred to another office; my 2 mile drive is about to become a 26 mile drive. I decided then to buyout the lease to avoid any mileage/wear-tear issues later.

Painless process; the lease buyout was ~45k (would have been way higher if not for the lease cash and my DP), I got a 60 month loan through my credit union, signed the check and some other docs, sent to KMF and that was that.

Thanks for your response. Kia's money factor and residual value are lackluster for the Stinger, IMO, so my hunch is that my payoff amount wouldn't end up being much less than MRSP at the end of the day.

 

[Bigserver1]

Thanks for your response. Kia's money factor and residual value are lackluster for the Stinger, IMO, so my hunch is that my payoff amount wouldn't end up being much less than MRSP at the end of the day.

Hopefully the residual rises throughout 2018 as more of these cars roll off the lots and Kia sheds its cheap image more and more.

As for their money factor on the stinger - it’s bad? What was the MF they offered you? On my forte lease the MF equated to something like 1.4%, but I didn’t know they had different rates depending on the car.

 

[Via Chicago]

The current offer from KMF on a GT2 AWD is .00198, which equates to about 4.75%

 

[Bigserver1]

The current offer from KMF on a GT2 AWD is .00198, which equates to about 4.75%

Wow that is terrible. I feel like they’re cashing in on anyone who wants to be an early adopter of this car by inflating pricing and offering terrible lease deals. I’m really interested in this car about 11 months from now, so hopefully some of this dies down by then.

 

[Kia Stinger]

Welcome aboard, @Via Chicago! Thank you for signing up!

Wow that is terrible. I feel like they’re cashing in on anyone who wants to be an early adopter of this car by inflating pricing and offering terrible lease deals. I’m really interested in this car about 11 months from now, so hopefully some of this dies down by then.

You're not surprised, are you? All the dealers try to cash in on early adopters for something special...

 

[Bigserver1]

Welcome aboard, @Via Chicago! Thank you for signing up!



You're not surprised, are you? All the dealers try to cash in on early adopters for something special...

Ha, no not surprised. If people will pay $700 for a lease, Kia should charge $700 for a lease.

 

[Merkur720]

If they are applying $6500 - $7200 lease cash out the gates for a GT2 36 month lease, that makes the MF not seem crazy. Now if they weren't offering any lease cash back, yes, that would be TERRIBLE.

 

[Chris]

Meh, even with the lease cash that MF is outrageous. Doesn't matter if your paying 4.5% interest on 52k or 45k is still a horrible deal.

 

[Bigserver1]

Meh, even with the lease cash that MF is outrageous. Doesn't matter if your paying 4.5% interest on 52k or 45k is still a horrible deal.

Agreed. Especially when excellent credit is getting you 1-2% (sometimes even less) on most other car brands, and even other Kias...

 

[Jayce]

Meh, even with the lease cash that MF is outrageous. Doesn't matter if your paying 4.5% interest on 52k or 45k is still a horrible deal.

Agreed. Especially when excellent credit is getting you 1-2% (sometimes even less) on most other car brands, and even other Kias...

I just looked at the 2018 Kia Optima MF rates on Edmunds, and they're pretty close to the Stinger rates actually. Back in August, they were lower however the lease cash has increased some since then. I wonder if they just alternate between increasing rates/lease cash and then decreasing rates/lease cash.

 

[Shieldzee]

Thanks for your response. Kia's money factor and residual value are lackluster for the Stinger, IMO, so my hunch is that my payoff amount wouldn't end up being much less than MRSP at the end of the day.

What kind of residual value percentages are they applying for GT2's for 36 months?

 

[Jayce]

What kind of residual value percentages are they applying for GT2's for 36 months?

For RWD it is 53% and for AWD it is 52%. That is for 10k miles. Subtract 1% for 12k and 3% for 15k.

 

[Shieldzee]

For RWD it is 53% and for AWD it is 52%. That is for 10k miles. Subtract 1% for 12k and 3% for 15k.

Thanks Jayce. That is not great. I was hoping for something closer to 60%. And that is off MSRP right? Appreciate it.

 

[Jayce]

Thanks Jayce. That is not great. I was hoping for something closer to 60%. And that is off MSRP right? Appreciate it.

No problem. Yeah, it's based off MSRP. It sucks that the residuals are so low, but I think it's just the way it goes with Kia vehicles now. Maybe later down the road when their brand image has improved, their residuals will increase. I think that is why they offer so much lease cash on their higher end vehicles. You still get to buy the vehicle for a decent (realistic) price at lease end if you should so decide, but you are not paying for all of that depreciation. If residual was 58% on the AWD and it included only 4k in lease cash, the same thing would be accomplished.

 

[Mach_Tuck]

Those residual levels are the same as i was quoted for the RWD. I agree and was also hoping to see closer to the 60% mark. Hopefully the lease cash will remain for the 2019 MY or the residuals will rise, as Jayce stated, they accomplish a similar outcome.

Not sure how much brand image matters. As comparison, Lexus quoted me a pathetic 45% residual on a 2017 RCF for 36 month and 10K/yr with $7000 down with $1255/month and MF .00275. Yeah, not happening.

By comparison, the Kia lease deals are more attractive.