Lease then buy out immediately (question)

[Mach_Tuck]

Ouch. Yup, glad we don't have a state income tax here in WA!!!!

Id be ok with an added 2% sales tax IF i got to pay zero state income tax. As MarkyMark said...legalized theft!

 

[MarkyMark]

Id be ok with an added 2% sales tax IF i got to pay zero state income tax. As MarkyMark said...legalized theft!

In OR the legislature always wants to ADD in a sales tax, and "slightly" reduce income tax. Ha! Boil us like frogs slowly from 3 sides now like everyone else. I don't think so!!! I respond with "You eliminate property tax - or - income tax and I'll be fine with a sales tax." To which they absolutely cringe!

They cringe because they say "Do you know how much sales tax that would be?!" To which I say "In fact let's just get ride of all these targeted taxes on this group, that group, etc.. and just eliminate all of them, I never need to fill out another piece of paperwork for taxes for the state ever again, and go full on consumption/sales tax."

Then they pass out and say "People could go into shock at how high that would need to be!"

And I end with letting them know "Exactly. You CLEARLY understand how much you are gouging me/Oregonaians today already, you just don't want to expose it." Mic drop.

 

[RJStinger]

I'm confused about this process. Just for clarification, if I do an immediate lease buyout, am I essentially saving the 7000 lease cash?

So if the MSRP is 52k and I can do the lease buyout immediately with cash, will i essentially be paying 45K (+tax) for the car? Kia doesn't penalize by taking away the lease cash if you buyout early? I realize there's a 300$ buyout fee.

Thanks

 

[Rufus]

I'm confused about this process. Just for clarification, if I do an immediate lease buyout, am I essentially saving the 7000 lease cash?

So if the MSRP is 52k and I can do the lease buyout immediately with cash, will i essentially be paying 45K (+tax) for the car? Kia doesn't penalize by taking away the lease cash if you buyout early? I realize there's a 300$ buyout fee.

Thanks

Correct, sir! We leased ours and Kia Motor Financial (KMF) threw $5k on the hood in order to get folks behind wheel and on the road.

That lease cash lowers the actual amount of the car ("cap cost") as a monthly lease pmt is based on that bottom amount. To the best of my knowledge there is no verbiage in the lease prohibiting you from buying your lease out once the deal is signed. And they certainly cannot revert the sale price post-signing.

That said, you cannot turn to KMF to finance the buyout. You would need to have the cash on hand or arrange for financing. We went thru our credit union and got 2.9% for 72 mos. All in, doing this saved us about $7k over what it would've cost us had we completed the lease then bought it. Even without the lease cash, doing this would have still saved us about $3k just in the lease financing rate.

 

[NYLAWBIZ]

Does it make a difference how many miles/per year the lease is for, if you are going to to the the lease-buyout thing within the first month or so?

 

[Chris]

Does it make a difference how many miles/per year the lease is for, if you are going to to the the lease-buyout thing within the first month or so?

It shouldn't.

 

[NYLAWBIZ]

Well, it looks like the residual is less as the mileage increases. Does that lower the buyout cost if you buyout the first month?

 

[Chris]

Well, it looks like the residual is less as the mileage increases. Does that lower the buyout cost if you buyout the first month?

Nope, the cost of the car is the cost of the car. If the residual is less the other side of the equation is more. (The amount of payments you owe) you have to pay that minus the interest too.

 

[NYLAWBIZ]

Thanks. So, as an example for the GT@ AWD I am buying:

Cap Cost: $49,500.00 less lease cash of $7,000 = $42,500.00 + residual of $26,312.50 = MF is .00210, so $42,500 x .0021 = $89.25 + acquisition fee of $300. So the buyout would be $42,500 + $389.25 = $42,889.25?

 

[Chris]

Thanks. So, as an example for the GT@ AWD I am buying:

Cap Cost: $49,500.00 less lease cash of $7,000 = $42,500.00 + residual of $26,312.50 = MF is .00210, so $42,500 x .0021 = $89.25 + acquisition fee of $300. So the buyout would be $42,500 + $389.25 = $42,889.25?

Should be real close to that. Depending on your state you'll also have to pay the rest of the sales tax. (Unless you live in a state that you pay full sales tax on the lease)

 

[NYLAWBIZ]

Thanks again.

 

[MarkyMark]

Id be ok with an added 2% sales tax IF i got to pay zero state income tax. As MarkyMark said...legalized theft!

Off topic, but yes, I would gladly go 100% SALES TAX, IF the government overlords removed property tax, income tax, gas tax, fees (DMV, License, Registration, Title), ALL taxes hidden or not, all wrapped up into a SALES TAX.

Of course, when I say this, politicians say "Oh, that would be a huge sales tax, it would shock people into spending nothing." To which I respond "So you know how much you are taking from my family, here, there, everywhere more and more every single time Congress meets, but you don't want it revealed or their would be a revolt?!" Mic Drop - and silence in response.

I have NO idea how people live in NJ, Illinois, NY or CA. Just nuts.

And back to this blog - which leads me to say I have no idea how people afford the Stinger (new cars period) in these states that charge multiple thousands of dollars of tax on the car, along with all their other taxes they pay day in and day out. Wow...

Go Stinger! There, did that get me back on the path to 365hp and 376b ft torque? ; )

 

[NYLAWBIZ]

It's a way of life one inures to.