Lease then Buyout - Contract Explanation

[Thomas Cerra]

How long did it take for your info to post to the Kia website? I signed all the paperwork on Wednesday 7/15 and so far I still can’t register using the VIN. Thanks.

It took three weeks until my VIN was recognized.

 

[paul1974]

I have been trying to make this work in Virginia and the dealers are not budging. They are claiming that the sales price goes up when the lease is used. It seems they are trying to keep the cash rebate. Anyone recommend a dealer in VA?

 

[OhioStateStinger]

I have been trying to make this work in Virginia and the dealers are not budging. They are claiming that the sales price goes up when the lease is used. It seems they are trying to keep the cash rebate. Anyone recommend a dealer in VA?

Don't talk purchase or lease until you have a dealer price on the car. They are suckering you big time by saying that.

My dealer and I agreed on a price, THEN and only then did we talk about purchase rebates vs lease cash rebates. It made it so much easier to know where money came from or if money was being moved around. Knowing these rebates ahead of time help even further.

I usually take this approach:
1) Dealer Price
2) Rebates
3) Trade (if applicable).

 

[paul1974]

Don't talk purchase or lease until you have a dealer price on the car. They are suckering you big time by saying that.

My dealer and I agreed on a price, THEN and only then did we talk about purchase rebates vs lease cash rebates. It made it so much easier to know where money came from or if money was being moved around. Knowing these rebates ahead of time help even further.

I usually take this approach:
1) Dealer Price
2) Rebates
3) Trade (if applicable).

Thanks! That is exactly what I did. I asked for the price. As if I were just writing a check. They said it was 44k. Then I said I wanted to lease. They said that would affect the cash price. I said nope. They never returned my calls or emails.

 

[OhioStateStinger]

Thanks! That is exactly what I did. I asked for the price. As if I were just writing a check. They said it was 44k. Then I said I wanted to lease. They said that would affect the cash price. I said nope. They never returned my calls or emails.

Were they possibly assuming you were looking for an OTD cash price? My dealer price was not including taxes, but just simply their sale price below MSRP which should easily be able to be in the 8%-10% range before anything else. At this point though it definitely sounds like time to look at another dealer.

 

[fc528e]

Were they possibly assuming you were looking for an OTD cash price? My dealer price was not including taxes, but just simply their sale price below MSRP which should easily be able to be in the 8%-10% range before anything else. At this point though it definitely sounds like time to look at another dealer.

What Ohio here said. I contacted somewhere between 20-30 dealers within 300 miles of me before I had 3 that wanted to actually work with and listen to me. Ended up getting my 2020 GT2 for $39,500 before taxes. Just waiting for it to show up on the Kia Finance website to complete the buyout.

 

[paul1974]

What Ohio here said. I contacted somewhere between 20-30 dealers within 300 miles of me before I had 3 that wanted to actually work with and listen to me. Ended up getting my 2020 GT2 for $39,500 before taxes. Just waiting for it to show up on the Kia Finance website to complete the buyout.

Dulles Kia offered me a price of 38,241 after rebates but they are charging ridiculous fees. 1095 for freight, 1000 processing fee and then a few other fees making the deal terrible. 650 acquisition fee and 805 in capitalized initial fees.

 

[fc528e]

Dulles Kia offered me a price of 38,241 after rebates but they are charging ridiculous fees. 1095 for freight, 1000 processing fee and then a few other fees making the deal terrible. 650 acquisition fee and 805 in capitalized initial fees.

What trim is that quoted price for? Are all those fees in the $38,241? The freight isn't insane if they have to actually deliver the car from Iowa to you in Virginia. As for processing and other fees, you may be able to negotiate them.

If that's the price for a 2020 GT2 and it doesn't include all those mentioned fees, it's not amazing, but it's certainly not terrible. Maybe try working it a bit. If that's out the door price, sign STAT (after reading all fine print and verifying you are able to do a buyout without issue in your state when buying from another. I'm not a lawyer or financial advisor and this should not be considered legal or financial advice).

 

[paul1974]

That is the price without fees. Fees make it nearly 44,000. It not being delivered to me, that fee is the freight to the dealer. It is a 2020 GT 2. MSRP 55k.

 

[fc528e]

That is the price without fees. Fees make it nearly 44,000. It not being delivered to me, that fee is the freight to the dealer. It is a 2020 GT 2. MSRP 55k.

I'd likely tell them to eat it, in that case. Sorry you're having such a bad go trying to nail a decent deal down.

 

[paul1974]

I did. The sales manager was a jerk. Very confrontational for no reason.

 

[Jertom08]

What Ohio here said. I contacted somewhere between 20-30 dealers within 300 miles of me before I had 3 that wanted to actually work with and listen to me. Ended up getting my 2020 GT2 for $39,500 before taxes. Just waiting for it to show up on the Kia Finance website to complete the buyout.

How did it go? What was the payoff amount?

 

[wmz]

I have a question about negotiation tactics. Since I'll be planning to do a lease buyout, MF markup doesn't really matter, right? Should I offer a higher MF as an incentive to the dealership to lower the sales price? Is this potentially a win-win for both myself and the dealership? I'm not sure what kind of performance metrics or rewards they get for high MF leases, or if it really just depends on the sales price.

 

[Giant655]

So does anyone have a guess as to how long the lease buyout will last?

 

[wmz]

Data point from LA on a GT2 AWD (Red):

• MSRP: $54,180
• Negotiated discount: $4,676 (8.6% off MSRP or $1,850 under invoice) - I started by asking for 10%. Salesperson couldn't get it for me but found a way to apply a $750 conquest incentive from my existing lease with another company (below)
• Negotiated selling price of car: $49,504 ($54,180 - $4,676)
• Acquisition fee: $650
• Lease rebates & incentives: $10,202 ($9,700 lease rebate + $750 conquest - some random $247.54 that I couldn't figure out)
• Down payment: $0
• Adjusted cap cost: $39,952 ($49,504 + $650 - $10,202)
• Taxes on lease rebates & incentives: $969 ($10,202 * 9.5% tax rate)

Approximate net buyout cost ignoring a bit of interest from the first lease payment:

• Before tax: adjusted cap cost ($39,952) + buyout fee ($300) = $40,252
• After tax: $40,252 + 9.5% * ($39,952 + $10,202) = $45,016

One important thing to watch out for: in most states, the lease incentives/cash back are taxable. In LA, that's at 9.5%, so I had to pay almost a grand in additional taxes. That definitely takes a good chunk out of the savings, but I'm still pretty satisfied with my final price.

 

[Lonz]

So does anyone have a guess as to how long the lease buyout will last?

I would say forever. Anybody can buy out a lease at any time. At the end of the day, a lease is simply a loan with a financial institution originated by the dealership. Some financial institutions charge a lease buy out fee, most don't. Kia Motor Finance does not charge one. The dealership usually charges one if you buy-out the lease through them, which you should NOT do, since you can buy-out the lease directly via KMF with no fees.

A lease buy-out is pretty much like someone going to their financial institution and paying off their loan amount, whether it's for a vehicle, house, motorcycle, boat, etc.

So bottom line, I would say they will last forever. I suppose Kia Motor Finance could add a lease buy-out fee maybe to discourage buy-outs. Sure hope not! I plan on doing the exact same thing when my Telluride arrives at some point this year. I put a downpayment back in December of 2019, and it's still not here! Crazy!

 

[Lonz]

One important thing to watch out for: in most states, the lease incentives/cash back are taxable. In LA, that's at 9.5%, so I had to pay almost a grand in additional taxes. That definitely takes a good chunk out of the savings, but I'm still pretty satisfied with my final price.

I'd say you got a solid deal there! One thing to note, the $300 buy-out fee is only applicable if you go through the dealership to buy out the Stinger. The dealership basically charges you $300 for taking your money, and turning around to pay Kia Motor Finance. They also submit the odometer discloser statement for you. I would not go this route. You can do both directly with KMF, and avoid the $300 fee with the dealership. You can call KMF at 1-866-331-5632 to verify.

Sucks to hear that you have to pay taxes on the rebate. That is ridiculous, and simply not fair. Must be a blue state thing. We don't have those unnecessary taxes here in Missouri.

 

[Giant655]

Even with the big money incentive?
I guess that's what I was getting at- will there ever be a point that kia stops offering (up to 10k in some cases) the big "get you in the door"

 

[wmz]

Oh sweet thanks for the tip on the buyout fee!

 

[Jertom08]

I ended up getting a little over $12k off the msrp on a 2020 GT2 AWD! Loving it!

Buyout was available on KMF 3 days after I got the car. Just need to get in touch with KMF to get the official buyout letter (tried 3 times today with no luck). Any advice?