Lease then Buyout - Contract Explanation

[MarkyMark]

I did the Costco deal combined with the lease rebate and figured an approximate combined savings of $8k off sticker for my GT2. I’m estimating because it’s a moving target and the $300 fee, some say yes some no so it’s fluid. I’m happy. The dealer asked me to make three payments as less than that they take it in the shorts from Kia. Made sense to me they were pretty damn straight with me so no worries. I was ready to write a check and this was one helluva bonus I learned about here. My MSRP was 50,150. I got the net.

Congrats Joesph! Late Fall/Early Winter seems soooo far away for me right now (when I "should" have enough saved up) to buy a Stinger. But I'm a patient guy, and disciplined in savings, so once I have the proper funds I'll pull the trigger.

I'm in the PacNW and NO ONE has RWD GT's up here! Rrrrr... So dumb. It snows about 1 or 2x a year in Portland/Seattle, and because it rains a lot in the winter I need AWD? Please... Come on Kia, don't make me buy out of CA (which seems highly likely). But it is what it is... Excited none-the-less.

Again, congrats! What color?

 

[Joseph Spiegel]

Congrats Joesph! Late Fall/Early Winter seems soooo far away for me right now (when I "should" have enough saved up) to buy a Stinger. But I'm a patient guy, and disciplined in savings, so once I have the proper funds I'll pull the trigger.

I'm in the PacNW and NO ONE has RWD GT's up here! Rrrrr... So dumb. It snows about 1 or 2x a year in Portland/Seattle, and because it rains a lot in the winter I need AWD? Please... Come on Kia, don't make me buy out of CA (which seems highly likely). But it is what it is... Excited none-the-less.

Again, congrats! What color?

Thanks and I know. Go North and get a Canadian version. Then you get Qi and 360 cameras! I think they’re cheaper there too. Even with conversion of currency. Oh and see my sig...

 

[MarkyMark]

Thanks and I know. Go North and get a Canadian version. Then you get Qi and 360 cameras! I think they’re cheaper there too. Even with conversion of currency. Oh and see my sig...

With the conversion rate of USD to Canadian Dollar - no joke! I've heavily looked into it! Wow, getting more and 30% off due to the conversation. That said, I'm in Oregon which has ONLY a half-percent new car sales tax... In BC I think it gets spend (12% or so total between Canada and BC taxes), and the import tariff isn't bad, like $500 or so max. I can live with that.

However, the speedometer will be in Kilometers NOT miles... And Canada does not have a base GT, but loaded models, which I cannot afford no matter what the conversion ; ( Hmpf....

 

[Joseph Spiegel]

With the conversion rate of USD to Canadian Dollar - no joke! I've heavily looked into it! Wow, getting more and 30% off due to the conversation. That said, I'm in Oregon which has ONLY a half-percent new car sales tax... In BC I think it gets spend (12% or so total between Canada and BC taxes), and the import tariff isn't bad, like $500 or so max. I can live with that.

However, the speedometer will be in Kilometers NOT miles... And Canada does not have a base GT, but loaded models, which I cannot afford no matter what the conversion ; ( Hmpf....

Yeah, for now that have an overloaded GT2 with AWD. I wonder if there’s an emissions penalty?

 

[MarkyMark]

Yeah, for now that have an overloaded GT2 with AWD. I wonder if there’s an emissions penalty?

Yes, if it doesn't qualify for EPA, or my DEQ test, in 2-4 years I'm gonna be in BIG trouble!

 

[Joeh1974]

*snip*

 

[Mach_Tuck]

I did the Costco deal combined with the lease rebate and figured an approximate combined savings of $8k off sticker for my GT2. I’m estimating because it’s a moving target and the $300 fee, some say yes some no so it’s fluid. I’m happy. The dealer asked me to make three payments as less than that they take it in the shorts from Kia. Made sense to me they were pretty damn straight with me so no worries. I was ready to write a check and this was one helluva bonus I learned about here. My MSRP was 50,150. I got the net.

Curious, which dealer in AZ...i dealt with almost all of them.

Not certain on the AZ tax. I live here and everytime i have purchased a car out of state, i have always handled the tax directly with the local AZ DMV. Bring them the bill of sale and you pay the tax with the registration. I have "financed" with an out of state dealer as well and during that transaction, the dealer did properly collect and pay the AZ tax. The line item clearly stated AZ SALES (x.x%).

Personally i would try to get them to charge the proper tax as getting a refund may be less than ideal. Especially given the way i have seen Kia and KMF handle all the transactions with regard to my account. Just my two cents.

For the buyout, tax collection is a different story as KMF will collect in some states and will not in others. here is the note from the buyout quote section of KMF...i dont see MN on the list so expect to pay tax again during the buyout...

"*sales tax is collected by HCA in the states of AZ, CA, CT, ID, KS, ME, MI, MS, NV, NJ, NY, OH, TN, UT, WA & WI. In all other states taxes are collected by the state typically at the time of registration. Please call us for detailed information regarding sales tax remittance on your individual buyout situation."


EDIT - Nevermind...looks like you already got...congrats! Best of luck on the buyout. Id start the buyout process as soon as the account is active on KMF. No reason to give them 3 months rent in any case.

 

[Joseph Spiegel]

I

Curious, which dealer in AZ...i dealt with almost all of them.

Not certain on the AZ tax. I live here and everytime i have purchased a car out of state, i have always handled the tax directly with the local AZ DMV. Bring them the bill of sale and you pay the tax with the registration. I have "financed" with an out of state dealer as well and during that transaction, the dealer did properly collect and pay the AZ tax. The line item clearly stated AZ SALES (x.x%).

Personally i would try to get them to charge the proper tax as getting a refund may be less than ideal. Especially given the way i have seen Kia and KMF handle all the transactions with regard to my account. Just my two cents.

For the buyout, tax collection is a different story as KMF will collect in some states and will not in others. here is the note from the buyout quote section of KMF...i dont see MN on the list so expect to pay tax again during the buyout...

"*sales tax is collected by HCA in the states of AZ, CA, CT, ID, KS, ME, MI, MS, NV, NJ, NY, OH, TN, UT, WA & WI. In all other states taxes are collected by the state typically at the time of registration. Please call us for detailed information regarding sales tax remittance on your individual buyout situation."


EDIT - Nevermind...looks like you already got...congrats! Best of luck on the buyout. Id start the buyout process as soon as the account is active on KMF. No reason to give them 3 months rent in any case.

I’m in CA not AZ.

 

[Mach_Tuck]

I


I’m in CA not AZ.

oops...i thought i read you were looking to buy from an AZ dealer...

 

[EBdiesel08]

From the research I’m doing on the forums here, reading online, and YouTube. Do I have this correct...

So let’s say whatever stinger I try and lease, let’s say the gt it costs 30k. I can negotiate the price of that price to reflect a market value, so let’s say 27k. Then take away the lease offers, which I see are around 5k. So I would basically be starting off at 22k and then they’ll give me the residual value. Sorry if this example is terrible and quick, I’m going tomorrow morning to see if I can get one.

 

[NYLAWBIZ]

From the research I’m doing on the forums here, reading online, and YouTube. Do I have this correct...

So let’s say whatever stinger I try and lease, let’s say the gt it costs 30k. I can negotiate the price of that price to reflect a market value, so let’s say 27k. Then take away the lease offers, which I see are around 5k. So I would basically be starting off at 22k and then they’ll give me the residual value. Sorry if this example is terrible and quick, I’m going tomorrow morning to see if I can get one.

What do you mean that, "and then they’ll give me the residual value"? If you are doing a lease/purchase, the residual value is only relevant in that you will pay sales tax on that portion of the purchase price when you buyout the lease (in NY, you pay sales tax up front on the total of the monthly payments scheduled to be paid on the lease, upon entering into the lease, and then sale tax on the residual when you buy out the lease).

 

[Mach_Tuck]

What do you mean that, "and then they’ll give me the residual value"? If you are doing a lease/purchase, the residual value is only relevant in that you will pay sales tax on that portion of the purchase price when you buyout the lease (in NY, you pay sales tax up front on the total of the monthly payments scheduled to be paid on the lease, upon entering into the lease, and then sale tax on the residual when you buy out the lease).

Residual doesnt mean anything for a lease then buyout. The buyout is all based on Adjusted Lease Balance as described in the Lease Agreement. Read the first post as it explains it all.

 

[NYLAWBIZ]

Residual doesnt mean anything for a lease then buyout. The buyout is all based on Adjusted Lease Balance as described in the Lease Agreement. Read the first post as it explains it all.

Except the residual is the basis for the sales tax that will be collected when the lease is bought out.

 

[Mach_Tuck]

Except the residual is the basis for the sales tax that will be collected when the lease is bought out.

Ok, i suppose it depends on "how" the tax is collected and when. Otherwise, the residual IS included as part of the Adjusted Lease Balance. If you have already paid a lump tax upfront, then i would agree that the RV would be used for the a tax calc.

For AZ, where i did mine, you only pay tax monthly on a lease so i paid full sales tax on the adjusted lease balance which included the residual.

 

[cars2see]

does anyone know what the current lease deal is on a stinger gt,gt-1,gt-2?

 

[Mach_Tuck]

check autobytel or just go to Kia website and look through the lease options on the build and price area.

 

[MerlintheMad]

I've read this entire thread. In the midst of it, I called KMF to ask if my lease allowed the buyout to avoid the unpaid balance on the lease rent. She said no. On buyout the unpaid balance would be added onto the price. So, no early buyout for me. I leased in the first place to give myself the option to lease something new in three years: who knows what is going to be available in Stingers in 2021? I might not even be satisfied with this particular car by comparison, and it would be a bummer if I wanted to upgrade at that time, and I had a used car to sell (selling cars has never been one of my things). If the buyout was going to save me significant money I'd be tempted to do it right now: because I really, really, really enjoy this car after almost three months (and the one negative about leasing has always been the limited annual miles). But if I still feel the same way in 33 months, I can opt to buy then, at much reduced sales tax than I'd have to pay today. And when that day arrives, I plan on paying cash for the option to buy (thus avoiding any further interest). The gal on the phone from KMF said that it looked like if we did the buyout right now we would actually lose money, compared to waiting to term and then paying cash.

 

[Mach_Tuck]

I've read this entire thread. In the midst of it, I called KMF to ask if my lease allowed the buyout to avoid the unpaid balance on the lease rent. She said no. On buyout the unpaid balance would be added onto the price. So, no early buyout for me. I leased in the first place to give myself the option to lease something new in three years: who knows what is going to be available in Stingers in 2021? I might not even be satisfied with this particular car by comparison, and it would be a bummer if I wanted to upgrade at that time, and I had a used car to sell (selling cars has never been one of my things). If the buyout was going to save me significant money I'd be tempted to do it right now: because I really, really, really enjoy this car after almost three months (and the one negative about leasing has always been the limited annual miles). But if I still feel the same way in 33 months, I can opt to buy then, at much reduced sales tax than I'd have to pay today. And when that day arrives, I plan on paying cash for the option to buy (thus avoiding any further interest). The gal on the phone from KMF said that it looked like if we did the buyout right now we would actually lose money, compared to waiting to term and then paying cash.

NONE of what KMF told you is correct...

IF you buyout the lease now, RENT is NOT charged. I can tell you this with 100% certainty having done this myself. I am also the OP that posted this and work with contracts for a living...the lease agreement (contract) clearly defines what is owed with a buyout prior to maturity. it is called Adjusted Lease Balance and DOES NOT INCLUDE remaining rent.

Tax is another story and depends on the state and how the state taxes a lease. That is up to you to know and is probably worth a call to the DMV and not KMF to find this out.

This is from the buyout page on KMF...
"*sales tax is collected by HCA in the states of AZ, CA, CT, ID, KS, ME, MI, MS, NV, NJ, NY, OH, TN, UT, WA & WI. In all other states taxes are collected by the state typically at the time of registration. Please call us for detailed information regarding sales tax remittance on your individual buyout situation."

I am assuming you are in UT based on location. That being said, the buyout amount shown on the KMF Buyout Page would INCLUDE sales tax.

KMF rep does not have a damn clue what is going on. Even if they did, not sure they would tell you otherwise. Any company makes money on the lease via the RENT charge. that is the only way they can "afford" to give lease cash deals. That is the true price you pay to lease and have a new car every few years if you want that route. If you intend to keep this car, then buyout sooner than later is best option. The longer you wait the more RENT you will pay.

 

[MerlintheMad]

What was that I read above, about lease contracts being "typically" set up that way? But some are set up so that you are stiffed with the unpaid rent balance? I'm assuming that the KMF rep was telling us how our lease is configured. Maybe somebody else in my place would have figured that out before signing and refused to allow that. I'm admitting that I didn't read the contract in any sort of lengthy detail. So how can you be one hundred percent sure that the unpaid balance on the rent is not charged? It wasn't charged on your lease buyout apparently. But if I can't trust what KMF says, who else am I supposed to go to, to find out if that c. $5,500 is going to be "forgiven"?

 

[MarkyMark]

NONE of what KMF told you is correct...

IF you buyout the lease now, RENT is NOT charged. I can tell you this with 100% certainty having done this myself. I am also the OP that posted this and work with contracts for a living...the lease agreement (contract) clearly defines what is owed with a buyout prior to maturity. it is called Adjusted Lease Balance and DOES NOT INCLUDE remaining rent.

Tax is another story and depends on the state and how the state taxes a lease. That is up to you to know and is probably worth a call to the DMV and not KMF to find this out.

This is from the buyout page on KMF...
"*sales tax is collected by HCA in the states of AZ, CA, CT, ID, KS, ME, MI, MS, NV, NJ, NY, OH, TN, UT, WA & WI. In all other states taxes are collected by the state typically at the time of registration. Please call us for detailed information regarding sales tax remittance on your individual buyout situation."

I am assuming you are in UT based on location. That being said, the buyout amount shown on the KMF Buyout Page would INCLUDE sales tax.

KMF rep does not have a damn clue what is going on. Even if they did, not sure they would tell you otherwise. Any company makes money on the lease via the RENT charge. that is the only way they can "afford" to give lease cash deals. That is the true price you pay to lease and have a new car every few years if you want that route. If you intend to keep this car, then buyout sooner than later is best option. The longer you wait the more RENT you will pay.

100% Agree. People can say all sorts of things on the phone, and either:
A. Not know what they are talking about.
or
B. Know what they are saying and are instructed to do so to discourage early buyouts of leasing the Stinger.

They can't charge you Rent on an early buyout.

Think of it this way:
– When you get a car loan, you can pay it off early, by paying off the principal. You are NOT charged interest on paying off the principal. That is illegal.
or
– When you get a mortgage, you can also pay off the principal and again, the bank cannot legally charge you interest on paying against the balance early. I personally saved over $60,000 (over the remainder of the term) by paying off my mortgage early. I didn't say "Hey, I want to pay off my mortgage, but charge me 10yrs x all those monthly payments w/interest please." Uh no. I get an actuary table, and validate the Bank just gave me the remaining principal charges and boom - done.

A lease is - 100% - JUST ANOTHER TTYPE OF LOAN. A costly, complicatedly structured loan, but none-the-less a loan. The CAR, not money, is what is loaned to you in a car lease. Once you pay them the balance for it, you give the car back - loan paid off with interest. You can then purchase or walk way.

NOW: If the person at KMF thought you were speaking to paying off the 36 month term only, and not buying out the entire car, then yes, you must pay the total stream of those 36 months payments with the interest/rent built in. HOWEVER, if you are buying out the car entirely in cash or a loan from another bank, etc... and they understood you are doing a buyout, residual and all, then no, they cannot charge you rent.

I'm sure dozens of people on this blog (and others) can show you their paperwork, their legal contract, and how the Lease Cash pays off if you go the least to buyout route.

And no. KMF would rather NO ONE ever do this!!! And few people do.... However, it seems quite popular with the Stinger, due to the fact Kia's Money Factor is close to insanely high. Of course to offset that rate, they provide a healthy dose of Lease Cash to re-aqcquire over the term.

As a result, it appears many people are taking advantage of the large lease cash offerings, purchasing their Stinger via the lease program. I'm sure KMF is NOT happy with the amount of people doing this, but they are offering this, so hey, take advantage of what people offer. Nothing unethical about that at all.

Good luck!