Hi there, first post on the forum & hopefully in the right section…
My wife’s Kia Sportage 4-year lease is coming to its end in early April (1 payment left) and she’s thinking of getting a Mazda CX-5 as her next car. We live in DFW, TX area. I haven’t leased before so am trying to figure out what to do.
A couple of weeks ago our local Mazda dealer sales guy took a look at the Kia and offered to have its value checked and any equity (it’s in good condition and has low mileage) rolled over into a potential CX-5 lease. The sales guy said it didn’t matter that we would not return the car to Kia. I haven’t leased before so don’t know if this is right but the lease contract didn’t seem to specify anything particular regarding this.
For reference, I think my wife’s Kia lease deal is not great (in fact, I think she got ripped off - paying around $360 per month and that’s after hefty initial payments). It also includes a $400 return fee which would be waived if my wife took another Kia on after this.
Our thinking was to let Mazda value the car and if there was equity, negotiate on a new CX-5 deal, leaving the Kia at Mazda, maybe even some time before the lease term end (if there are no penalties in the current contract). If there was no equity, we would just wait until the lease end and leave the car at Kia, while negotiating a new deal with Mazda.
Have I missed anything critical? Is the equity check and potentially early return a good idea or a recipe for disaster? or should we just keep the Kia until then end? Further, should we consider valuations at Vroom/ Carvana/ what have you…?
Thanks for your help - it’s all a bit new for me since in my home country (Finland) car leasing barely exists and is much more standardized compared to the US.
May be challenging to nego the deal before discussing the trade-in but just keeping the two separate should help as long as we ensure that the dealer’s equity value assessment is fair.
I will probably resurface in another forum section once we have received an actual lease offer - meanwhile I’ll try to understand the nuts and bolts of the calculator and make sense of what rebates/incentives are tax deductible and to whom, who originally decides on the MF, etc…
You should absolutely shop your Kia around! If you can sell your Kia right now to any dealer besides Kia for less than 760 difference on your payoff you are effectively making money. That’s the simple answer. There’s a thousand nuances that need to be determined before you sell… one of the more important ones is that you are getting a good deal on the Mazda lease as well. Work with them on the price point of the Mazda before you even consider the trade in value of the Kia, as they can lease their Mazda to you at a lower point if they know that they are screwing you on the Kia trade.
My first Kia lease happened quite like your wife’s, it was a high lease payment for what the car was. They were hoping I’d come back and turn the car in, because the residual was so low. I ended up selling the car at car max, for 5 thousand more than what the residual was. So yes, try vroom, car max, etc to see if you can get out if turning it in and make a little money while ending your lease. When you check the payoff amount in Kia financial services keep in mind that they include tax, and typically if you sell the car to a dealer(like vroom) the tax is not applied to the payoff amount.
Thanks! This is encouraging and very useful - I’ll be sure to check out Carmax, Vroom and Carvana before we talk to Mazda. It appears at least the Carmax process might be quite straight forward.
Regarding taxes, we are in Texas and hence my impression is that my wife has amortized the sales tax on the entire value of the car during the lease period, which I suppose should (?) mean that Kia’s payoff/buyoff (residual) value would exclude any sales tax, to avoid double-taxation. And I suppose Carmax’s would too (unless their fine print says otherwise).
It seems like the dealer may just be trying to buy out the car from the lease. I agree with the need to get some quotes to see if you may have any equity in the car.
CX-5 is a nice car as well. Did they send you a deal? That way, we can try to help out some more.
A quick update: obtained quotes from Carmax and Vroom, turned out there was no equity (this has made me scratch my head since the mileage was clearly below the contract i.e. 4*15k in the contract, vs. 29k actual) and good condition. Oh well!) but the Mazda dealer offered to buy it out and take care of the 400$ disposition fee with Kia.
We ended up leasing a 2020 CX-5. Deal was ok, I suppose, but not great. Shopped around, contacting a handful of dealers and ended up at $350 all-in per month, 36month/10k per year. Zero discount (I know, I know! and I didn’t manage to convert an additional sales incentive into lease incentive) and I reckon I could have squeezed some out eventually but since we had time pressure and I wasn’t even there in person, we went for this deal. I did also know form other sources that Mazda doesn’t usually provide big discounts anyways so didn’t feel too bad about it. And having broken down the cost, used the calculator with the MF and residual and incentive intel from Edmunds, it felt “good enough”.
Key deal metrics:
MSRP (= sales price) 29,150
Customer cash (tax rebate) 1k
MF 0.000010
Residual: 57%
Acquisition fee: 595
Government fees 203 (from memory)
Documentation etc: around 150-180 (again, from memory)
Sales tax (6.25%; note this is in Texas so gave around 1730 minus the above rebate)
I know Volvo XC40 could have been had for ca. 2500-3000$ more during the lease term but wife preferred the Mazda. I’ll be on the market myself in a few months’ time and looking at X1, XC40 and the likes so hopefully that’ll be more interesting and I can run a more comprehensive sourcing process once I’m actually around…
PS. small note regarding the Volvo dealers (not going to name names) but compared to the Mazda dealers, they were much less responsive, sent botched quotes etc. (I gave up after requesting changes twice, after having been sent quotes for wrong cars - come to think of it, I don’t think I ever received a quote for the vehicle I inquired about!) Maybe XC40 leasing is not worth their precious time but I was disappointed, especially since I’m Nordic myself and wanted to like the Volvo & “experience”. Luckily there seems to be at least one very competent broker (@IAC) on this forum who works with the brand and was a pleasure to deal with, answering my various questions etc., when I first contacted them. When I’m on the market imminently, I will definitely be involving them in the process.
I would not be able to answer that but you can go into their website and get a quote within minutes, this way you can compare it with what carmax is giving you. I sold my civic through Carvana and the process was seem less fast and easy!!
