Am I being scammed for buyout price at the end-of-lease?

Ask the Hackrs
1

Hello everyone,

Thanks for taking your time to have a look at my question.
So, I have a question about the buyout price that I was given by my Hyundai Dealership.

My wife had leased 2015 Hyundai Sonata, and the lease is due this October, so went into the dealership to talk about my possible option when the lease is up.

She put down $1000 as down payment and been paying $202 monthly for last 3 years, and we only drove 20k miles which is way below than 30k limit (We thought it was a great deal, so paid about $7200 during her 3year lease)

The dealer, same dealer that we leased this car with, informed us that we would be paying about $300 monthly for next 60 months, which comes out to be about $18000 with rough calculation (6% interest rate, $284.83 with $1000 down payment)

At the time we didn’t even bring any documents with us, simply was going to talk about what options we have when her lease is due.

We ended up test-driving 4 different cars and almost signed a new lease deal for 2018 Kona…Or buyout for $300 per month. Something didn’t feel right, and now I am so glad that we didn’t jump the gun for anything back at the dealership.

After we came back home, I dug up the documents, and found lease agreement form,

which stated that,

Agreed upon value of the vehicle ($21807.19)
Residual Value ($13426.35)
Also clearly stated that "You have an option to purchase the vehicle at the end of the lease term for ($13426.35)

So, why were we given a buyout price way higher than the number on Lease Agreement?
Am I missing something? Or were they just trying to play us because we weren’t really prepared?!

BTW, area is San Diego, CA.

2

Considering tax and fees and interest rates, they probably weren’t super far off.

3

Really? I don’t think so. That car should be 15000 tops out the door.

4

When you put in Taxes assuming 7.5%, $1000 roughly. Then document fees and title fees you are probably close to $15,000. Inputing 15k into a payment calculator at 6% you come out with 289.99 per month. I don’t think anything funny is going on there. I would shop for a better rate though. (assuming you have good credit)

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5

Did the dealer look up your account or just stated ~$300/month for 60 months. I’m guessing they just made up that number to make the lease deal seem better. Dealer doesn’t make any money if you buyout your lease.

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6

I think you’re forgetting interest + tax… 6% interest isn’t nothing, either.

I used $13500 as the sale price. There’s probably a “buyout fee” anyway. So, using this:
https://www.calculator.net/auto-loan-calculator.html?cloanamount=13500&cmonthlypay=380&cloanterm=60&cinterestrate=6&cdownpayment=0&ctradeinvalue=0&cstate=CA&csaletax=9.25&ctitlereg=300&cttrinloan=1&printit=0&ctype=standard&x=84&y=22

Works out to roughly $290/month, total of $17,500 over 5 years. I mean, you COULD argue about $10-15/month as getting “scammed”, but, doesn’t seem like it.

Keep in mind, over those 3 years, you paid off approx 1/3 of the car, now you’re paying off 2/3. The $1k would have added approx $27-30 to your $202 payment, so call it $230/month is what you were paying.

However, you probably got 0% interest, or close to it. With 6%, you’ll pay $2400 in interest over 5 years. That’s where the difference is.

If you can’t pay cash, or get a better loan, you’re not really going to do any better, IMHO…

7

Hello all,

Thank you all of you guys for prompt answers so far.
It seems like the numbers are not too far off. :slight_smile:
Still feeling that we are paying more for the car’s value… but it seems fair overall…

And yes, the dealer seemed pretty eager to make us to get a new lease, (2018 Kona w/ tech package for $2500down/252mo. Or $2000/267mo.) instead of buying out…

8

Did you check out comparable CPO’s? That would give you extra warranty.

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9

What does your lease contract say? Most have a residual buyout plus a purchase option fee plus sales tax. Assuming your lease goes full term, simply add the purchase option fee and the residual then, add sales tax to this sum. I believe purchase option fees are taxable in CA. So, if your purchase option fee is $350 and your sales tax rate is, say 7.50%, then your buyout amounts to…

(13,426.35 + 350) x 1.075 = 14,809.58

10

A dealer could probably get away with a processing fee. Not sure if the car has to be inspected or not- many dealers play it safe and do it. With Volvo, a CPO inspection can be done and more can be charged for the car as a CPO.

11

Can you just buy it out directly from Hyundai or they make you go down to the dealer to do it?

12

Call your bank if you are using a loan, sometimes their title department will handle all the paperwork with the lease finance company and you can skip the dealer and save money on the dealer fees. Just tell them you are doing a lease buyout.

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13

I bought my 2011 Sonata in 2013 after a 3 year lease. At the time, there was no buyout fee (there is now but not sure about 2015). I dealt directly with hyundai motor finance in the midwest regional office. There was ZERO dealer involvement in my purchase.

For the OP, i would suggest dumping your 2015 Sonata at the end of the lease. Too much risk with engine failure due to faulty design (bottom end lubrication). Hyundai’s are great to lease but i will never buy one again.

14

in FL, Hyundai doesn’t allow you to buy the car straight from Hyundai financial, they make you go through a dealership and buy it from them and then you are subject to $800 dealer fee + some other smaller fees. Not sure if this is FL specific but maybe that has something to do with it

15

That is pretty eff’d up if true. I bought out my Optima a month ago and only paid residual and tax, no fees what soever, not even for title.

16

I don’t think 2015 models were effected and even they were, having unlimited mile/15 year warranty on the engine is not so bad.

17

hyundai extended engine warranty for 2011-2014 Sonata models is 10 years and 120k miles

Kia extended warranty for Optima is 15 years and unlimited miles

18

I never paid any fees… Residual plus tax that’s it.
You have to see what used cars exactly like yours are selling for to see if it’s a good deal or not. Look at it as a separate transaction from the money you already paid. If you went out to buy one today with the same mileage, could you eadily find and get it for less?

19

Please do not buy your lease out. I think even with the amount of miles you have (20kish) there would be about 3,000 dollars difference in trade-in value vs. your buyout. The good news is you won! The car depreciated more than you paid! I also see depreciation being an even bigger problem as car tech changes more and more rapidly… So I just don’t recommend hanging on to them. See what’s out there, if you’re willing to check out sedans or hatchbacks you can do fantastic for yourself. But don’t buy it out, it usually ends up in tears for clients.

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20

We don’t actually know if the buyout is good or not because the OP did not state which model this is. A 2.4 Limited is worth about $4k more than a 1.6 eco.