Buy out strategy

Ask the Hackrs
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1

Close to signing on a deal but wanted to informed on the buy out strategy.

Selling cost: $40,497
36 months/10k miles per year
MF: .00155
Residual: 51%/$30k
Adjusted cap cost: $43k
License, registration, fees: $1,800
Monthly: $490

Likelihood for me keeping the car is high. I’m leasing due to the extra incentives that Hyundai is providing at $7.5k. I would like to be thoughtful in my buy out.

Early buy out?

  • no way im paying ~$43k out of pocket, I would rather keep it in my investment portfolio. I know refinancing is an option. I have an excellent credit rating but looks like rates are as high as 7%+

Wait when rates are better?

  • if Im understanding correctly, buy out is residual cost at the end of my lease life. Or buy out mid cycle is whatever my monthly payment’s depreciating value - cap cost?

The money factor looks good. So am I wrong to wait it out to see if rates reduce some? Anyone else had luck refinancing with their auto maker with good rates?

2

Pretty useless info/request without the model, but clearly a Hyundai PHEV or BEV with the $7.5k. That $490 a month seems high on a “selling cost” of $40,497 and we don’t what the amount off of MSRP is as opposed to incentives, etc.

Anyway, why would you want to immediately buy out and own any Hyundai let alone a Hyundai PHEV or BEV after the warranty was up?

If you want to be “thoughtful” on your “buy out” then don’t think about buying it. Work out a better lease deal and drop if off with the keys in it at the Hyundai dealer when done and never look back.

3

Its a Ioniq 5 Limited AWD.
MSRP- $60k
Reduction off MSRP - 4k
Rebates- $15k

The lease rater said it was a good deal at 10 years.

The warranty is pretty good at 5 year 60k miles and 10 yrs on the powertrain. Aside from some ICCU failures the model is holding up really well.

4

First things are first: get the best lease deal possible.

You are in Oregon, so contact @Jeff_BeachCitiesAuto as he can likely get you a better deal. You can either drive to NorCal or fly to SoCal to get the car if so.

5

What is the MF on the lease?

I doubt you want to keep the car in 3 years. There will be too many advances in EV technology by then, likely making this vehicle obsolete.

6

We have a Niro EV right now and its been 4+ years and ongoing!

MF is .0018 sounds like that has room to move down.

7

People keep saying this without any evidence

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8

$490 for Ioniq5, I’ll take Genesis GV60 or 70 instead.

You should get this down to $300-350.

Your buy out strategy is ground them n pick it up when they sell it as pre-owned.

9

Would you buy a used Audi e-tron or even a Audi GT RS at this point? The Ioniq5 will be a viable EV in three years, but it will likely not be worth the residual value at buy out. If the OP buys it out now, he assume to residual value risk, but maybe he does not care. 2022 Hyundai Ioniq 5s have asking prices in the mid-$20K range. Maybe somebody can look up the MMR to confirm.

I think the OP would be wise to lease with the intent of returning it in 3 years. He can decide to buy out after seeing where the market is for these vehicles then.

My guess is Hyundai eventually has to offer higher incentives to move these units. Look at some of the rebates offered last year on the remaining 2024s for guidance. The absolute worst thing that could happen is Hyundai dropping prices for these like Tesla did.

1 Like
10

Years isnt a measurement of if something is a good deal or not

11

Would one buy a used Audi EV, or would one buy out their current Audi EV? I think those are two different questions…

12

It’s a Limited. IDK if I’ve ever seen one that cheap.

What kind of discount would that require?

13

That’s apples to watermelons, and I’ll explain why from personal experience. There’s a ton more liquidity in the private party market below ~$25,000 than there is above.

The more pertinent question is whether owning for six years costs substantially less than two consecutive leases.

And that’s assuming the second lease costs the same as the first one. Which it very well may not. The current geopolitical situation is probably the best one-time “get out of jail free” card for publicly traded OEMs to take a non-recurring charge against their earnings to retool, write off and pivot away from BEV production because demand was less than expected.

So we are very likely to see a correction of the supply/demand imbalance that has led to cheap lease deals.

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