[Deal Check] Ioniq 9 SEL: 24m/10k one pay 11k; $458 effective monthly & Out-of-State Registration Question

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1

Can someone knowledgeable help me vet this deal and the calculations involved?

MSRP: $69,105

Dealer discount: about 8k

24m/10K - Residual: 71%

MF: 0.00201 (~4.82% APR)

My SoCal tax rate: 10.5%

I am in CA (paying 10.5% sales tax) and trying to lease an Ioniq 9 SEL from a Oklahoma dealership. The deal can be improved (e.g. MF is marked up, high MSRP ($69105) due to dealer options, $609 doc fees), but it is the car I want and the final price is within my target price range. I got a bit carried away and asked to do a one-pay lease for 24/10k. The final payment is about 11k.

While the dealership promised verbally that the lease covers all the CA registration fees and taxes, and they will handle everything, I later noted they were not confident about the execution and reluctant to commit in writing. I also realize if they calculate the CA tax and fees wrong and/or are incompetent to get the paperwork done right, I could have invited myself a ton of trouble afterwards (I plan to ship the car across country)

So now I am in a limbo. I want this car, but I don’t want the potential problems associated with it. With tomorrow (April 30) being the end of the month, should I sign this deal now, tell dealership to make corrections and get Hyundai Motor Finance approval ASAP, or just get the car at a higher price locally?

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2

If the dealership hasn’t processed CA registrations before, it may take a lot more time. Once the car is physically in CA, dealership will send you paperwork and you’ll need to get it VIN-verified at the DMV or by a LOE. You send the completed paperwork back to the dealership and they (or a runner) will send it to the CA DMV. Could take much longer, depending on the experience of the dealership/runner.

you couldn’t find a similar vehicle in CA? We have so many brokers servicing the largest car market in the country :grin:

3

Thank you. There are many dealers and brokers selling Hyundai Ioniq 9 in SoCal, but the price is not close. Locally I can only find ~$3000 dealer discount in March (and seemingly less in April as dealers told me EV demand went up) whereas this OK dealer offered $8000.

The dealership just wrote in email confirming that they will cover and handle CA registration. I think they are acting in good faith, but it is true that they have not done CA registration before.

4

Sales tax looks correct, registration fee is wrong. They’re charging for a temp tag but no registration fees. Probably short $1000 or so.

Also, dealer options don’t increase the MSRP, they just increase your selling price.

5

I took a leap of faith and signed the deal after they confirmed in email that they would cover CA registration. Not sure what would happen next :neutral_face:

MSRP increased because of white paint, cargo organizer, etc. Perhaps “options” is not the right word to describe them

6

There is an important distinction here.

White paint is a factory installed option that does increase the msrp. That means it also increases the residual value, so you only pay a portion of that increased cost since it is residualized.

Dealer installed options just get tacked on to the sales price since they’re not residualized. As such, you pay the full cost of the option (plus rent charge and tax on it).

You’ll pay significantly more out of pocket over thr lease term for a dealer installed option than you do for a factory/port installed option.

7

I would be prepared for a ~$1000 increase in cost. I would be shocked if they just ate it without at least trying to get you to pay it.

8

All I know is that the car has a higher MSRP on its window sticker because of a list of things that include white paint, cargo organizer, floor mat, etc. I suppose they all count as factory installed options as they increase the residual too

Yeah I suppose there will be more exchanges with the dealership later regarding CA registration…Let’s see how much they would honor their email confirmations. But one headache at a time. For now I am going to focus on shipping the car to SoCal to meet life’s demand

9

Congrats. Seems like a good deal.

10

I signed and paid a one-pay lease for an Hyundai ioniq 9 at the end of April. [Deal Check] Ioniq 9 SEL: 24m/10k one pay 11k; $458 effective monthly & Out-of-State Registration Question

Because the lease is out-of-state with an OK dealership, paperwork takes longer and i don’t think the deal has been funded yet by Hyundai Motor Finance (HMF) (or does HMF fund only after the car is taken delivery?). In the meantime, I noticed two things that made me wonder if i should call the dealership first thing on Monday morning for rewriting the contract under the May program, while correcting the numbers in an honest way, and getting a win-win. The two things are:

(1) The lease agreement i signed miscalculated CA registration fees. As @mllcb42 observed, it might be $1000 short, which would have to be absorbed by me or the dealership later. Since dealership promised me in emails that they would cover and handle CA registration, I really hope they will eat it eventually. But that part is uncertain.

(2) Hyundai program for the same car (Ioniq 9 SEl), same term (24m/10k) improved in May:

April:

residual:71%

One-pay buy rate: 0.00186 (I ended up getting 0.00201)

Lease cash: $9250

May:

Residual: 69%

One-pay buy rate: 0.00178 (regular buy rate is 0.00193, which might be what dealership would actually offer for one-pay. Slightly lower than April)

Lease cash: $11750 ($2500 more)

My question:

If I ask the OK dealership on Monday morning to rewrite the deal under May program, correct the CA registration fees, and refund me the difference (>1k), what are the chances that they would agree? Would they be willing to agree to rewrite on my terms (i.e. apply the May lease cash and also lower the money factor to maybe 0.00193 (which is buy rate with a 0.0015 mark-up, like they did in April)?

I have already signed and paid the April one-pay lease. Not sure if I can back out now. (I know in CA a deal can be canceled if the customer doesn’t take delivery, even if they have already signed and paid. Not sure if that is the same case for an out-of-state lease in OK).

If I can’t cancel, how much leverage do I have in this new negotiation?

Should I ask (delicately) or should I just not? :confused:

11

I think you can construct a valid argument. Unless Hyundai requires the acq fee to be capped, I see no reason why all those capped fees can’t be paid upfront. It makes no sense to cap fees when structuring a one pay lease. Those capped fees would needlessly be subject to a finance charge plus tax on the finance charge. I see this all the time. Dealers are give-a-shits and do things half-assed that needlessly cost customers more money.

Let’s structure a minimum cost one-pay lease for April. BTW, you should insist on the discounted one-pay money factor buy rate assuming you qualify.

MSRP……………………… 69135.00
Sell Price……………….. 60965.00
CCR……………………… 9500.00
Adj. Cap……………….. 51465.00
RV……………………….. 49085.85 ….. 71% x 69135.00
MF………………………. .00201 …. .. (confirmed)
Term…………………… 24
Sales Tax Rate………. 10.50%
Rebate……………….. 9500.00 …. (per contract)

Monthly Base Payment = .00201 x (51465.00 + 49085.85) + (51465.00 - 49085.85)/24
= 301.24
One Pay = 24 x 301.24
= 7229.76

Lease Inception Fees

One Pay…………………………. 7229.76
One Pay Tax……………………… 759.12
CCR Tax………………………….. 997.50
TLR………………………………… 10.00 (subject to change)
Doc Fee………………………… 609.00 (doesn’t look right)
Doc Fee Tax………………….. 63.95
Acq Fee………………………… 650.00
Acq Fee Tax………………….. 68.26
DAS…………………………… 10837.59

You owe 10837.59 instead of 10962.64. A savings of 125.05. That should cover the registration fee mistake.

I’ll leave it to you to structure May.

??? Let me know.

12

Sit back and wait.

You can go to the HMF website and try to create an account using VIN, etc. If you can actually create one, that means it’s funded.

If they’re short on money, HMF will it back and lecture them how the numbers should line up. Then the OK dealer will re-write the deal following HMF’s direction verbatim. You’ll get a new contract and be asked to sign again.

I’ll wait for a full week before freaking out.

They might try to match your monthly so that they can eat the program improvement. Whether to push back or not is up to you.

13

Thanks! I just checked on HMF and it seems the deal is not funded yet.

I kind of want to take initiative and lead the contract re-writing in the case. My life demands a 7 seater soon so waiting or going back and forth is not in my favor.

Part of my questions involve evaluating if I am in a position to negotiate the rewriting, how much leverage I have, and how I should approach it with the dealership (e.g. what I should say exactly). Would greatly appreciate any tips and guidance on these fronts!

14

They won’t ship the car until the deal funds, especially OK->CA. If you wait, you could be waiting another 2 weeks; one week for the deal to fund then another week for shipping.

You could try contacting the dealer and asking them… but you should consider how far you’re willing to go. What if dealer says no? What if they are willing to unwind the whole deal? Would you split the difference in cost? Some things to consider.

15

This is what I got for the April lease if the CA titling and registration fee is more or less correctly factored in. The data and math comes from my original lease and John’s calculations kindly provided above.

The estimated CA TLR comes from CA DMV’s online info (this and this) and includes Standard Registration Fees $898.00 (including the $121 Road Improvement Fee and $28 Non-Resident Original Service Fee) + Smog Abatement Fee: $20.00 + Smog Transfer Fee: $8.00. But honestly, I don’t have much confidence in its accuracy.

April (corrected):

MSRP 69,135.00
Sell Price 60,965.00
Capitalized Cost Reduction 9,500.00 (9250+250)
Adj. Capitalized Cost 51,465.00
RV 49,085.85 (71% x Sell Price)
MF 0.00201 (marked up)
Term 24
Sales Tax Rate 10.50%
Rebate 9,500.00
Monthly Base Payment = MF x (Adj. CC + RV) + (Adj. CC- RV)/Term 301.24
One Pay = 24 x 301.24 7,229.72
Lease Inception Fees
One Pay 7,229.72
Sales Tax Rate 10.50%
One Pay Tax 759.12
Capitalized Cost Reduction Tax 997.50
TLR (corrected based on CA DMV calculations) 926.00
Doc Fee 609.00
Doc Fee Tax 63.95
Acq Fee 650.00
Acq Fee Tax 68.25
DAS 11,303.54

I paid $10,962.64 in April, but truly the dealership would need ~$11,303.54 to cover CA registration? The difference that needs to be adjusted/absorbed later is ~$340.9.

Now, if the dealership is willing to rewrite the contract based on May program and give me buy rate, I will only pay $9538.82, $1423.82 less than my original payment.
Item Value Notes
MSRP 69,135.00
Sell Price 60,965.00
Capitalized Cost Reduction 12,000.00 11750+250
Adj. Capitalized Cost 48,965.00
RV 47,703.15 (69% x 69135)
MF 0.00178 MAY buy rate
Term 24 10k/year
Sales Tax Rate 10.50%
Rebate 12,000.00 11750+250
Monthly Base Payment = MF x (Adj. CC + RV) + (Adj. CC- RV)/Term 224.65
One Pay = Term x Monthly Base Payment 5,391.51
Lease Inception Fees
One Pay 5,391.51
Sales Tax Rate 10.50%
One Pay Tax 566.11
Capitalized Cost Reduction Tax 1,260.00
CA Registration & Titling Fees (Includes RIF/Non-Resident) 926.00 estimated: Standard Registration Fees: $898.00 (including the $121 Road Improvement Fee and $28 Non-Resident Original Service Fee) +Smog Abatement Fee: $20.00 + Smog Transfer Fee: $8.00.
Doc Fee 609.00 still inflated
Doc Fee Tax 63.95
Acq Fee 650.00
Acq Fee Tax 68.25
DAS 9,534.82

This might be too good for me, and not good enough for the dealership. Maybe I can split the May program improvement so the dealership is more motivated to rewrite the contract?

16

That’s about right for CA. Usually ends up around 1.25-1.5% of msrp

17

The only way you’ll find out is if you contact the dealership and see what they say. Otherwise it’s just speculation.

Personally, I wouldn’t wait unless you have time and are willing to roll the dice, wait it out. Even after the deal is funded, the dealer needs to find a transporter and that could take time.

18

I don’t agree. The dealership is already on record for agreeing to a 60965-selling price. So, you’re half-way there. The only remaining issue is the money factor. They should have no problem giving you the discounted money factor buy rate for a single pay lease.

I would formalize your May proposal and present it to the dealer. Try to make sure that the CA TLR fees are spot on.

Good luck!

19

5/5 Update:

I emailed the dealership, requesting a contract rewrite with the formalized May lease proposal. My argument is that such a rewrite under the May program would be win-win, as dealership can use the additional $2500 rebate to cover CA TTL, and we (dealer + customers) can all avoid weeks of back and forth with Hyundai Motor Finance (HMF) (in case the April contract gets kicked back) or with CA DMV (for underfunding).

Intriguingly, the sales manager first says my calculation is based on a purchase, not a lease, and his math was right/verified. When pushed back, he insists that the April contract is already in HMF’s funding queue, and his team has already spoken with CA DMV and is in the process of getting the car registered.

I suppose he really wants to keep the car for his April sales, even if it means the dealership will absorb the costs through back-end interests? Honestly, I am okay with that, as long as the dealership handles and cover CA registration properly. I don’t get to optimize the car’s payment under May, but at least I gain some peace of mind.

Now Gemini recommends that I tell the sales manager I won’t sign the delivery receipt until I see a validated DMV fee sheet. Is that a good piece of advice?

20

The SM is full of it. He had to know that it was a lease from the very beginning. If he made a mistake, then that’s on him. Geez, he already completed a lease agreement, not a purchase agreement. The selling price is in the lease contract. What math are we talking about? We did lease calculations. If it was a purchase, the sales tax would have been based on the selling price, not the sum of the payments.

But it hasn’t been funded. Also, the CA DMV couldn’t care lrss whether the car is funded under the April or May program. It is irrelevant.

So, none of his claims make much sense.

I couldn’t agree more. So, yes, it is good advice. Who is Gemini?

I assume that the dealer will pay all the CA DMV fees. Is that correct?