I’m in Texas and I am looking to lease a Kia EV6. I drive about 16200 miles a year. I plan to buy the car at the end of the lease.
My question is does the mileage included in the lease deal really matter if I plan on buying it after the lease anyway? I know the residual changes a little depending on which mileage I select.
Since I fully plan on purchasing at the end of the lease is it better to choose a low mileage lease to pay less monthly?
Sorry to answer your question with a question, but have you already validated that it makes financial sense to lease for the full term and then buy out?
Most EV leases have been heavily subsidized, which could mean that the manufacturer has artificially inflated the residual value on this car so a dealer can arrive at a palatable lease payment.
The RV for your lease will be determined at the time of signing based on the number of miles included, but IMO it’s highly unlikely that the car will be worth that much at lease maturity, whatever that RV is, especially if you put on that many miles.
I don’t think the EV6 has changed much, are you sure you don’t just want to buy a used one now?
It doesn’t matter.
Buying out the lease is one way to avoid mileage overage charges but putting a ton of miles on an EV and then buying it out would be like setting fire to money.
Agree with posters above. I would look for a 15K EV lease and then at the end of the lease you have the option of paying a relatively small mileage overage charge or buying out the lease.
Payments will be higher for lease but you get to see what the market is in three years and can turn in the car if the RV of the car is way below market value. If so, return the car, pay the small overage penalty and then you could even buy a used EV6 and pocket the delta between the RV and the market value.
If your end goal is to own a EV6 you should buy it out immediately after leasing it and take advantage of how new car loan APRs are always lower than used car loan APRs. Ofc Texas taxes f*** up this entire thought process so without tax credits on day one any car is a non-starter.
If your goal is to avoid the fees for excess miles then that is the worst reason to buy out a EV6 lease.
It matters because your plans might change.
I am an old man and I’ve dealt with a lot of unexpected dumb shit in my life.
My goal is to have a car without payments. I generally purchase new or used and then pay it off very quickly.
I was originally looking for a used EV6. It seems around $30 to $32k for the low mileage I am looking for. That puts it in a category that keeps it out of the $4k federal tax credit for used EV. If that’s the case I will wait until the credit ends and see what the values do. Unless something perfect hits me.
I started looking new for the tax credit. Everywhere you look people advise to lease an EV (of any kind) and not to purchase. This is what brings me here. I have never leased a vehicle before. It seems with the leas incentives ($14k for Kia, $7.5k for federal) this might be a valid option. I think 7% off MSRP with the lease incentives seems to be possible in Houston. Thanks to this forum I also learned I can ask for a lender sales tax credit which I thought would help when I did buy it at the end of the lease. I am looking at 24 month leases but I wasn’t sure what would be best mileage wise or if it made a difference. I understand I will be over no matter what. The residuals are running $30k to $32k depending on mileage.
The incentives for a regular finance are $5k customer cash, $7.5k federal tax credit.
I’m here to learn about leasing and see if it’s better to pay the $9k difference between purchase or lease.
I appreciate everyone’s input.
Unless I’m mistaken, that’s not something you “ask for.” It’s either provided by the bank or it’s not.
Does the EV6 get a sales tax credit in TX?
You can also capture this by leasing the car and immediately buying it out (in lieu of paying cash you can also do a car loan for this through a bank or CU).
I am only advocating looking at this as a potential option, I’m not endorsing it for your situation or this vehicle per se. I haven’t done any analysis and it’s only 5 am where I’m sitting.
I wasn’t aware that you can lease it and then immediately buy it out.
How does that work? Where does the value for the buyout come from?
The buyout at any given time will be given on your online account.
For an immediate buyout it will be very close to your ACC (adjusted cap cost) at lease inception.
From a TX perspective, is lease and then immediate buyout even worse than lease and buyout at lease end?
If leasing first, you can’t claim the 7500 federal, you only get what KIA gives you in the form of lease cash FYI. They are the owner of the vehicle, not you.
Without the tax credit a lease may not be the best fit.
It looks like according to the calculator Kia may have an incentive on a balloon loan. “KFA Retail Balloon Bonus Cash $10270.” My understanding of a balloon loan is that I actually own the vehicle so it should then qualify for the $7500 federal tax credit. If the interest is high I would be able to pay it off immediately or refinance to a traditional loan.
Is anyone familiar with this type of loan for a car? Seems it is mainly used for houses.
There’s a whole thread about balloon loans:
And you’d be saved from the double taxation of paying tax at lease inception and again at buyout.
Yes. You don’t want to do this in TX generally
Just for loop closure, I decided to do a regular purchase of a used EV6 instead. A 2022 with only 5k miles.
Thanks everyone for the help.