First-Time Lease – Kia K4 GT-Line (Need Feedback)

[hktjoe]

Hi everyone,

I just received a lease contract for a Kia K4 GT-Line (Non-Turbo) with the Red Interior Package, and I’d appreciate your feedback. Here are the details: Contract also attached

• Selling Price: $29,035

• Money Factor: 0.00231

• Residual Value: 64%

*** Miles ** 15,000 miles/year

• Monthly Payment: $453.88

• Lease Term: 36 months

• Location: Oklahoma (Zip: 73523)

• Incentives: $1,000 rebate applied

• Free Delivery: Dealer is 2 hours away

From my research on Edmunds, the money factor, residual value, and rebate seem normal. However, when I ran the numbers through a lease calculator, my estimated monthly payment should be around $390, yet the contract shows $453.88. The rent charge is $4,108, which I believe is the interest based on the money factor.

Itemized Breakdown:

A. Gross Capitalized Cost: $31,814.80

• Vehicle Price: $29,053.50

• Sales/Use Tax: $1,261.58

• Dealer Doc Fee: $699

• License Fee: $150

• Acquisition Fee: $650

B. Capitalized Cost Reduction: $1,000 (rebate)

C. Adjusted Capitalized Cost: $30,814.80

D. Residual Value: $18,542.40

E. Depreciation: $12,231.68

F. Rent Charge: $4,108

G. Total of Base Monthly Payments: $16,339.68

H. Base Monthly Payment: $453.88

Concerns & Questions:

1. Purchase Option Fee: The contract lists a $300 purchase option fee, though the dealer says they don’t collect it now. I’ve heard Kia waives the $400 turn-in fee if you buy the vehicle at lease-end, but with this fee, it seems like it’s not really waived. Is this normal?

2. They noted in the contract, total of payments $17,739.68 (Total monthly payments 16,339.68 + turn-in fee $400 + rebate $1000). Does this seem reasonable?

3. GAP Coverage: The salesperson mentioned the lease includes GAP insurance, but it turns out to be a GAP waiverinstead. Any difference I should be aware of?

4. Money Factor & Rent Charge: Given my calculations, does the rent charge ($4,108) seem too high? Could I be missing something?

This is my first time leasing. I’ve done a lot of research through this forum and YouTube, but I’m still a bit nervous. Any feedback on whether this is a fair lease and any red flags I should watch out for would be greatly appreciated.

Thanks in advance!
Contract.pdf (170.1 KB)

[max_g]

@hktjoe

This is my first time leasing. I’ve done a lot of research through this forum and YouTube

What almost none of those sources will emphasize is that lease hacking is all about starting with selection and timing.

Is this car hackable as of today?

[delta737h]

@hktjoe

when I ran the numbers through a lease calculator, my estimated monthly payment should be around $390, yet the contract shows $453.88.

I manually confirmed all calculations in your lease contract except sales tax and accepted that as a given. I suspect it should be calculated as 4.5% x (29053.50 - 1000) = 1262.49 (close but something may be missing). The 453.88 payment in your contract is correct. You may want to double check your calculator inputs. You didn’t post your LH Calc nor your sales tax rate nor the MSRP. So, I don’t know what you did.

@hktjoe

The contract lists a $300 purchase option fee, though the dealer says they don’t collect it now.

Why would they collect it? You owe it only if you purchase the vehicle during the lease or at lease end.

@hktjoe

I’ve heard Kia waives the $400 turn-in fee if you buy the vehicle at lease-end, but with this fee, it seems like it’s not really waived.

It’s at the discretion of Kia. Normally, if you lease or purchase another Kia, they may waive this fee, but they are not obligated to do so. See Section 23(E)(1). However, if you purchase the vehicle, the turn-in fee is waived, and you’ll pay the PO fee instead.

@hktjoe

They noted in the contract, total of payments $17,739.68 (Total monthly payments 16,339.68 + turn-in fee $400 + rebate $1000). Does this seem reasonable?

It complies with the terms and conditions of your lease contract. However, I do have some concerns…

1. The MSRP is 18542.40/.64 = 28972.50… so something is a little off. It does appear that your sell price exceeds the MSRP. COVID is long gone. Don’t know what these cars are selling for in your market, but the SP seems very high.
2. The MF = .00231 seems high to me.

@hktjoe

GAP Coverage: The salesperson mentioned the lease includes GAP insurance, but it turns out to be a GAP waiverinstead.

Read Section 25(B). The GAP feature waives the total loss early termination charge if certain conditions are met.

@hktjoe

Money Factor & Rent Charge: Given my calculations, does the rent charge ($4,108) seem too high?

Yup… by about $0.04.

Monthly Rent Charge = .00231 x (30814.08 + 18582.40) = 114.11
Total Rent Charge = 114.11 x 36 = 4107.96

You’re right. This reflects the total interest paid over the term of the lease.

??? Let me know.

[hktjoe]

Thanks for taking the time to review my lease contract. I really appreciate the detailed breakdown.

• Lease Calculator Discrepancy: I’ll double-check my inputs, as you suggested. I didn’t include my LH calculator breakdown in my post, so I’ll go back and verify everything, including the sales tax rate. The 4.5% tax calculation you provided seems close, so I’ll revisit that as well.

• Purchase Option Fee: That makes sense. I was just making sure there wasn’t anything unusual about the way it was listed in the contract. I understand now that it’s only applicable if I choose to buy the vehicle.

• Selling Price vs. MSRP: I checked with multiple dealerships in my area—this is actually the best price I could find. Out of the five dealerships I contacted, this is the only one that isn’t marking up the vehicle by several thousand dollars or inflating the money factor beyond the standard rate. Given the market conditions here, this seems like the most reasonable deal available.

[paranoidgarliclover]

I assume you also posted on Edmunds about the same model. Edmunds says that the lease cash is $500…?