A couple dealers I’ve been working with have told me that my lease proposal takes them too far below invoice after Kia’s lease cash incentives so they can’t do it. However, I thought lease cash was a rebate from the manufacturer to the leasee which is then kept by the dealer, so it won’t affect the dealer’s profit (other than the lost interest).
I might be doing my math wrong, but my calculations indicate the dealer would end up with ~5% or more over the invoice cost depending on holdback and actual residual value after selling it at lease end.
Is this a ploy, or am I leaving too slim of a profit margin?
Vehicle is the 2018 Kia Niro EX with Graphite Touring Package
Invoice Price: $27,992
There is only a certain amount of money the dealer has to make the deal (ie how much discount he can give). In theory the dealer paid invoice so they can sell at invoice to “break even”. But a lot of times they can discount below invoice because there is extra incentives the dealer gets. Say he will get an extra $3k when they sell the car. So now the break even is invoice minus 3k. If you ask for 5k below invoice then the dealer is actually losing 2k. Makes sense? (Numbers for example only)
The residual has nothing to do with the discount you can get.
Keep in mind you’re dealing with Kia dealers, along with FCA dealers they are pretty terrible to deal with. Bottom feeders that prey on uneducated buyers with marginal credit. Unless this thing leases well, which I doubt, there are better lease deals out there than Kia.
I don’t understand this. Are you saying you have calculated dealer profit based on what they could sell it for at lease end?
Your calculator shows 14% dealer discount. That seems way too much for a new model with such a modest MSRP. You say invoice is $28k but you put in a .25.5k sale price. Where is that extra $2500 supposed to come from?
You need to go to edmunds and figure out all the incentives, keep the incentives separate from the selling price. I’d imagine a discount of 10% is probably max you’ll get before incentives are applied. This isn’t rocket science. The tricky part about Kia and I’m not sure if they still do it, but the use to, are the unit bonuses. If the store hits certain unit numbers, they get extra money back from Kia.
