Ioniq 5 Buyout Calculation

Ask the Hackrs Buy/Finance
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1

I’ve negotiated with multiple dealers in the Denver, Colorado area and they’ve individually agreed to discount and Ioniq 5 Limited from $2,500 to $3,000 depending on dealership, plus the $7,500 credit for leasing.

Three different dealerships Finance/General Managers told me my buyout would be the residual plus all remaining payments, including all the rental charges, etc… and this is why I’m asking y’all for input.

I’m going to use some hypothetical, but very close to real, because I’m looking at leasing several Ioniq 5 Limiteds for my company.

(2023 Ioniq 5 lease for 36 months/10,000 miles with a 56% residual factor, .00248 money factor, $0 down, registering in my company’s name in the state of Montana at 0% tax.)

$58,750 MSRP
$2,750 discount
$56,000 purchase price
$7,500 rebate/incentive
$48,500 capitalized cost
$32,900 residual
$15,600 “principal”
$650 monthly payment

If I were to buyout after 1 payment, roughly, what would the buyout amount be? (Don’t include any fees/taxes, as I can easily at those back in)

My hesitation is, as I said above, they’re all claiming my buyout would be $32,900 + $22,750 (35 × $650) = $55,650. That means I paid $56,300 including my first payment… I even called Hyundai Motor Finance, and they said the dealerships are correct.

Thank you!

2

Your lease agreement should spell out the formula.

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3

Tell them to learn to read their contracts.

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4

We’re not even at that stage, after being told this, I completely backed off. I did speak with one member of the forum here, and he explained it the way I think it is. Would you happen to have a copy of their contract? If so, could you send that?

5

Ask the dealers youre talking to for a copy of a sample contract, so you have one for your state from the dealer youd be buying from. Im sure we could find one posted on here from another state/older, but thatll be the most applicable to your situation.

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6

Thank you for bringing that up, I just got off the phone with them, and they are emailing me one. I’ll post that, for others for future reference.

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7

Thank you for bringing this up as well, just got off the phone with the dealer, they’re going to email me their agreement. I don’t know why I thought about this first. Just got so furious after dealing with these guys, lost sight of gathering Intel.

8

If you think this is bad, go into a Kia dealership. :slight_smile:

Good luck with your decision!

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9

Part of the issue is most contracts have an early termination clause and an early buyout clause. What theyre describing is correct for the early termination clause.

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10

Because they’re going to be charged-back when you buyout the lease, and they’d prefer that either you don’t or at least wait until after their chargeback window.

And they’re probably more accustomed to be asked about

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11

@jeisensc @mllcb42

I just got the agreement, and I cropped out the section for the buyout, and the calculation. I would greatly appreciate it, if you would walk me through using my scenario above?

Hyundai Lease Purchase Option Before Maturity
Hyundai Lease Purchase Option Before Maturity2176×317 272 KB

Hyundai Adjusted Lease Balance
Hyundai Adjusted Lease Balance2176×198 153 KB

12

The adjusted lease balance is what defines your buy out. This is where it is defining that the adjusted lease balance starts life as the adjusted cap cost at lease inceptioj and then reduces it monthly by the depreciation portion of the payments.

This just confirms that the buyout is not the remaining lease payments.

13

That’s exactly how I understand it to be as well after seeing the agreement.

Okay, not sure why this has me so spooked, so you’re agreeing that it’s safe to lease and I’m not going to be charged what the finance and general Manager were claiming they were going to charge, the entire kit and kaboodle, whatever hell that is!

14

Id be willing to bet that none of them have ever actually read the terms and conditions of the lease contract and buyouts of leases are usually so far removed frok their involvement, they dont need to know what it says.

There have been quite a few people that have done these lease to buy transactions and theyve all came back the same buyoit formulas.

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15

Thank you, If you’re ever in Denver, I owe you a beer, or down in Santa Fe, a margarita!

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16

Dealer’s core business is selling cars, not buying out consumer leases, and it’s a common sales technique to appear authoritative with information even when you really don’t know what you’re talking about. With the first “I’m not sure,” you start to lose confidence and the deal is at risk.

Also perhaps counterintuitively, among the very worst information I’ve received about how credit scoring (and the credit industry in general) works is from people who work for credit unions, banks and mortgage companies.

They absolutely know the minimum score required to get you approved, or to qualify for certain terms, but their life experience with how credit score algorithms work comes from the same worthless emails and information you (and they) get from Credit Karma.

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17

Sorry to jump in here but so can someone provide the full calculation for the OPs situation as to what he/she would end up paying after the first payment? I am not clear on what the actual cost would be? I am trying to figure out and working on a similar deal…here in DMV region.