The back side, which no one reads. It’s in a slightly different spot for each Bank.
What state are you in? Sales tax can really screw up an otherwise good lease/buyout deal.
California
Any tips on how to estimate the payoff amount?
RV + Unpaid Payments + Disposition (Sometimes) = The Max Amount. It’s guaranteed to be slightly less than that but without knowing your MF you can’t get the proper amount and even then it’s complicated Math to get the true number.
It’s going to be significantly less than that, as it doesn’t include the monthly tax or rent charge.
Most everyone uses the adjusted lease balance method, where the buyout is the adjusted cap cost less the sum of the applied monthly base payments.
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As you like to say to me all the time, this depends, if the lease was a super low 0.00001 then that amount is pretty low. If on the last 2 payments, it also doesn’t become significant. I said ‘slightly’ to be safe
Yes, you’re right, it does depend. In this case though, we’re talking about a strategy here to buy out a new lease, so definitely not in the last couple payments, and in California where a good 10% of the payment is going to tax alone, so even with a .00001 mf, it’s going to be quite a bit less.
And it’s a hyundai lease, so significantly is going to be the name of the game. I bet there’s the better part of $10k in rent charge there.
I’m hoping for some lease buyout expertise on this issue. My dealer advises that if I lease the Ioniq 5 and then buyout the lease asap, I will end of with an overall purchase price that may save about $6,500 or so on the cost compared to a straight purchase at MSRP. My concern is that I have not seen anything that confirm that Hyundai Financing won’t want what are described as “rental fees” for the full lease term. I have seen comments saying no, those fees vanish because the lease ends with the buyout, and others that suggest the contrary. Does anyone have anything definitive on this or can point me in a direction where I can get confirmation?
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That is helpful … I think! Is the consensus that the verbiage in the lease terms is consistent with the tax credit largely being passed through if you make a buyout? I note the general comments that the Hyundai leases themselves are not a good deal but is the buyout approach the way to go?
The tax credit is passed through the moment it gets listed as an incentive on the contract.
The bigger question being addressed there is that you only pay rent charge for the months you hold the lease.
Understood — so is the position that it is clear that you will “only pay rent charge for the months you hold the lease” and, consequently, the cost of purchase leads to a saving?
Yes, the contract as shown is consistent with that. Youd want to verify any contract you signed, but the language is like every other lease contract i have ever seen.
Thank you for responding. One additional question. Is there any benefit to including a higher initial cash downpayment? If one then buys out the lease, is there a savings on the rent charge/depreciation?
In california it doesnt make a huge difference. May save you a few dollars but thats about it. In other situations, there may be tax advantages to do so, but not in CA.
Does this make sense in NY? I love leasehackr! I’m looking to buy an Ioniq 5 and I was trying to figure out if this strategy would work on my own, of course I hop on leasehackr and you guys are already discussing it. I think if I can avoid the rent charge it will create a pretty significant savings as a means to purchase the car but I’m horrible at math. Also NY offers a $2000 credit for purchasing an EV, can that be applied to the cap cost reduction in NY? I’m trying to get that limited for the price of the SE! 
What exactly should I be requesting from the dealer to figure out the math on this strategy?
You would pay tax on the total lease amount and the buyout in NY so account for that. NY will not give you credit for taxes already paid on the total lease amount.
So when you do a lease and immediate buyout in NY, you want to do the terms and miles that would give you the lowest TCO.
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What’s TCO? Wouldn’t I be paying the tax either way?
Total Cost of Ownership.
You pay tax on the total lease upfront in NY. When you buyout immediately, you are paying tax on the full buyout which includes part of the lease that is remaining. You are essentially double taxed on that part.
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