Attaching second page of lease. My intent is to purchase the car.
Would the payoff amount be residual amount $41940 - Rental charges $6557.21 = $35,383 ( plus state taxes) if I purchase the car within a month of leasing?
Let me know if the calculation is right for a one pay lease.
Why would you do a one pay and pay $6k in interest upfront only to buy the car out ASAP?
Because on a onepay, the rent charge is still earned monthly, so that doesn’t happen.
Isn’t there still an early termination fee per the highlighted text?
Is there language in the contract where that cash is returned? Because I sure af wouldn’t want to be explaining GAAP to a captive’s rep on the phone.
There was in my ccap onepay i sold early and had my buyout be well below the rv because of the unearned rent charge.
My last hyundai lease shared the same language. I havent read the terms on this specific lease obviously.
An early termination and an early buyout are different things.
I haven’t seen the contract but on a one pay with HMF does the remaining rent charge lower the buyout?
I have never seen a one pay that didn’t.
I would think the buyout is the buyout nothing less than that number. 41940 ?
No one is talking about doing an early termination.
This is an execution of the purchase option before maturity, which is subjected to the adjusted lease balance described in 22E. It specifically states the buyout is less the unearned rent charge, which will increase each month until it finally meets the rv at the end.
Hyundai Charges $300 on buyout I believe.
as long as I have the option to buy the car minus the rental charges I am OK with paying $300 for the buyout
when your loan funds HMF portal has the buyout amount right there.
You’re close! Per Section 23 (E), the constant yield rate embedded in your lease is calculated in much the same way that an APR is calculated. That rate amounts to 6.8478%. Your adjusted lease balance will be calculated after 1 month (23 months remain) and can be calculated in one of two ways, Method 1 and Method 2, as follows…
Method 1: Present value of the Residual-
Method 2: Using the language in Section 22(E) of your lease agreement, your initial balance is as follows…
Initial balance = Adj. Cap – Single Pay
= 54,602.71 – 19,219.92
= 35,382.79
Your adjusted lease balance after 1 month is…
Note that both methods give the same Adj. lease balance, namely, 35,634.33. Per Section 9, you’ll need to add the purchase option fee of 300 to get 35,934.33. Other charges may apply (e.g., taxes, admin fees, etc.).
FYI - Observe that if the lease goes full term, your adjusted lease balance is just the residual value (rv)….
We’re very close! Hope this helps.
Thanks a lot. Will it be more beneficial if I go for monthly lease instead of one time lease pay
It’s the proverbial “it depends”. I’m not a big fan of one-pay leases because laying out a lot of cash upfront on a depreciating asset is never a good idea for me. Remember, a car is an expense, not an investment. Your interest rate is a whopping 8.5309% for the one-pay. On the other hand, your interest rate would likely be the same, perhaps higher, with monthly payments.
It really boils down to which option makes you feel most comfortable. It’s a personal decision where there is no right or wrong answer.
One thing to keep in mind is the fact that if you elect to purchase your vehicle, your buyout will always be less for the one-pay than for the monthly unless you go full term where it will be the same (adjusted lease balance = residual). This is true because the adjusted lease balance converges on the residual from below throughout the term of the lease except at lease end where convergence is achieved (i.e., they’re equal). Hope this helps.
Unfortunately it looks like the one pay lease might have hurt me. I am being asked to pay the rent charges. Called customer service, they pretty much repeat that I owe what the system says and can’t do anything
what does your contract say?
