No, you owe what your lease agreement says, not what the system says. How can your buyout be 45,175.79 given that …
Initial balance = Adj. Cap – Single Pay
= 54,602.71 – 19,219.92
= 35,382.79
And, your adjusted lease balance after 1 month is just the future value of the initial lease balance 1 month into the future…
That’s a difference of 9,541.46 (45,175.79 - 35,63433). YIKES!
Adding the 300-purchase option plus taxes plus any other applicable charges to 35,634.33 probably won’t get you anywhere near the 45,175.79 buyout. I would definitely challenge them!
The lease buyout included the 7% IL taxes. So the difference is the rent charges, not even sure how to talk further with a customer service rep who sticks to a standard script
The lease contract says 41940 but I was hoping that the rent charges of $6500 will be deducted from buyout considering what the contract says. Pictures are posted above
according to the contract 22E adj lease balance, your payoff at start of lease is adj cap - one pay and increases monthly as rent charge accrues. So if the system is quoting incorrectly, i’d first ask for a breakdown to see where there’s a problem.
(35,634.33 + 300) x 1.07 = 38,449.73 plus any applicable fees. Still, not even close to 45,175.79. The 35,643.33 does include a rent charge for one month which is the difference between the adjusted lease balance after one month and the initial lease balance. Specifically, the rent charge amounts to…
35,634.33 - 35,382.79 = 251.54
You were speaking with a drone. They are totally clueless and can’t calculate buyouts. The fund provider does that deliberately. You need to speak with someone in the leasing department who is familiar with purchase options and buyout calculations. Their adjusted lease balance should be within pennies of mine.
Thanks. I just realized that the screenshot I posted mentions that there is no sales tax collected for IL, not sure how that number was calculated in that case.
I was assuming $41940*1.07 + 300 for purchase option which put me at $45,174
Actually, that doesn’t make much sense. Let’s use some number sense to see why…
Forget about the 300 PO and taxes. So, only consider the residual…of 41,940 and let’s not forget about the one-pay of 19,219 you’ve already paid. This means you will have paid a total of…
41,940 + 19,219 = 61,159 This is much more than your adjusted cap of 54,602, a difference of a whopping 6,557… WHOA!!! And that’s why it doesn’t make any sense.
Without tax and excluding any applicable fees, except the 300 PO fee, your buyout is
35,634.33 + 300 = 35,934.33… Trust me. I know what I’m doing. Good luck.
Notice that your buyout quote says
“Buyout quote Good Through: 10/01/2025”
Which means you can’t get back the rent charges in one pay. Unless, some lease expert at HMF is able to refund the rent charges, you are better off putting your 45K in a fund to earn interest and then buy it two years later. no point in buying it now.
Good catch! I did not see the 10/1/2025. Assuming the 45,175.79 includes the 300 PO, OP should be credited with…
45,175.79 - 35,934.33 = 9,241.46
The OP’s interest rate implicit in the lease is 8.5309% compounded monthly which equates to qn annual effective rate of 8.87% compounded annually. So, rent charges are accruing at an annual effective rate of 8.87%. OP should buy it out now unless he can achieve an after-tax ROR exceeding 8.87%. It just depends on OP’s opportunity cost of investment.
Yup. This is probably going to require a stronger hand than just asking the fiest level customer service rep.
The question also needs to be posed to hmf as “why does the buyout you are providing not follow the contractual requirements?” rather than “what should my buyout be?”
the customer service rep tried to help, followed up couple of times and forwarded the issue to higher ups. After that I didn’t hear anything.
I abandoned the plan after I saw used 2023 model currently listed for around 40K. Going by the trends I believe the 2023 Ioniq 5 will be priced much lower with transition to NACS port by October 2025 when my lease is up
