I’m in FL and looking to take advantage of the $7,500 federal tax credit passthrough when leasing an EV9 Wind trim. Based on this article (link), the MF on this deal is 0.00344 on a 36-month lease, or 0.00140 on a single pay. My plan is to buy-out the vehicle once the lease is over. I’m also planning to trade in a 2015 Honda Pilot EX, or possibly sell it for cash if I don’t get a good offer from the dealership.
This will be my first lease, so I’m not quite sure what to ask for or look for when speaking with the dealership.
Dealer will probably just give you a monthly payment and money due at signing. Typically for a lease you’ll want to know what the money factor (negotiable and set by dealership) and residual (not negotiable and set by Kia) are and should ask them for an itemized sheet which you can bring back here. However since you are going to buy it out the MF and lease deal becomes less important.
I imagine leases will not be very good when the EV9 comes out initially, but at least you’ll get the $7500 off. Also knowing Kia dealers they will try to add ADM although Kia sent out a memo asking them to sell for MSRP.
The trade-in will likely act like a down payment (cap reduction) which makes monthly payments less but also is lost if the car is totaled, so buy it out ASAP!.
Speaking of which, the dealer will also likely tell you that you need to keep the lease active for 3-6 months. I would check with Kia corporate to see if anything jeopardizes the $7500 (I don’t think so?), but usually the dealer tells you this so they get credit from Kia Financial for the lease but in reality you can buy it out the next day if you so choose.
The trade-in will likely act like a down payment (cap reduction) which makes monthly payments less but also is lost if the car is totaled, so buy it out ASAP!.
Not sure I’m understanding this part. So, let’s say hypothetically the car gets totaled on the way home from delivery. Let’s assume it costs $65,000 and I got $15,000 on my trade, so there was a $50k balance. Since it’s a brand new vehicle, insurance is going to value it around $65,000 (perhaps…minus the taxes and dealer fees), so they’ll cut me a check for ~$65k, I’ll send $50k to the leasing company and end up with ~$15k cash, no?
Buy rate money factor is set by the bank, not the dealer. The only way a money factor is negotiable is if the dealer has added a mark up to the money factor. Only that markup is set by the dealer.
Ah…that’s the part I missed. So it seems best to just put as little down as possible, sell the Pilot for cash and use the funds to buy out the lease ASAP.
You can essentially negotiate 3 things on this deal:
The markup on the money factor. You can see the buy rate on that chart based on credit tier (and trim level). They are allowed to markup some of them .0004 (not a huge markup to be honest but it adds up)
The selling price of the vehicle.
The add on items they will probably try to force at first (tint, paint protection, nitrogen, accessories marked up 3-5x retail etc)
You can’t negotiate the buy rate of the money factor or the residual value.
Edit- I think the best plan would be to take a 24 month 1 pay lease (lowest money factor) and see how it fares in the market before buying the rest of the vehicle. This thing could be ugly in depreciation and that way the bank takes the risk instead of you.
Just called Kia Finance to confirm that they still allow 3rd party buyouts and the buyout amount would be the same for a 3rd party buyer, they said they still do. With $7.5k lease cash plus $5k from my state, this should be a low-risk lease if I decide to sell the EV9 quickly.
They REALLY fight a 3rd party buyout , just an FYI, they will not tell a 3rd party the Wholesale buyout, only the price after tax…and they will tell you the tax…but not the buyout…lol.
What a rollercoaster…so now leasing is seeming like a horrible option if the goal is to ultimately own the vehicle:
Have to pay extra sales tax on full price of vehicle if buying out.
Need to purchase gap insurance if putting $0 down.
More attractive financing offers with $3,750 customer cash (half the $7,500 lease credit) and interest rates from 3.25% to 6.49% depending on term (much lower than 7.848% on the lease).
Do you mean “only if you DON’T do an immediate buy out”?
Sales tax will be in monthly payment for 2 years in the lease prior to buying out. Won’t I get hit with full sales tax again on the buyout one way or another?
Wow that’s really odd though even if the 3rd party dealer paid them the payoff plus tax, I should still be getting a refund check for the tax portion anyway, right?
