Lease ending on a 2017 kia Rio and my family member…smh put 160K miles on it…unbelievable I know. Pretty sure they only had the 36mo/30k miles in the term. let’s not ask about why or how this person managed to do this, but come up with as painless a solution as possible?
They are pretty much considering buying out the car at the end of the lease because paying overages on the 130k x .20 a mile would be 25k?! is that even possible? anyway, is the lease buy out price at the end negotiable? or is it set beforehand and not subject to change based on the mileage of the car? There is also minor damage on the side of the car as well.
Lease residual (buy out at the end of the term) is set in advance, not negotiable because the customer managed to exceed the mileage. Buying it out is pretty much the only viable choice provided your relative has the means to do so without financing.
Im an attorney and I worked on a similar case for a clients Hyundai. If you hand in the keys you pay the lesser off the overage on miles or the buyout price minus what the car sold for at auction ( will be a couple thousand at best. So you either buy it out for 13 or get a bill for somewhere between 10-11.5k. Check your contract to be 100 percent sure but I’m assuming the Kia and Hyundai deals are the same and it seems like a standard lease contract provision. My advice would be to buy, and drive it a bit while aggressively paying off the loan and sell it for 4-5k when you get the loan down to that much.
I don’t think you are screwed because there are some decent viable options. You will probably take a hit on the Kia, but it could be a decent daily for a while longer if it has been reliable thus far. The depreciation in terms of mileage has to be plateauing at this point, so putting more on and just repairing when it breaks might be an option?
Right now VW is offering a 2 year unlimited mile warranty on certified diesels. They are selling for around 10k and diesel is very fuel efficient. If your friend puts 100k in it with the peace of mind of a full warranty, and can then resell it for 4K you get 100k miles for 6-8k and no repair bills. Also a decently equipped Passat will be a lot nicer than a Rio to drive so much every day
Not a bad price for the car. 10K for an older VW seems like a lot. Is there some sort of dealer premium due to the “rarity” of these cars now that most have been recalled?
so buy out the car for 13k…make aggressive payments to beat the interest as much as possible til the payoff is about 4-5k and then sell the car for that much to pay off the rest? am i understanding correctly?
Yup… sounds like the least painful option. But bear in mind, let’s say you’re projecting 3 years down the road - what’s a 6-yr old Kia Rio with 200k miles (guesstimate) worth on the market?
Not to complicate this anymore for you, but the other issue you’re going to run into if you’re trying to finance it is finding a bank that will loan the money out 168,000 mile Kia Rio.
Some down payment will definitely have to come into play here as your loan to value is going to be completely screwed.
Bingo. The answer is no bank. You’d have to get a personal loan to cover the difference, and I’m guessing ‘family member’ doesn’t have the greatest credit based on leasing a Kia Rio and putting 160k on it.
If ‘family member’ doesn’t have the cash for the buyout, very well might be better off financially just handing it in and accepting the bill for the $15k-$2k it fetches at auction.
At least it was a dirt cheap car so $/mi is basically nothing. ‘Family member’ got a lot of use at a very low price for what they they’re going to now pay for, assuming maintenance was minimal. Imagine if it was a 7 series
Pretty sure Lightstream will. They do auto loans/lease buyouts but it’s essentially an unsecured personal loan. I bought out my Hyundai and they don’t require to be listed as the lienholder so I got my title in my name only. 3.29% on a 60 month loan last August.
