Leasee's BE WARE - KMF CASH ON LEASES ARE NOT WHAT THEY APPEAR

[MurlinatoR]

I have asked for a full breakdown of the Rental Charges. They already added a Dealer Doc Fee ($699) and an Acquisition Fee ($650) which are in the Gross and Adjusted Capitalized Costs. I?m not even arguing those. IMHO, the Rental Charges should not include anything beyond interest on the money borrowed. Right now I?m calculating some $3,600 incremental and unexplained ?ancillary fees?.

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Well, that doc fee is outrageous! We charge $180. Also, there's the extra $700 that they added that I'm assuming you asked for.

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[MarkyMark]

I have asked for a full breakdown of the Rental Charges. They already added a Dealer Doc Fee ($699) and an Acquisition Fee ($650) which are in the Gross and Adjusted Capitalized Costs. I?m not even arguing those. IMHO, the Rental Charges should not include anything beyond interest on the money borrowed. Right now I?m calculating some $3,600 incremental and unexplained ?ancillary fees?.

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Okay, so I don't think you are building how they are getting to their costs quite right. Close, but not quite. You stated "If the depreciation is $18,000 and you applied a 5% APR to that, the Rental Charges should only be about $1,400."

That is NOT how they get to how much interest you paying in your monthly rental charge fee.

What they take is the Capitalized Cost (the price you negotiated down from MSRP) + The Depreciated cost (which is 54% of the MSRP). They ADD those TWO components together, and THEN multiply by the Money Factor of .00196 (IF you have a great credit score).

So, the Capitalized cost of a GT2 (I believe that's what you got) might be somewhere around $42,700K (that high if they ONLY took off the $6,500 lease cash) + The depreciated fee, which should be right around (49,200 * .54) $26,568.

Those two components together ($42,700 + $26,568) = $69,268. THAT figure is multiplied by .00196, for a monthly 36 month interest payment of: $135.76

You mentioned the depreciation amount was $18,000. That, divided by 36 months = $500 a month. This, plus the interest payment of $135.76 = $635.76

NOW, you can run this again with your own numbers, but it'll likely be decently close, if not a bit higher than the $635...

Basically, Kia is giving that $6500 away to get a lease going on. It cuts their earnings on the car initially, but over $36 months Kia Corporate, via the Finical wing, gets all that money back via the interest rate and how they calculate that interest (adding the Capitalized Cost + the Residual figure together). It's a huge ammount, and it often adds up to MSRP or above when all is said and done.

But, if you want to buy out the car right now via money you have, a loan, a combo. Then the ONLY fee you need to legally pay is the base monthly fee x how many months remain, and NO interest.

If the dealer balks at that, I'd call Kia Financial and get that rectified ASAP. If that fails, within your state there is certainly a regulatory agency you can talk with and it should get rectified pretty quickly I would think.

Sorry you got into a lease, when it sounds like you had some information, but not all. Hope you get it fixed and soon. Hope it doesn't sap too much joy away from the car itself for ya. And I hope this helped.

 

[mjsteelega]

Thanks [MENTION=477]MarkyMark[/MENTION] . I am all too familiar with HOW they calculate it. My point was, you just can't generate more than $5,000 of interest in just 36 months. Even if I financed the whole car at 5% over 36 months you only generate $4,100 in interest. So what exactly is in the Rental Charge? This "money factor" game is another problem. With an 815 credit score, the money factor should be even lower... much lower.

I am waiting to hear back from the dealer what other miscellaneous charges they have bundled into the Rental Charge.

 

[mldavis2]

The only way I ever buy a car is to get an "out the door" price including my trade-in. Then pay cash up front -- unless you can get a lower interest rate than you can make on your investments. Last car I "financed" was my '05 GTO at 0.0% interest. The G8 GT was cash and the Stinger is a cash deal if it ever gets here. Make your car payments to yourself to get ready for the next one, not paying interest to the lender. Takes some self discipline to do that over the years, I know....

 

[mjsteelega]

The only way I ever buy a car is to get an "out the door" price including my trade-in. Then pay cash up front -- unless you can get a lower interest rate than you can make on your investments. Last car I "financed" was my '05 GTO at 0.0% interest. The G8 GT was cash and the Stinger is a cash deal if it ever gets here. Make your car payments to yourself to get ready for the next one, not paying interest to the lender. Takes some self discipline to do that over the years, I know....

While that is good and sound advice for many people, if you have $50k to pay cash for a car, then you may have the credit to make money with money.

I do not pay cash for anything. I?ve leased or financed every car I have ever owned because I always buy new which typically comes with very attractive interest rates.

On the Stinger for example, if this lease bit doesn?t work out, I?ll take the 0% financing, then take my $50k in cash and invest it somewhat conservatively which usually yields me 5-7% or better returns. Sometimes much higher. This way, you make money on someone else?s money. This is one way the ?rich? stay rich. If you pay cash for a car which instantly depreciates, it means that you also immediately lose money.

This too takes discipline. But if you have it, leverage credit all the time and you can earn yourself some nice returns along with some nice perks if you can leverage a credit card. I once was able to put a $15k down payment on a credit card. Earned me 15k air miles with Southwest. I was able to get two round trip tickets to New Orleans with that. Cost me $6 in ticket fees. Paid the card off before it was even due.

When you pay cash, you typically lose money every time. Cash is king, and it takes cash to make money.


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[mldavis2]

No argument, however you can get better net prices on a cash deal than financing. And while the stock market has been good up to now over the past 8-9 years, it is unstable and due for a major "correction." So is a 4% loan better than losing the investment capital? No one knows. There is no 0% financing currently available. When I spec'd my GT1 AWD out, there were none to be found, anywhere, and most dealer lot cars have had $1,000 worth of crap I don't want added to the MSRP like cargo mats, pinstriping, window tinting - the list is limited only by their imagination. The choice then was to pay $5,000 more for a GT2 with virtually nothing additional that I wanted or needed, or order it built. I did, and delivery is past the end of the current Feb 28 factory "deals." I'll make my decision when the car gets here in March.

We don't disagree, [MENTION=238]mjsteelega[/MENTION]. The choices often determine the best way forward. Note my second sentence in my post #24 above.

 

[Stingin' Away]

I've never paid over $125 for doc fees. Ever lol Then again, I've never leased a car so that may be why. $699 is insane

 

[MarkyMark]

No argument, however you can get better net prices on a cash deal than financing. And while the stock market has been good up to now over the past 8-9 years, it is unstable and due for a major "correction." So is a 4% loan better than losing the investment capital? No one knows. There is no 0% financing currently available. When I spec'd my GT1 AWD out, there were none to be found, anywhere, and most dealer lot cars have had $1,000 worth of crap I don't want added to the MSRP like cargo mats, pinstriping, window tinting - the list is limited only by their imagination. The choice then was to pay $5,000 more for a GT2 with virtually nothing additional that I wanted or needed, or order it built. I did, and delivery is past the end of the current Feb 28 factory "deals." I'll make my decision when the car gets here in March.

We don't disagree, [MENTION=238]mjsteelega[/MENTION]. The choices often determine the best way forward. Note my second sentence in my post #24 above.

Congrats! Mine will also be a GT1. I'd like AWD, but I'm opting for the Drive Wise package. I can't justify both Drive Wise and AWD dollar-wise. This will be the most expensive car I've ever purchased as it is...

 

[mldavis2]

Congrats! Mine will also be a GT1. I'd like AWD, but I'm opting for the Drive Wise package. I can't justify both Drive Wise and AWD dollar-wise. This will be the most expensive car I've ever purchased as it is...

Cost was not much of a factor. I just didn't see the $5,000 difference between the GT2 AWD and the GT1 AWD with Drive Wise. Two things I liked better on the GT1 was the non-electronic gate into manual, and the fact that it does not have HUD which usually means much more expensive and hard to find windshields. My old road warrior G8 GT is on its 6th windshield in 191,000 miles. My old '00 Pontiac GrandPrix GTP had HUD and the windshields were nearly 3X expensive to replace because of some reflective film I guess needed for the HUD to show up. A GT1, AWD, Drive Wise is $5,000 cheaper than a GT2. I don't get the low beam turning headlights, fancy seat and tailgate auto-open, but don't need those.

 

[MarkyMark]

Cost was not much of a factor. I just didn't see the $5,000 difference between the GT2 AWD and the GT1 AWD with Drive Wise. Two things I liked better on the GT1 was the non-electronic gate into manual, and the fact that it does not have HUD which usually means much more expensive and hard to find windshields. My old road warrior G8 GT is on its 6th windshield in 191,000 miles. My old '00 Pontiac GrandPrix GTP had HUD and the windshields were nearly 3X expensive to replace because of some reflective film I guess needed for the HUD to show up. A GT1, AWD, Drive Wise is $5,000 cheaper than a GT2. I don't get the low beam turning headlights, fancy seat and tailgate auto-open, but don't need those.

I test drove a GT2 AWD, and the one thing I loved about it was the HUD. It's really well done. I had never thought about a windshield replacement, but yah, I can see how it could cost a lot more. Suddenly I don't need that feature so much anymore - but might be tempted to add HUD if it ever becomes a standalone option ; )...

 

[BriTay]

* I just didn't see the $5,000 difference between the GT2 AWD and the GT1 AWD with Drive Wise. * A GT1, AWD, Drive Wise is $5,000 cheaper than a GT2. I don't get the low beam turning headlights, fancy seat and tailgate auto-open, but don't need those.*

You keep stating that the difference between the GT1 AWD with Drive-wise is $5K cheaper than the GT2 AWD. This is actually incorrect. The difference in price is actually $3,950. And yes the additional enhancements between the 2 trims is probably worth that difference. I do understand that it is just your opinion that it's not worth the difference. I just wanted to point that out so newer people on the forum don't get faulty information based on just an opinion.

 

[mldavis2]

On the Kia web site:
GT2 + AWD + 900 transportation = $52,300
GT2 + AWD + Drive Wise Pkg. + 900 transportation = $48,350

Yes, $3,950 is correct. Thanks. Not worth $4,000 difference to me.

 

[BriTay]

On the Kia web site:
GT2 + AWD + 900 transportation = $52,300
GT1 + AWD + Drive Wise Pkg. + 900 transportation = $48,350

Yes, $3,950 is correct. Thanks. Not worth $4,000 difference to me.

Yup, I wouldn't doubt other folks would agree with you. I tend to fall a bit on the other side and think it might be worth it. But that's just my opinion. Haven't bought one yet but plan to get one late this year so I could possibly change my mind....
(Slightly edited your post)

 

[MarkyMark]

On the Kia web site:
GT2 + AWD + 900 transportation = $52,300
GT2 + AWD + Drive Wise Pkg. + 900 transportation = $48,350

Yes, $3,950 is correct. Thanks. Not worth $4,000 difference to me.

It isn't worth the difference to me either, but this is all subjective personal choice, no right or wrong here.

Just so those not yet in the know: The GT2 AWD vs the GT1 AWD also has:
? LSD (Limited Slip Differential) A big deal to some driving enthusiasts.
? High Beam Assist
? The entire Drive Wise Safety Package ($2,000 package). Blind Spot Monitoring, Rain Sensing Windshield Wipers, Rear Cross Traffic Alert, Forward Collision Warning & Assistance, Smart Cruise Control with stop/go, Lane Departure Warning and Lane Keep Assist, Driver Attention Warning System.
? Heads Up Display (okay, I personally find this amazingly cool)
? Nappa Leather seating (higher end softer leather)
? 16-way drivers seat
? 12-way passenger seat

Drive Wise package is $2k. Up to you to decide if the other goodies are with another $2k or no?... ; )

 

[mldavis2]

Just so those not yet in the know: The GT2 AWD vs the GT1 AWD also has:
? LSD (Limited Slip Differential) A big deal to some driving enthusiasts.
? High Beam Assist
? The entire Drive Wise Safety Package ($2,000 package). Blind Spot Monitoring, Rain Sensing Windshield Wipers, Rear Cross Traffic Alert, Forward Collision Warning & Assistance, Smart Cruise Control with stop/go, Lane Departure Warning and Lane Keep Assist, Driver Attention Warning System.
? Heads Up Display (okay, I personally find this amazingly cool)
? Nappa Leather seating (higher end softer leather)
? 16-way drivers seat
? 12-way passenger seat

Drive Wise package is $2k. Up to you to decide if the other goodies are with another $2k or no?... ; )

(No, only the RWD gets LSD and it's an option on both the GT2 and GT1 RWD. None of the AWD's are LSD - don't need it)
(Again, no, high beam assist is in the Drive Wise package. The GT2 gets LOW BEAM assist which is the headlights turning on corners)
(This entire Drive Wise package is an option -- which I ordered -- on any of the GTs and lower ones as well)
(Driver's seat on the GT1 is 12-way, passenger is 8-way)

 

[ghedoicy]

Where are you at on getting this resolved [MENTION=238]mjsteelega[/MENTION]?

-Matt

 

[BriTay]

It isn't worth the difference to me either, but this is all subjective personal choice, no right or wrong here.

Just so those not yet in the know: The GT2 AWD vs the GT1 AWD also has:
? LSD (Limited Slip Differential) A big deal to some driving enthusiasts.
? High Beam Assist
? The entire Drive Wise Safety Package ($2,000 package). Blind Spot Monitoring, Rain Sensing Windshield Wipers, Rear Cross Traffic Alert, Forward Collision Warning & Assistance, Smart Cruise Control with stop/go, Lane Departure Warning and Lane Keep Assist, Driver Attention Warning System.
? Heads Up Display (okay, I personally find this amazingly cool)
? Nappa Leather seating (higher end softer leather)
? 16-way drivers seat
? 12-way passenger seat

Drive Wise package is $2k. Up to you to decide if the other goodies are with another $2k or no?... ; )

Missed a couple....GT2 has ventilated front seats, GT1 does not. And the GT2 is a shift-by-wire whereas the GT1 is a shift-by-cable system

 

[mjsteelega]

Where are you at on getting this resolved [MENTION=238]mjsteelega[/MENTION]?

-Matt

Hi [MENTION=239]ghedoicy[/MENTION], thanks for asking. Still dealing with this dealer who is completely inadequate. I called KMF today and got real answers. My original assumptions were correct. When you payoff/buyout a lease, you are only responsible for the balance of the Depreciation portion of your payments and the residual and NOT the balance of the Rental Charges. My dealer either lied to me or more likely just is so clueless they answered my question incorrectly. Hence... if you buyout your lease shortly after you sign it, you basically save all the Rental Charges less maybe the first payment. Oh, and depending on the state you are in, you may incur a payment charge of $300-$400.

Note: KMF was really nice to deal with. Competent, smart and responsive people. Kudos to them!

 

[BriTay]

Sorry to hear about the dealership but glad you got answers on the lease.

 

[mjsteelega]

Hi [MENTION=239]ghedoicy[/MENTION], thanks for asking. Still dealing with this dealer who is completely inadequate. I called KMF today and got real answers. My original assumptions were correct. When you payoff/buyout a lease, you are only responsible for the balance of the Depreciation portion of your payments and the residual and NOT the balance of the Rental Charges. My dealer either lied to me or more likely just is so clueless they answered my question incorrectly. Hence... if you buyout your lease shortly after you sign it, you basically save all the Rental Charges less maybe the first payment. Oh, and depending on the state you are in, you may incur a payment charge of $300-$400.

Note: KMF was really nice to deal with. Competent, smart and responsive people. Kudos to them!

Hey [MENTION=291]MurlinatoR[/MENTION]... I was able to get clarity from KMF. I corrected my original post too. Take a look. My original assumption was right and the dealer was feeding (and continues to feed me) bad information. Their finance manager is just wrong.