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

[mjsteelega]

I feel the need to correct my original post as the information I posted from my dealer was wrong. Here is the correct calculation:
Updated math based on information directly from KMF which corrects what my dealer keeps telling me.

Initial payment of $630 (monthly depreciation $495 / monthly rent charge $135)
35 months x $495 = $17,325
Residual Value = $26,213 (52% based on a 12k miles per year)
Down payment = $ 3,100
-------------------------------
Total cost $47,268.


Original total contract price of my car... $52,615.67.




*** Original post ***
Look through ALL your numbers before you sign the Kia lease.

I leased a GT2 that came with "$6,500 KMF Cash". What they don't tell you is that they are hiding more than $4,000 of hidden fees.
Here is my math; 36 months x $630 = $22,680
Residual Value = $26,213 (52% based on a 12k miles per year)
Down payment = $ 3,100
-------------------------------
Total cost $51,993 over 3 years.


What was the total price of my car you might ask... $52,615.67.

Some hidden calculations mean that a $6,500 cash rebate turned into a $622 savings; oh, and I CAN NOT terminate my lease early unless I pay all the remaining payments. There is no amortization schedule like a loan. Even though the apparent "Adjusted Capitalized Cost" after rebates and down payments was $44,066.93. With a Residual value of $26,213, somehow a loan for $17,853.93 over 3 years is costing me $22,680!!! That equates to an APR of about 18%!!!

DO NOT BE FOOLED.

 

[MurlinatoR]

Look through ALL your numbers before you sign the Kia lease.

I leased a GT2 that came with "$6,500 KMF Cash". What they don't tell you is that they are hiding more than $4,000 of hidden fees.

Here is my math; 36 months x $630 = $22,680
Residual Value = $26,213 (52% based on a 12k miles per year)
Down payment = $ 3,100
-------------------------------
Total cost $51,993 over 3 years.

What was the total price of my car you might ask... $52,615.67.

Some hidden calculations mean that a $6,500 cash rebate turned into a $622 savings; oh, and I CAN NOT terminate my lease early unless I pay all the remaining payments. There is no amortization schedule like a loan. Even though the apparent "Adjusted Capitalized Cost" after rebates and down payments was $44,066.93. With a Residual value of $26,213, somehow a loan for $17,853.93 over 3 years is costing me $22,680!!! That equates to an APR of about 18%!!!

DO NOT BE FOOLED.

Hey, I tried to help the math equation in the other thread, for what it's worth.

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[BriTay]

oh, and I CAN NOT terminate my lease early unless I pay all the remaining payments. There is no amortization schedule like a loan. Even though the apparent "Adjusted Capitalized Cost" after rebates and down payments was $44,066.93. With a Residual value of $26,213, somehow a loan for $17,853.93 over 3 years is costing me $22,680!!!

Ok, you have really confused me. How can you not pay your lease off early? What rule/law/agreement states that you have to pay all of your lease payments and can't pay off the lease early? I have gone to KMF and it states in several places that you can pay the lease off early. In some cases you might have to pay a small fine though. Just really confused with all of this and what was stated in the other thread....(@MurlinatoR?)

 

[MurlinatoR]

Ok, you have really confused me. How can you not pay your lease off early? What rule/law/agreement states that you have to pay all of your lease payments and can't pay off the lease early? I have gone to KMF and it states in several places that you can pay the lease off early. In some cases you might have to pay a small fine though. Just really confused with all of this and what was stated in the other thread....(@MurlinatoR?)

He's just frustrated and confused.

You can, with no question, buy out your lease early. The interest is only calculated for the months that you wait to buy it out.

There is a $300 fee for buying it out.

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[BriTay]

He's just frustrated and confused.

You can, with no question, buy out your lease early. The interest is only calculated for the months that you wait to buy it out.

There is a $300 fee for buying it out.

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Ok, that jives exactly with what it states at KMF so thank you for the clarification. Also, I was wondering if you would still be available to work with around Oct next year when I will be able to purchase a GT2? Assuming the 2019s are out at that time? I was just curious....

 

[MurlinatoR]

Ok, that jives exactly with what it states at KMF so thank you for the clarification. Also, I was wondering if you would still be available to work with around Oct next year when I will be able to purchase a GT2? Assuming the 2019s are out at that time? I was just curious....

Do you mean will I be around and able to help you in October?

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[BriTay]

Do you mean will I be around and able to help you in October?

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Yes. I will be ready to purchase a 2019 (assuming they are available) GT2 by October. You've been great on this forum and appear to be able to get people what they need...

 

[MurlinatoR]

Yes. I will be ready to purchase a 2019 (assuming they are available) GT2 by October. You've been great on this forum and appear to be able to get people what they need...

Oh, for sure! After 17 years, I'm not going anywhere, God willing. LOL

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[mjsteelega]

I guess my dealer is lying to me. Here is what they told me:

?You cannot terminate a lease early. If you do then you are still responsible for the remaining payments. There is a disposition fee of $400 if you decided to turn the lease in without getting another Kia, there is also a Purchase Option Fee of $300 if you decide to buy the lease out.

There is not an amortization schedule. In a lease interest does not accrue daily as it does on a finance loan, it is added to the lease in full at date of purchase. When leasing you agree to pay the interest in full, that is the "Rent Charge" section on the contract. If you decide to buy the car out at any point during the lease, then you would pay any remaining lease payments + the residual value + the $300 purchase option fee.?

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[mjsteelega]

[MENTION=291]MurlinatoR[/MENTION]
Frustrated... you bethchya
Confused... I don?t think so

Is the leasee is responsible for the entire ?Rent Charge? the moment they sign the lease regardless of when they choose to make all the payments, and the dealer can not show what makes up the rent charge, then these numbers equate to a 17.5% interest rate. Do the math yourself.

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[MurlinatoR]

I guess my dealer is lying to me. Here is what they told me:

?You cannot terminate a lease early. If you do then you are still responsible for the remaining payments. There is a disposition fee of $400 if you decided to turn the lease in without getting another Kia, there is also a Purchase Option Fee of $300 if you decide to buy the lease out.

There is not an amortization schedule. In a lease interest does not accrue daily as it does on a finance loan, it is added to the lease in full at date of purchase. When leasing you agree to pay the interest in full, that is the "Rent Charge" section on the contract. If you decide to buy the car out at any point during the lease, then you would pay any remaining lease payments + the residual value + the $300 purchase option fee.?

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Well, they may be lying to you, or they may be unaware.

The contract is simply trying to scare you into not buying it out.

There is now a purchase option fee, that did not exist until 2018, of $300. That is the ONLY fee that is due up in purchase besides your residual.

Now, about this rent charge business. A lease is an installment contract just like a loan. Only IF you pay your payments will you pay the rent charge. The lease companies want you to pay the payments because they want your rent charge (interest). If you buy out the lease completely EARLY, meaning before the maturity of your contract, you will NOT pay the rent for that remaining balance.

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[mjsteelega]

[MENTION=291]MurlinatoR[/MENTION] That is what I had expected, though not what my dealer is saying. I quoted his response to me in one of my previous posts. I will continue to dig into this further.

Appreciate your patience, though you might now understand my frustration with the dealer when they are implying that all "Rent Charges" would be due even if I paid the Lease off early. I've done this before with BMW and Honda.

 

[MurlinatoR]

[MENTION=291]MurlinatoR[/MENTION] That is what I had expected, though not what my dealer is saying. I quoted his response to me in one of my previous posts. I will continue to dig into this further.

Appreciate your patience, though you might now understand my frustration with the dealer when they are implying that all "Rent Charges" would be due even if I paid the Lease off early. I've done this before with BMW and Honda.

No sweat, man. Really. I apologize for my shortness in responses as well. I have morals, values, and a spotless reputation that I have a tendency to take personally at times when I shouldn't.

Here's the truth; ultimately the ONLY reason to deceive someone is if there is some sort of personal gain to be had by the deceiver.

IF both options were to cost the exact same amount, for the vehicle title to show up in your mailbox, and you keep the car without releasing another, what is the benefit in the deception??? The deceiver would stand to gain nothing if you paid the same amount to keep the same car.

Mathematically, you pay the same tax, registration, title, licensing, and doc fees for a lease as a purchase. The ONLY additional fees in a lease are the $650 acquisition fee (which is really to pay for the GAP coverage that is built into every lease) and the termination fee ($400 to walk away or $300 to keep your car). So, the lease costs a minimum of $950 more due to these fees.

The ONLY other remaining difference in total cost is the difference between interest rates between the two purchase options. There is NO ZERO interest on the Stinger unless you pay cash. So, the question comes to this; will the higher interest in my lease payments out weigh the remaining savings of my lease rebate? That is the final answer as to weather or not the lease is truly cheaper.

THE CHEAT HERE IS THIS; you CAN save that interest (rent charge) in your lease IF you buy it out (completely) shortly after your lease starts. This allows you to capture much more of your lease rebate savings. Now, you will pay interest on the refinanced loan but more than likely less than the 5% rate in the lease.

Ultimately [MENTION=238]mjsteelega[/MENTION], if you don't want to buy the lease, then just do what you're comfortable with. It's your money to spend as you see fit. This is exactly what I tell every single customer I work with (more than 200 a year).

But, if I don't at least show a customer an option to save money, then in my mind I'm stealing their money. Once I've offered then the savings, my conscious is clear. LOL

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[ralzod]

Is this just a mix-up between early-termination vs buy-out?

 

[MarkyMark]

Look through ALL your numbers before you sign the Kia lease.

I leased a GT2 that came with "$6,500 KMF Cash". What they don't tell you is that they are hiding more than $4,000 of hidden fees.

Here is my math; 36 months x $630 = $22,680
Residual Value = $26,213 (52% based on a 12k miles per year)
Down payment = $ 3,100
-------------------------------
Total cost $51,993 over 3 years.

What was the total price of my car you might ask... $52,615.67.

Some hidden calculations mean that a $6,500 cash rebate turned into a $622 savings; oh, and I CAN NOT terminate my lease early unless I pay all the remaining payments. There is no amortization schedule like a loan. Even though the apparent "Adjusted Capitalized Cost" after rebates and down payments was $44,066.93. With a Residual value of $26,213, somehow a loan for $17,853.93 over 3 years is costing me $22,680!!! That equates to an APR of about 18%!!!

DO NOT BE FOOLED.

@The Barron, the sounds about right. Basically, a lease shifts how the money is made the Kia. Instead of in a sale, it's paid to the financing company over 3 years, but it's often more or a wash (right around MSRP).

That said, MurlinatoR has explained that if you do a same day lease-buy move (something I am considering), then the stream of payments (assuming must pay full lease month for month 1, thus 35 remaining payments), legally cannot include the interest. It is like paying the principal on a mortgage or any type of loan.

So add up the monthly without the interest and the buyout. Then the least cash "can" work in your favor, if it's big enough and you use this maneuver to purchase the car ASAP.

 

[MurlinatoR]

Is this just a mix-up between early-termination vs buy-out?

I believe so.

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[MarkyMark]

No sweat, man. Really. I apologize for my shortness in responses as well. I have morals, values, and a spotless reputation that I have a tendency to take personally at times when I shouldn't.

Here's the truth; ultimately the ONLY reason to deceive someone is if there is some sort of personal gain to be had by the deceiver.

IF both options were to cost the exact same amount, for the vehicle title to show up in your mailbox, and you keep the car without releasing another, what is the benefit in the deception??? The deceiver would stand to gain nothing if you paid the same amount to keep the same car.

Mathematically, you pay the same tax, registration, title, licensing, and doc fees for a lease as a purchase. The ONLY additional fees in a lease are the $650 acquisition fee (which is really to pay for the GAP coverage that is built into every lease) and the termination fee ($400 to walk away or $300 to keep your car). So, the lease costs a minimum of $950 more due to these fees.

The ONLY other remaining difference in total cost is the difference between interest rates between the two purchase options. There is NO ZERO interest on the Stinger unless you pay cash. So, the question comes to this; will the higher interest in my lease payments out weigh the remaining savings of my lease rebate? That is the final answer as to weather or not the lease is truly cheaper.

THE CHEAT HERE IS THIS; you CAN save that interest (rent charge) in your lease IF you buy it out (completely) shortly after your lease starts. This allows you to capture much more of your lease rebate savings. Now, you will pay interest on the refinanced loan but more than likely less than the 5% rate in the lease.

Ultimately [MENTION=238]mjsteelega[/MENTION], if you don't want to buy the lease, then just do what you're comfortable with. It's your money to spend as you see fit. This is exactly what I tell every single customer I work with (more than 200 a year).

But, if I don't at least show a customer an option to save money, then in my mind I'm stealing their money. Once I've offered then the savings, my conscious is clear. LOL

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Exactly, what MurlinatoR said ; ) If you are getting into a lease, and do not know a lot about them, NEVER get into a lease. They are called a "Fleece" for a reason... However, with the GT, and Lease Cash of $4,800, I stand to save around $1500 vs a very aggressive purchase. Maybe a bit more. But if the dealer talks rebates and lease cash, and then when asked about interest rate says "Oh, it's tiny, only .0019" or something like this, you can either A. Run for the hills. or B. Reveal the fact you understand all the numbers. .00199 x 2400 = 4.77% annual interest rate. They don't just multiple this by the repeciated amount either, but take the capitalized cost and residual, add them together and multiple to toss THAT number on top of the base rent charge. It's tricky, there is a lot to this. Thus buyer beware! Know your stuff and you'll be fine.

 

[mjsteelega]

Is this just a mix-up between early-termination vs buy-out?

Not from my POV. The question I am trying to solve is whether or not the "Rent Charges" are due in full if you buy-out the lease early. My dealer is saying that ALL remaining Rental Charges are due if I buy out the lease after 2 months. Which doesn't seem right to me as I have done it before. Waiting to hear back from the dealer.

On a side note: the Rental Charges seem quit high on what my dealer has calculated. Over $5,000 over 3 years. If the depreciation is $18,000 and you applied a 5% APR to that, the Rental Charges should only be about $1,400. Why mine are $5,000 is a huge mystery to me. It kind of negates more than half of the $6,500 KMF cash.

 

[MurlinatoR]

Not from my POV. The question I am trying to solve is whether or not the "Rent Charges" are due in full if you buy-out the lease early. My dealer is saying that ALL remaining Rental Charges are due if I buy out the lease after 2 months. Which doesn't seem right to me as I have done it before. Waiting to hear back from the dealer.

On a side note: the Rental Charges seem quit high on what my dealer has calculated. Over $5,000 over 3 years. If the depreciation is $18,000 and you applied a 5% APR to that, the Rental Charges should only be about $1,400. Why mine are $5,000 is a huge mystery to me. It kind of negates more than half of the $6,500 KMF cash.

I believe that the rental charge line that they have listed is also including your acquisition. But, there is no way to know what they're charging you for.

There may be additional charges that the dealer is sliding in on you to make more profit. Only way to know that is to ask for a detail of all charges.

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[mjsteelega]

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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