What is considered reasonable for a lease?

[njn007]

I've found a lot of threads, some stickies and such, but it looks like a lot of data is also based on older numbers (obviously things change from month to month).

I'm deciding between a Premium or a GT2- I know these are two very different models, in terms of cost, features, $$$, etc.

But from a general standpoint, what is a reasonable price to expect compared to MSRP? I see on Kia's site today that they're taking $6,500 off ($6,500 Manufacturer Offer Special Program from Kia Motors Finance for 36 months). I'd ideally hope to get the monthly payment at or below 500, either with trading in my current car or not (depending on their value).

Also, is there any chance the dealer would cut me a check for the value of my car less the amount I'd trade in? In case I don't want put all of the trade in amount towards the Stinger...

As a point of reference, KBB for my current vehicle is about 9500. I'd hope to get that from Kia, but who knows.

I know 2019s are on the way, so maybe I'll see if the dealer would give me any bonuses on getting rid of soon-to-be-old models...

Thanks in advance!

 

[adurrani87]

Honestly speaking, the worst thing with how lease offers are these days is having down payment. If you are to lease a vehicle, that means you have time and mileage limit on it, hence it totally doesn't make sense to put down money for any car that you are going to return. If you finance the car on the other hand , only then down payment makes sense, because you are then ultimately going to own the vehicle. Dealers and lenders should rethink this (I maybe wrong about this but I think its a valid point)

Having said that, it totally depends on the trim level you would like to get and what you want and can afford. From some research that I have done so far, $40,000 (without taxes) is a good price for a AWD Stinger GT, $38,000 for RWD. Shouldn't be more then that. That other then the options anyone would like.

 

[blesken]

Putting money down on a lease is no different than putting money down on a loan. You reduce the payments and you reduce the amount of interest you pay. A lease payment includes the depreciation, interest on the depreciation and interest on the residual. The money you put down pays in advance some (or all if you want) the depreciation. Your total of all monthly payments is reduced buy the amount you put down and the interest you would have paid on the amount you put down.

 

[njn007]

Okay, well ignoring down payments, what is considered a reasonable MSRP? I?ve seen some people say you can get near $40k for a GT2 with dealer offers and other specials, such as Costco Auto.


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[blesken]

Here in SW Ohio I?m seeing GT2?s with $3000 to $4000 off MSRP and Premiums $2000 to $3000 off MSRP. And that is advertised, they may negotiate more off. If you do the lease cash it would be on top of that.

 

[njn007]

Here in SW Ohio I?m seeing GT2?s with $3000 to $4000 off MSRP and Premiums $2000 to $3000 off MSRP. And that is advertised, they may negotiate more off. If you do the lease cash it would be on top of that.

That?s not bad. I?d consider myself lucky to get the GT2 to 42k, including the $2k for AWD. For me, it has to be AWD. And also saving since the safety features are all included at that price, unlike the Premium.

Hopefully it?s not too impossible a task. I have 2 dealers within reasonable distance, both with a few trims available.


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[blesken]

Well good luck, perhaps we?ll have another Stinger owner soon.

 

[Yamnave]

Ive had it explained by two different kia dealer reps that putting a large amount down on a lease isn't the best idea from an insurance standpoint. The basic premise is that when you lease you don't own the car ever, its kia's. Therefore if you total your car before your lease ends, insurance pays kia, not you, for all the damages. Let me throw in some fake numbers to explain why this matters.

Say your lease is 500$/month and you put 10k down on the lease. you essentially just paid for 20 months up front. However, if something happens to the car, say it gets totaled, in month 4, insurance pays kia for the value of a 4 month old car, and you get dropped from the lease. Unfortunately you still have 16 'prepaid' months left and didnt see any of that insurance money. You just gave kia a free 8k gift.

Hopefully this makes sense why you shouldn't put too much money down. Its probably better saving the money you would use as a downpayment in a savings account and use that money over the life of your lease to reduce your monthly payments. Of course no one plans on getting into an accident, but shit happens.

 

[ghedoicy]

shit happens.

-Matt

 

[blesken]

I?m not sure where the people you talked to got their information. My understanding is if a leased car is totaled, the insurance pays the total worth of the car at the time to you and you have to pay the lease company what is left on the lease. That would be the residual plus the remaining deprieciated cost. If you bought the lease down, then you owe less. This is no different than a car loan. However, if all was fair, the insurance amount would equal what you owe. Unfortunately cars depreciate quickly the first year to two. You could be upside down. You owe more than the car is worth. The same can happen with a traditional loan. Fortunately, many leasing companies (including Kia) include gap insurance, which would cover the difference if your car is totaled. You are actually paying for it, I'm sure, in the money factor. Bottom line is a lease is little different than a traditional car loan. Besides if you total your brand new leased Stinger, they want coming right back to get another one.

 

[blesken]

Here?s a reference.
https://pocketsense.com/what-happens-when-you-total-a-leased-car-12188254.html

 

[ghedoicy]

Bottom line is putting any money down on a lease is generally a bad idea... It doesn't do as much as if you were buying the vehicle.

Doesn't a Big Down Payment Help Me When I'm Leasing?
Not really. That's because leasing isn't like buying. Most people make down payments when they buy cars to do one or more of these five things:

1. Get a lower monthly payment.
2. Minimize interest charges.
3. Avoid being upside down in the event of a total loss of the car.
4. Get a loan approved.
5. Get a better interest rate.

Some of these things aren't an issue if you're leasing:

1. Getting a lower monthly payment: Making a sizable down payment will certainly reduce your monthly lease payments, but it probably won't save you a ton of money compared to the overall cost of ownership while you lease. That's because a low money factor means negligible interest charges.
2. Minimizing interest charges: If there's a low money factor, there's minimal interest.
3. Avoiding the "upside down" trap: Most leases come with gap insurance, which minimizes the chances of being on the hook for any unpaid balance if the car is totaled or stolen. If the loan amount exceeds the value of the vehicle at lease end, the difference in value is the bank's problem, not yours.
4. Getting a loan approved: In most cases, shoppers with good credit won't need to make a significant down payment in order to be approved for the best rates.
5. Getting a better interest rate: Making a bigger down payment won't get you a lower money factor. That's just how leasing works.

-Matt

 

[blesken]

That is all correct about leasing Matt. The real bottom line is you should only lease if you can afford to buy the car in cash. Sounds backwards, but leasing makes sense for someone with plenty of cash, but they can invest that cash in something much better return than a depreciating vehicle.

 

[njn007]

Well, I think I want to lease because I?ve always seen myself as a car freak that can?t hold onto cars for long. So rather than hassling with selling them, I think leasing is appealing. Maybe it?s stupid, but it?s nerdy for me!


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[blesken]

No that?s not stupid. I should have added, the only other time it makes sense to lease is if you turn a car relatively quickly. You won?t tie up your money in a car, and you always get to drive a new vehicle. There is a cost but if it is worth it to you, it makes perfect sense.

 

[njn007]

Here's my update- I'm curious as to whether anyone thinks this is a reasonable deal or not, given that it's almost July and we all know 2019s are on the way:

This is for the Premium trim, AWD, with the $2k Drive Wise package @ 10k/year (I test drove a Premium and GT1, and was happy enough with how much go the 4-cylinder has, and the slightly better MPG on it; the only GT2 they had was on the showroom floor).

All amounts in US Dollar; from a Southeastern Pennsylvania dealer

[table="width: 400, class: grid"]
[tr]
[td]MSRP[/td]
[td]40,200.00[/td]
[/tr]
[tr]
[td]"Selling Price"[/td]
[td]37,688.00[/td]
[/tr]
[tr]
[td]Gov't, Documentation, & Acq Fees[/td]
[td]961.00[/td]
[/tr]
[tr]
[td]Gross Capitalized Cost[/td]
[td]39,194.36[/td]
[/tr]
[tr]
[td]Rebate (KMF, until 7/9)[/td]
[td]-6,800.00[/td]
[/tr]
[tr]
[td]Cash Cap Reduction[/td]
[td]1,000.00[/td]
[/tr]
[tr]
[td]Net Cap Cost[/td]
[td]31,394.36[/td]
[/tr]
[tr]
[td]Money Down[/td]
[td]1,000[/td]
[/tr]
[tr]
[td]36-Month Lease Payment[/td]
[td]$455.36/mo[/td]
[/tr]
[/table]

I've been told this deal only stands until Monday, which is odd given that the Kia website has most deals going until 7/9, after the holiday.

Is this a good deal? No one seemed interesting in haggling on MSRP, but I also didn't quite stay long enough to get into haggling.

The finance guy bragged about selling 2 Stingers the day before, but I doubt his claims, especially given that both models I drove (the Premium and GT1) had less than 30 miles on them. They have about 8 models on the lot now.

I didn't get this price breakdown on the GT2, but I probably should've out of curiosity at least.

Thanks for all of your help! Here's hoping that I end up joining the Stinger club with a nice Micro Blue Pearl finish.