2015 Genesis 3.8 AWD Lease

[Mr.Gekko]

Hey guys, I'm new to the forum. Stopped by a Hyundai dealer today to kill some time and fell in love with the 2015 Genesis.

After bargaining, the dealer offered me a 3.8 V6 AWD fully loaded model (signature, tech, and ultimate packages) for a 36 month lease with 10k miles a year (didn't need the 12k/year, I just need this for a weekend car) at $450/month and $2,000 initial payment (including a DMV, bank, taxes, and 1st month's payment).

ALSO, I have a 2013 G37S 6MT with only 9k miles on it and 2 months payments left on the lease. He offered to take it off my hands without rolling in the leftover payments.

I took his card and decided to do some research on the car and current lease deals. This isn't my 2nd, 3rd, or 4th lease so I don't trust a dealer's word, nor do I go by the national ad.

Thought I'd run this by a Genesis forum to see what others think about the deal and compare it to what others were offered. Thanks for all the input in advance!

 

[Mr.Gekko]

 

[DFWGenny]

What's the residual on the car? What is the interest rate? Is it a fair market value lease?

Need a little more to go on here.

 

[Mr.Gekko]

What's the residual on the car? What is the interest rate? Is it a fair market value lease?

Need a little more to go on here.

Not sure about residual or interest. I usually compare deals to what I see most others are paying.

I have a high credit score so I qualify for T1 credit and the recent grad rebate.

2015 Genesis 3.8 AWD w/ Ultimate

36 month lease
$450/month
$2,000 initial payment including 1st month, bank fee, DMV, etc...

Was hoping some people can share what they paid for their 2015 lease.

 

[Mark_888]

Not sure about residual or interest. I usually compare deals to what I see most others are paying.

Does that mean you have no interest whatsoever in buying the car at the end of the lease term?

 

[Mr.Gekko]

Does that mean you have no interest whatsoever in buying the car at the end of the lease term?

Nope. I lease cars because I register them under my business and write it off. No interest in buying it out. Just wanted to make sure I get a good deal.

 

[Mark_888]

Nope. I lease cars because I register them under my business and write it off. No interest in buying it out. Just wanted to make sure I get a good deal.

There is no tax benefit to leasing vs buying. If you buy, you can depreciate the asset as a business expense, and that typically results in a larger tax deduction than lease expense.

 

[metrathon]

It's not great but not bad either. I would say it's about right. Congrats.

 

[DFWGenny]

I think you will need to take those numbers, figure what you can buy the car for with financing and then run the numbers past you CPA on taking a stab at what the residual price will be when you sell it. The lease will give you better cash flow.

Just curious, if it's just a weekend car, is your business just a weekend business?

 

[Brian1940king]

You should jump all over this deal. Run, don't walk.

For my 2015 Genesis AWD 3.8, Signature:
I'm paying $640 per mo. 36 mo. 12k mi per year, no money down. Includes taxes.

I went to 3 dealers, all were within $4 per month after negotiations.
One dealer wanted me to give him $2k to buyout my Buick lease. But, the monthly payment was the same.

Same deal with or without my early lease termination trading.

They took my 2012 Buick Lacrosse with 41k mi, at month 31 of a 39 month lease. The buyout was $19k. They completed the buyout 30 days after purchase.
That was 2 months ago. They are still trying to sell it after reducing the price twice.

Good luck.

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[metrathon]

You should jump all over this deal. Run, don't walk.

For my 2015 Genesis AWD 3.8, Signature:
I'm paying $640 per mo. 36 mo. 12k mi per year, no money down. Includes taxes.

I went to 3 dealers, all were within $4 per month after negotiations.
One dealer wanted me to give him $2k to buyout my Buick lease. But, the monthly payment was the same.

Same deal with or without my early lease termination trading.

They took my 2012 Buick Lacrosse with 41k mi, at month 31 of a 39 month lease. The buyout was $19k. They completed the buyout 30 days after purchase.
That was 2 months ago. They are still trying to sell it after reducing the price twice.

Good luck.

You must reaaaaaaaaly love your Hyundai. For that price you can get into lots of great cars: medium spec 535i or E350, fully spec GS 350 F-Sport or Q50/70, etc, etc.

Were you under duress?

 

[Mark_888]

I think you will need to take those numbers, figure what you can buy the car for with financing and then run the numbers past you CPA on taking a stab at what the residual price will be when you sell it. The lease will give you better cash flow.

I doubt he has a CPA, since they would have advised him that buying (depreciation deduction) is more tax advantageous than leasing (lease deduction). He may have leased anyway, but he wouldn't have the misunderstanding about which one has the best tax benefits if he had a CPA to advise him.

Just curious, if it's just a weekend car, is your business just a weekend business?

I suspect he will take the 5th on that one.

 

[Mr.Gekko]

I doubt he has a CPA, since they would have advised him that buying (depreciation deduction) is more tax advantageous than leasing (lease deduction). He may have leased anyway, but he wouldn't have the misunderstanding about which one has the best tax benefits if he had a CPA to advise him.

A number of factors contributed to my decision to lease vs. buy.

1. If (G-d forbid) I get into a car accident, I don't have to worry about having it show on a Carfax, affect the resale value, and the difficulties of having to sell it or the lowball I would get on a trade-in (although, trade-in's do come with tax advantages).

2. In the past, I have purchased and financed vehicles, and I don't like to deal with the headache of trying to sell it privately as it may take 1 week, 1 month, or maybe even a whole year. And you still may not receive the price you were hoping for.

2. If I purchase a car, deduct depreciation, and then sell it for more than I deducted, I would have to pay back taxes. Compared to a lease where I deduct the monthly payment, gas, and maintenance without having to worry about back taxes.

3. With a lease, I change the oil every 3K miles and fill up the gas tank, that's it. Don't have to worry about maintenance.

4. Every 2-3 years I have the opportunity to hand over the keys and get a brand new car...without having to worry about the warranty running out or other previously stated factors.

5. If I REALLY like the car and want to keep it (haven't had this situation yet ), I have the option of buying out the car and taking the tax advantages you are talking about. But, as I have said previously, I have no interest in this option, because I can always hand over the car and get a new lease (probably at a better price considering the model will be dated), and continue deducting the lease expense.

The topic of leasing vs. buying has arisen on many car forums, on multiple occasions. I'm pretty sure if I snoop around I can probably find a thread or three about it here too. Personally, I feel that in my situation, leasing is the better option.

I suspect he will take the 5th on that one.

Once again, wanted to know if I was offered a good deal. If not, or, if anyone recently leased a similarly built Genesis, would love it if you can share what you are paying.

And again, thanks for all the input guys.

 

[DFWGenny]

A good deal on a car is based on:

• Price of the car
• Interest Rate on the loan
• Value of the trade

In a lease, you have those factors PLUS:

• Residual Value of the car
• Whether the residual is Fixed or Fair Market

Just giving us the term and the payment is like when you are at a dealership and they are selling to a monthly payment. A sucker's play.

That last point is important. If the company is contractually obligated to sell you the car at a fixed residual, but the demand and real value of the car has risen, you can buy the car for the discounted price and then trade it for a new car using the higher current value. If it hasn't, you still have the option of just turning in the keys and walking away.

 

[Mr.Gekko]

• Whether the residual is Fixed or Fair Market

...

That last point is important. If the company is contractually obligated to sell you the car at a fixed residual, but the demand and real value of the car has risen, you can buy the car for the discounted price and then trade it for a new car using the higher current value. If it hasn't, you still have the option of just turning in the keys and walking away.

By this, are you referring to an open-ended vs. close-ended lease?

Can't an open-ended lease work against me aswell? For example, if the FMV is less than the depreciation I paid, I would have to pay the difference, no?

I usually tend to opt towards closed-ended leases.

 

[DFWGenny]

A number of factors contributed to my decision to lease vs. buy.

1. If (G-d forbid) I get into a car accident, I don't have to worry about having it show on a Carfax, affect the resale value, and the difficulties of having to sell it or the lowball I would get on a trade-in (although, trade-in's do come with tax advantages). Not sure if the leasing company might try to nick you for diminished value.

2. In the past, I have purchased and financed vehicles, and I don't like to deal with the headache of trying to sell it privately as it may take 1 week, 1 month, or maybe even a whole year. And you still may not receive the price you were hoping for. Agreed

2. If I purchase a car, deduct depreciation, and then sell it for more than I deducted, I would have to pay back taxes. Compared to a lease where I deduct the monthly payment, gas, and maintenance without having to worry about back taxes. It has been a while, but I think that is rolled back in as profit at the time of sale for that tax year. It's not a big deal.

3. With a lease, I change the oil every 3K miles and fill up the gas tank, that's it. Don't have to worry about maintenance. Even under a lease, you need to do scheduled maintenance. How is that different if you own the car? You can dog it whether you lease or own it.

4. Every 2-3 years I have the opportunity to hand over the keys and get a brand new car...without having to worry about the warranty running out or other previously stated factors. If you like having your seat in a new car every 2-3 years, leasing is the way to go.

5. If I REALLY like the car and want to keep it (haven't had this situation yet ), I have the option of buying out the car and taking the tax advantages you are talking about. But, as I have said previously, I have no interest in this option, because I can always hand over the car and get a new lease (probably at a better price considering the model will be dated), and continue deducting the lease expense. See point 4

The topic of leasing vs. buying has arisen on many car forums, on multiple occasions. I'm pretty sure if I snoop around I can probably find a thread or three about it here too. Personally, I feel that in my situation, leasing is the better option.

If you are the type of person that has to drive a newish car, leasing is the way to go whether you write it off or not.

I'm the type that stays in a car for usually at least 10 years, if it is a good car, and saves the car payment. I will put down a big down payment and still finance the car for five years, because that is half of it's life. My last car went for 17 years and didn't start to get annoying until the 16 year mark. But that's just me.

 

[DFWGenny]

By this, are you referring to an open-ended vs. close-ended lease?

Can't an open-ended lease work against me aswell? For example, if the FMV is less than the depreciation I paid, I would have to pay the difference, no?

I usually tend to opt towards closed-ended leases.

It has been a LONG time since I looked at leasing, but back then, most residues were fixed. If the leasing company messed up on figuring the residual, it was their loss. One car company took a huge haircut, I would have to do some research. I know that in response to the hot used car market, some leases are now structured to remove the profit play I described. I have not heard of on that puts the risk on the lessee, but there could be some second or third tier lessors that do that to sub-prime customers. If I were to lease, I would have to research deeper on the back-end deal.

Most car salesmen lease their cars. I would get friendly with a few P&I guys at reputable dealerships and see what they look for in a lease when they lease their car.

 

[Mark_888]

A number of factors contributed to my decision to lease vs. buy.

1. If (G-d forbid) I get into a car accident, I don't have to worry about having it show on a Carfax, affect the resale value, and the difficulties of having to sell it or the lowball I would get on a trade-in (although, trade-in's do come with tax advantages).

2. In the past, I have purchased and financed vehicles, and I don't like to deal with the headache of trying to sell it privately as it may take 1 week, 1 month, or maybe even a whole year. And you still may not receive the price you were hoping for.

2. If I purchase a car, deduct depreciation, and then sell it for more than I deducted, I would have to pay back taxes. Compared to a lease where I deduct the monthly payment, gas, and maintenance without having to worry about back taxes.

3. With a lease, I change the oil every 3K miles and fill up the gas tank, that's it. Don't have to worry about maintenance.

4. Every 2-3 years I have the opportunity to hand over the keys and get a brand new car...without having to worry about the warranty running out or other previously stated factors.

5. If I REALLY like the car and want to keep it (haven't had this situation yet ), I have the option of buying out the car and taking the tax advantages you are talking about. But, as I have said previously, I have no interest in this option, because I can always hand over the car and get a new lease (probably at a better price considering the model will be dated), and continue deducting the lease expense.

The topic of leasing vs. buying has arisen on many car forums, on multiple occasions. I'm pretty sure if I snoop around I can probably find a thread or three about it here too. Personally, I feel that in my situation, leasing is the better option.

I understand that there are reasons why people may want to lease, I was just pointing out that there is no income tax advantage to leasing (despite the common misconception that some people have).

 

[Mark_888]

It has been a LONG time since I looked at leasing, but back then, most residues were fixed. If the leasing company messed up on figuring the residual, it was their loss. One car company took a huge haircut, I would have to do some research.

When manufacturers have to take a haircut on residual value, it is usually because the marketing people are trying to be very aggressive and overly optimistic about the true residual value to make the lease more attractive, and to sell more cars now. It's not really a "mistake" since they really know they are being aggressive/optimistic, but they have to meet their sales targets now, and if they don't then they will not even be around in 3 years to suffer the consequences.

 

[DFWGenny]

When manufacturers have to take a haircut on residual value, it is usually because the marketing people are trying to be very aggressive and overly optimistic about the true residual value to make the lease more attractive, and to sell more cars now. It's not really a "mistake" since they really know they are being aggressive/optimistic, but they have to meet their sales targets now, and if they don't then they will not even be around in 3 years to suffer the consequences.

True-dat