$7500 back on a lease??

[SaratogaLefty]

Lease and buyout. Recent Ioniq 5 owners (like me) have saved $6500 over straight purchasing.

The problem is some states do not make leases viable due to double taxation (I think TX and NY) so in those states the 45W loophole is almost no real savings.

What do you mean by "lease and buyout"? Are you saying buy it at the end of the 36 month lease or buy out the lease at inception?

 

[acadapter]

Yeah I did read it. Here is what I'm trying to find out. Assuming you do a 36 month lease, I was told you pay the first month's lease charge up front. Then the person I was talking to said you then do the buyout from the lease and you own the car. The question is if you go that route and do the buyout say in place of the second month's lease payment, do you still have to pay all the 36 months of interest? If so than no advantage to doing the buyout as you lose the option to give the car back at the end of the lease. If in fact you can avoid having to pay any interest except for the first month of the lease, then that would be a good deal. So just need some clarification on how much interest you would wind up paying.

So I put the same question out on the EV6 site. (I own one) and a guy responded from the i5 site with this......

To the question for is anyone doing this: Hell yeah. I just did it for the i5. It's completely legit and Hyundai/Kia are just catching up to what VW, BMW, and a few others have discovered. It boils down to, as a lease, the Corp/Business was always eligible for the credit since the IRA requirements don't apply to those transactions. Now, they are passing it through to the customer in order to remain competitive with the brands that are currently eligible.

I detailed the entire process in the Ioniq 5 thread here and my immediate buyout quote is post #115:

Ioniq 5 $7500 Lease Cash

To the comment about dealers wouldn't hold up their end - the answer is, dealers don't really know anything and they don't control anything associated with Hyundai Motor Finance Leases (or any other brands). The dealers are cashier's, and in my experience the dealer didn't even know about the section in the contract associated with Early Purchases.

I went in the day this became available (2/18) got the contract drafted and asked about the early purchase section. The dealer was unaware how it worked so I asked for time to read it while I waited for my down payment check. I read the entire contract, confirmed with a call to HMF Buyout Supervisory Office, signed and drove away on 03/04, executed buyout process in 03/09.


He even did one more thing which is to do an early buy out after the lease. So he got the $7500 and bought not leased the car in the end!

In case you need more information, I am that "guy." . My handle is the same in all 3 forums, and yes, we have a GV60, EV-6, and I5s (3; this lease purchase was our last pickup). Our first two I5s were purchased on reserved when the credit was still accessible before IRA kicked in.

1) Yes, the lease translates to a pass through now for the $7500 credit since we wouldn't get it due to the IRA changes

2) Yes, Hyundai Motor Financing has an early purchase clause where you can immediately buyout and basically just pay the Adjusted Cap Cost (more on that later) + $300 for the lease fee.

2a) Yes, some states will make you pay taxes on a secondary purchase transaction but this is not the norm.

2b) Maryland (where I live) has the same clause as Texas, but for some reason Texas' implementation is all over the place. In MD, if the purchaser is the same person(s) as the original leasee, no second tax charge.

3) We bought the i5 on the 4th and had the buyout quote on the 9th; mailed the check on the 10th.

Questions, feel free to ask. Happy to help anywhere I can.

 

[SaratogaLefty]

In case you need more information, I am that "guy." . My handle is the same in all 3 forums, and yes, we have a GV60, EV-6, and I5s (3; this lease purchase was our last pickup). Our first two I5s were purchased on reserved when the credit was still accessible before IRA kicked in.

1) Yes, the lease translates to a pass through now for the $7500 credit since we wouldn't get it due to the IRA changes

2) Yes, Hyundai Motor Financing has an early purchase clause where you can immediately buyout and basically just pay the Adjusted Cap Cost (more on that later) + $300 for the lease fee.

2a) Yes, some states will make you pay taxes on a secondary purchase transaction but this is not the norm.

2b) Maryland (where I live) has the same clause as Texas, but for some reason Texas' implementation is all over the place. In MD, if the purchaser is the same person(s) as the original leasee, no second tax charge.

3) We bought the i5 on the 4th and had the buyout quote on the 9th; mailed the check on the 10th.

Questions, feel free to ask. Happy to help anywhere I can.

I just picked up my GV60 today. Got what I think is a great deal. Started off at MSRP. Then received a higher than expected value for my trade in plus another $500 off the MSRP. Then also another $500 rebate because I'm a veteran. And the money factor while high was below what I was quoted last week. What I'm trying to understand is you are saying the "buyout" is essentially paying off the Adjusted Cap Cost, correct? What about the residual? Are you just paying off the lease but still enjoying the lease privilege of being able to wait until the end of the 36 months and then decide to either give the car back or buy it then or do you have to actually buy the car now (residual plus tax)? If you have to pay the Adjusted Cap Cost now and then still pay the residual plus tax later I guess I don't see any savings going this route?? Am I missing something?

 

[sakerror]

In case you need more information, I am that "guy." . My handle is the same in all 3 forums, and yes, we have a GV60, EV-6, and I5s (3; this lease purchase was our last pickup). Our first two I5s were purchased on reserved when the credit was still accessible before IRA kicked in.

1) Yes, the lease translates to a pass through now for the $7500 credit since we wouldn't get it due to the IRA changes

2) Yes, Hyundai Motor Financing has an early purchase clause where you can immediately buyout and basically just pay the Adjusted Cap Cost (more on that later) + $300 for the lease fee.

2a) Yes, some states will make you pay taxes on a secondary purchase transaction but this is not the norm.

2b) Maryland (where I live) has the same clause as Texas, but for some reason Texas' implementation is all over the place. In MD, if the purchaser is the same person(s) as the original leasee, no second tax charge.

3) We bought the i5 on the 4th and had the buyout quote on the 9th; mailed the check on the 10th.

Questions, feel free to ask. Happy to help anywhere I can.

Amazing post and effort! Thank you!

Would you please help me with this offer? i got it online, i knew you have a GV60, what is your opinion about the initial PRICE and the residual value around 52%? Do i proceed with this lease and i buyout in cash later? or you think i can negotiate anything better?

Base Model $59,290
Packages and Options
$130

• Wheel Locks $85
• First Aid Kit $45

Manufacturer Destination Charge $1,125
MSRP (Sticker Price) $60,545
Genesis of Dublin Price $60,545
Manufacturer Rebate -$7,500
Total Purchase Price $53,045
LEASE SUMMARY Term 36 months

Annual Mileage 10,000
Residual Value (52%) $31,483
Total Due At Signing $6,000

• First Payment $817
• Capitalized Cost Reduction $3,389
• Estimated Registration & Fees $724
• Sales Tax $1,070

Monthly Payment
$816.73

 

[sakerror]

In case you need more information, I am that "guy." . My handle is the same in all 3 forums, and yes, we have a GV60, EV-6, and I5s (3; this lease purchase was our last pickup). Our first two I5s were purchased on reserved when the credit was still accessible before IRA kicked in.

1) Yes, the lease translates to a pass through now for the $7500 credit since we wouldn't get it due to the IRA changes

2) Yes, Hyundai Motor Financing has an early purchase clause where you can immediately buyout and basically just pay the Adjusted Cap Cost (more on that later) + $300 for the lease fee.

2a) Yes, some states will make you pay taxes on a secondary purchase transaction but this is not the norm.

2b) Maryland (where I live) has the same clause as Texas, but for some reason Texas' implementation is all over the place. In MD, if the purchaser is the same person(s) as the original leasee, no second tax charge.

3) We bought the i5 on the 4th and had the buyout quote on the 9th; mailed the check on the 10th.

Questions, feel free to ask. Happy to help anywhere I can.

Oh and i forgot to ask you, i live in San Francisco and my intention is to buy the lease DURING the first month, so does it matter to choose 24 or 36months? 7500miles or 10miles etc...? and what about the downpayment? is there a difference if i make a large prepayment?

 

[acadapter]

I just picked up my GV60 today. Got what I think is a great deal. Started off at MSRP. Then received a higher than expected value for my trade in plus another $500 off the MSRP. Then also another $500 rebate because I'm a veteran. And the money factor while high was below what I was quoted last week. What I'm trying to understand is you are saying the "buyout" is essentially paying off the Adjusted Cap Cost, correct? What about the residual? Are you just paying off the lease but still enjoying the lease privilege of being able to wait until the end of the 36 months and then decide to either give the car back or buy it then or do you have to actually buy the car now (residual plus tax)? If you have to pay the Adjusted Cap Cost now and then still pay the residual plus tax later I guess I don't see any savings going this route?? Am I missing something?

No, you are not paying off the lease. The terms are different for early purchase and there is a specific section that addresses early purchase only (Section 22D). Early purchase works the same way it does with a car loan; whatever interest (in the lease we will call it Rent Charge) you've paid up until the point of your purchase date, is gone. Any future interest is null and void.

In the simplest terms, if you bought a 60k car and received $7500 off and had no other taxes and/or fees, your ACC would be $52500. If you got your lease paid immediately after opening, your buyout has nothing to do with the residual value and is instead, your ACC (minus the portion of your first payment that went towards your ACC amount since the first payment is due at signing).

If you wait 12 months and do it, whatever portion of your payment was for Rent Charge, it's gone. Whatever portion was paying down your ACC principal, you get credit for that and your ACC is reduced by that number.

The entire thread is here:

$7500 HMF Lease Cash Available Today - 2/18

Didn't see this mentioned yet, so wanted to bring it up to see what others are doing/seeing. I took another family member in to get their i5 Limited that I negotiated and changing to the lease to get the $7500 rebate is now an option. This made sense to me since you can purchase before the...

www.ioniqforum.com

 

[acadapter]

Oh and i forgot to ask you, i live in San Francisco and my intention is to buy the lease DURING the first month, so does it matter to choose 24 or 36months? 7500miles or 10miles etc...? and what about the downpayment? is there a difference if i make a large prepayment?

Any down payments or adjustments in months create a different amount of interest paid in your first payment rent charge. It's likely not going to be a large amount but your first payment which is included in your lease opening is going to go up or down.

In my case, we put down $20k, and our first payment was $277. If you paid nothing down, your payment will likely be $1000ish.

For most folks I would say, not to worry about down payments.

 

[acadapter]

Amazing post and effort! Thank you!

Would you please help me with this offer? i got it online, i knew you have a GV60, what is your opinion about the initial PRICE and the residual value around 52%? Do i proceed with this lease and i buyout in cash later? or you think i can negotiate anything better?

Base Model $59,290
Packages and Options
$130

• Wheel Locks $85
• First Aid Kit $45

Manufacturer Destination Charge $1,125
MSRP (Sticker Price) $60,545
Genesis of Dublin Price $60,545
Manufacturer Rebate -$7,500
Total Purchase Price $53,045
LEASE SUMMARY Term 36 months

Annual Mileage 10,000
Residual Value (52%) $31,483
Total Due At Signing $6,000

• First Payment $817
• Capitalized Cost Reduction $3,389
• Estimated Registration & Fees $724
• Sales Tax $1,070

Monthly Payment
$816.73

The 52% residual (doesn't really matter much if you are buying out immediately because the ACC is the purchase number) comes from a calculator that Hyundai uses. It takes into consideration miles, months, and purchase price.

My questions:

1) Down Payment of $6000, what's that for or did you optionally just decide that or to pay your taxes, etc

2) Capital Cost Reduction. Same as above for #1. Is that the difference between taxes and your optional down payment.

 

[SaratogaLefty]

Ok so now I think I understand. We request the "Buyout" number from the Lessor (Hyundai Lease Titling Trust) and it should approximate the "Adjusted Capitalized Cost". Then after we pay the "Buyout" amount and most likely the state/local tax on that amount, we own the car free and clear. So in essence we have now purchased the car for our negotiated price minus the $8000 ($7500+ $500 Vet credit), correct?

 

[acadapter]

Ok so now I think I understand. We request the "Buyout" number from the Lessor (Hyundai Lease Titling Trust) and it should approximate the "Adjusted Capitalized Cost". Then after we pay the "Buyout" amount and most likely the state/local tax on that amount, we own the car free and clear. So in essence we have now purchased the car for our negotiated price minus the $8000 ($7500+ $500 Vet credit), correct?

This surmises it nicely with the asterisk on the latter. It depends on your state for taxes.

Some states collect taxes at POS (when the lease was created) and that's it, some do it on both transactions.

Example: my taxes for the entire car were paid at POS. When I bought out, those were already paid so all that was left was the ACC.

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[SaratogaLefty]

This surmises it nicely with the asterisk on the latter. It depends on your state for taxes.

Some states collect taxes at POS (when the lease was created) and that's it, some do it on both transactions.

Example: my taxes for the entire car were paid at POS. When I bought out, those were already paid so all that was left was the ACC.

Yeah here in CA they charge you taxes on each monthly lease payment. I'm pretty sure I will have to pay the taxes if I do the Buyout. So in my case the various rebates/discounts I am receiving will more than offset the taxes so effectively when I do the buyout I will be paying less than MSRP including everything, so that seems like a good deal and significantly less than running out the lease and paying the residual at that time. Only giving up the right to give the car back at the end of the lease.

 

[voxel]

2a) Yes, some states will make you pay taxes on a secondary purchase transaction but this is not the norm.

2b) Maryland (where I live) has the same clause as Texas, but for some reason Texas' implementation is all over the place. In MD, if the purchaser is the same person(s) as the original leasee, no second tax charge.

Technically the first purchase was made by the leasing company as they own the vehicle (not you) and when you buy out the lease you become the second owner.

Buyout in states like FL (and a few others) can not be through HMF. It has to be through a Hyundai dealership or broker (with dealers license).

 

[SaratogaLefty]

I'm almost positive CA does charge any person who buys a used car sales tax. This is why many people who do a private sale will put a lower price on the Pink Slip "Bill of Sale" so the new owner pays less sales tax.

 

[acadapter]

Technically the first purchase was made by the leasing company as they own the vehicle (not you) and when you buy out the lease you become the second owner.

Buyout in states like FL (and a few others) can not be through HMF. It has to be through a Hyundai dealership or broker (with dealers license).

I'm almost positive CA does charge any person who buys a used car sales tax. This is why many people who do a private sale will put a lower price on the Pink Slip "Bill of Sale" so the new owner pays less sales tax.

Again, this is state specific (in the way it's treated for sale purchases). In Maryland, the relationship is considered a lease-to-purchase arrangement if (and only if) the leasee doesn't change.

It's definitely not possible to lump all 50 states into the same boat on every step, so due diligence is required to understand any nuanced variables. Secondly, this applies to handing the purchase like Voxel said. Credit unions and banks will also interpret a loan for refinance differently in terms of new vs. used, etc.

To Saratoga's point, yes this is what the states are trying to protect against. It's also why some states will charge you tax on any down payment up front, to avoid missing collecting taxes on that amount in a secondary sale.

 

[Mcc]

Technically the first purchase was made by the leasing company as they own the vehicle (not you) and when you buy out the lease you become the second owner.

I’m not sure about “technically “ but in reality, I bought out my lease after a month and Genesis service and warranty consider me to be the FIRST owner.

 

[voxel]

I’m not sure about “technically “ but in reality, I bought out my lease after a month and Genesis service and warranty consider me to be the FIRST owner.

That's Genesis. We are talking about state law. The title belongs to the leasing company. If you total a leased car... the payout goes to the leasing company (not you).

 

[Sev]

I've been lurking this forum (and the Ioniq forum) for a while now and a lot of these threads have been super helpful, so I appreciate everyone's experience being shared! The GV60 Advanced caught my eye recently after seeing the $7500 credit promo and I've also been trying to weigh out the cons/pros of doing a lease and early buyout in order to take advantage of the credit promo as much as possible.

The promo on the Genesis website mentions that $5,999 is due upon signing for a monthly payment of $689, but I'm having a hard time justifying if this would even be considered a good deal or not, if I were to do an early buyout. I've seen other folks on here and on the Ioniq forum being quoted a down payment that is much less than mine, so I wanted to ask here if putting the down payment of $8,312 (after taxes and fees) even makes any sense or if I'm just getting swindled. I was able to get them to remove all the add-on's so it's being sold at MSRP, so they weren't budging on any discounts. Funny enough, this dealership initially told me that they couldn't even match the lease special being promoted by Genesis since they initially required me to put $10K down but later backtracked this by offering this updated quote

I'm based in CA btw.

 

[acadapter]

I've been lurking this forum (and the Ioniq forum) for a while now and a lot of these threads have been super helpful, so I appreciate everyone's experience being shared! The GV60 Advanced caught my eye recently after seeing the $7500 credit promo and I've also been trying to weigh out the cons/pros of doing a lease and early buyout in order to take advantage of the credit promo as much as possible.

The promo on the Genesis website mentions that $5,999 is due upon signing for a monthly payment of $689, but I'm having a hard time justifying if this would even be considered a good deal or not, if I were to do an early buyout. I've seen other folks on here and on the Ioniq forum being quoted a down payment that is much less than mine, so I wanted to ask here if putting the down payment of $8,312 (after taxes and fees) even makes any sense or if I'm just getting swindled. I was able to get them to remove all the add-on's so it's being sold at MSRP, so they weren't budging on any discounts. Funny enough, this dealership initially told me that they couldn't even match the lease special being promoted by Genesis since they initially required me to put $10K down but later backtracked this by offering this updated quote

I'm based in CA btw.

So, I just cruised through this one for a quick second, nothing here is out of the ordinary --- In my experience, requiring a down payment has more to do with getting the payment into a certain tier or qualifying a borrower as long as no additional fees were added to the trasaction. Of course, more DP also means less rent charge applicable, but that's to be expected.

Here is what I see ---

Upfront charges of $1567 are $750 Acquisition Fee (I've seen this as low as $400 and as high as $800, but I believe the number is actually set by HMF) + $700 license fee (state specific, you can confirm it's accuracy) and $85 doc fee (great, our dealers charge generally whatever the state allows ~$400). no alarms here

Total amount applied up front is $2308.30 which is your first month's payment of $741.30 + the number above. Again, nothing wrong here.

Cash Down: $8312 + $7500 = $15812. That - $2308.30 = $13503.70. This number matches your total cap reduction. All good here.

Go back to your total price before any of the above --- $61,031.75 which is prior to fees and taxes on your down payment total of $1111.25 and fee of $41.75. Those taxes look to be ~7% of your down payment. If your taxes in your state are close to that, safe again.
This leaves you with the remaining balance of $48,639.30 which is your total minus your cash down and your $7500.

If you didn't get the $7500, your bill would have been $56,139.30. If you work backwards, the difference between your total ACC and your bill had you not received the $7500, is $56,880.30 - $7500 - first months payment which you are making ($741) = $48,639.30. Spot on.

This deal shakes out to what you would have paid before the $7500 minus that credit. No hidden fees. Someone feel free to check my math.

 

[Trixie86]

So, I just cruised through this one for a quick second, nothing here is out of the ordinary --- In my experience, requiring a down payment has more to do with getting the payment into a certain tier or qualifying a borrower as long as no additional fees were added to the trasaction. Of course, more DP also means less rent charge applicable, but that's to be expected.

Here is what I see ---

Upfront charges of $1567 are $750 Acquisition Fee (I've seen this as low as $400 and as high as $800, but I believe the number is actually set by HMF) + $700 license fee (state specific, you can confirm it's accuracy) and $85 doc fee (great, our dealers charge generally whatever the state allows ~$400). no alarms here

Total amount applied up front is $2308.30 which is your first month's payment of $741.30 + the number above. Again, nothing wrong here.

Cash Down: $8312 + $7500 = $15812. That - $2308.30 = $13503.70. This number matches your total cap reduction. All good here.

Go back to your total price before any of the above --- $61,031.75 which includes taxes on your down payment total of $1111.25 and fee of $41.75. Those taxes look to be ~7% of your down payment. If your taxes in your state are close to that, safe again.
This leaves you with the remaining balance of $48,639.30 which is your total minus your cash down and your $7500.

If you didn't get the $7500, your bill would have been $56,139.30. If you work backwards, the difference between your total ACC and your bill had you not received the $7500, is $56,880.30 - $7500 - first months payment which you are making ($741) = $48,639.30. Spot on.

This deal shakes out to what you would have paid before the $7500 minus that credit. No hidden fees. Someone feel free to check my math.

Nicely done. If I understood more about leasing, I could probably find some deals and save a few schillings. I knew I should've listened more in skool. Until then, buy and hold. BTW, you do know you're going to get bombarded with "is this a good deal?" questions. I'm interested in your responses.

 

[acadapter]

Nicely done. If I understood more about leasing, I could probably find some deals and save a few schillings. I knew I should've listened more in skool. Until then, buy and hold. BTW, you do know you're going to get bombarded with "is this a good deal?" questions. I'm interested in your responses.

Anytime I can help folks do what's best for us, I try to help out! - Yes, that post from i5 has now spanned into 3 different forums in just 3 weeks lol

I didn't even get into how, if folks were bothered by the self provided down payment, they could technically complete this transaction as mentioned, then when they early purchase/refinance, if their credit union(s) function like most of mine, they could purchase with their loan for the 120% of the cars value. Their credit union(s) will likely calculate based on the original new price.