How to Take Advantage of $7500 Lease Incentive in U.S.

[Grayson]

If you want to lease and buy-out, this is what I did.

1) Get price of car with no add-ons. (Negotiate MSRP price as low as possible)
2) Ask for the HMF Lease Cash Offer (-$7500)
3) Wait for lease to be transferred to Genesis Finance
4) Sign HMF Lease
5) Secure your Financing for payoff if you need financing. Otherwise, skip this step
6) Create account with Genesis Finance once they've received the lease
7) Request Buyout on the Genesis Finance website. If the numbers don't reflect the first month payment, wait a few days until they do. Note that there is a $300 buyout fee
8) Give your financing the buyout quote (if you did step #5), or get a cashier's check from your bank. Follow mail-in instructions (or take to dealer if your state requires in person payoff)
9) Wait for check to be cashed
10) Request Plate Transfer if transferring existing plates. Otherwise, skip this step
10) Wait for Genesis Finance to mail you the title.
11) Request Bill of Sale from Genesis Finance. They sent it to me via e-mail.
12) Take Title, Bill of Sale, and Lease Agreement to DMV. I had to pay $162 to register in MD.

 

[ntrainer]

Fantastic instructions, Grayson73. Given that the $7500 offer is good everywhere (since it's from Genesis, not from the dealers), it looks like this enables us to easily play dealers off one another to get the best deal, period, and also to get the $7500 off via leasing.

Since we've never leased before, of course I'm quite nervous that this will somehow turn into a never-ending waiting game (e.g. "Oh, we can't create an account with Genesis Finance until we have all the paperwork from your dealer," or "Oh, we didn't get your check until 7 days had passed, at which point that was not the correct buyout amount and now you owe more," etc.). Is that a real risk? Anybody had that problem?

Let me also ask this -- do all Genesis leases have the exact same $300 buyout fee? Is there a risk that some leases don't permit immediate buyouts?

Also, is there any difference between dealers in terms of the leasing fees? I'm learning, for example, that there's a $750 "acquisition fee" for establishing the lease. (This plus the buyout fee will obviously knock $1,050 off my $7,500 "savings" right off the bat.) Is that acquisition fee the same at all dealers? Are the other bogus fees (e.g. document fee, electronic filing fee, title fee) the same for leasing vs. buying?

What I'm trying to do, here, is create a simple mechanism for me to get "the best" deal while spending the least time dealing with multiple dealerships in endless negotiating rounds. Buying cash is pretty simple: I have a dollar figure from, say, 5-6 dealerships, and I take the lowest number to the dealer closest to me to ask them to match it. If not, hell, I'll drive a few miles to get that great deal.

In this case, do I need to get full on leasing quotes from everybody before knowing "the best" deal? Tonight -- testing the waters a bit -- I spoke with a dealer in suburban Chicago who has the exact vehicle I'm targeting (right colors, both exterior & interior, right trim level). I mentioned I was looking for the best deal, knowing that their web site is already taking $3,000 off MSRP. He said for a cash offer he could go to $4,000 off, and then immediately pivoted to mention the HMF Lease Cash Offer, to which he said he could (only) add $1,000 in dealer price reductions. I asked why not the full $4K and he claimed that at $1,000 off he was giving me invoice pricing, that for a cash offer "the government" was paying him $3K, so the two deals are equivalent.

Now: I realize most of what he said was a lie, but it looks like I need to get every dealership's (a) full cash offer and also get the offer they would make including the HMF Lease Cash Offer. Is that right? Obviously I'm not above a little work, here, but I'd like to minimize the work if possible. Did you discuss the $ off MSRP separately from the HMF Lease Cash Offer, and basically say, "Of course you will combine the two in my deal sheet?"

I'll also mention that I can see from a different post that you bought your GV60 from Chantilly Genesis. We had a ludicrously terrible visit with them; our salesman claimed that they don't trade vehicles with any other dealership outside the DMV and therefore if we wanted a color combination not in stock I would just have to talk to whatever dealership had that car. He was literally the only Genesis salesman who said this to us. Bizarre. I've written them off at this point, but perhaps I'll go back when we're truly needing the car. (We don't actually need this car until the fall... but, you know, for the right price I suppose we'd get it now.)

 

[berkeleysquirrel]

Fantastic instructions, Grayson73. Given that the $7500 offer is good everywhere (since it's from Genesis, not from the dealers), it looks like this enables us to easily play dealers off one another to get the best deal, period, and also to get the $7500 off via leasing.

Since we've never leased before, of course I'm quite nervous that this will somehow turn into a never-ending waiting game (e.g. "Oh, we can't create an account with Genesis Finance until we have all the paperwork from your dealer," or "Oh, we didn't get your check until 7 days had passed, at which point that was not the correct buyout amount and now you owe more," etc.). Is that a real risk? Anybody had that problem?

Let me also ask this -- do all Genesis leases have the exact same $300 buyout fee? Is there a risk that some leases don't permit immediate buyouts?

Also, is there any difference between dealers in terms of the leasing fees? I'm learning, for example, that there's a $750 "acquisition fee" for establishing the lease. (This plus the buyout fee will obviously knock $1,050 off my $7,500 "savings" right off the bat.) Is that acquisition fee the same at all dealers? Are the other bogus fees (e.g. document fee, electronic filing fee, title fee) the same for leasing vs. buying?

What I'm trying to do, here, is create a simple mechanism for me to get "the best" deal while spending the least time dealing with multiple dealerships in endless negotiating rounds. Buying cash is pretty simple: I have a dollar figure from, say, 5-6 dealerships, and I take the lowest number to the dealer closest to me to ask them to match it. If not, hell, I'll drive a few miles to get that great deal.

In this case, do I need to get full on leasing quotes from everybody before knowing "the best" deal? Tonight -- testing the waters a bit -- I spoke with a dealer in suburban Chicago who has the exact vehicle I'm targeting (right colors, both exterior & interior, right trim level). I mentioned I was looking for the best deal, knowing that their web site is already taking $3,000 off MSRP. He said for a cash offer he could go to $4,000 off, and then immediately pivoted to mention the HMF Lease Cash Offer, to which he said he could (only) add $1,000 in dealer price reductions. I asked why not the full $4K and he claimed that at $1,000 off he was giving me invoice pricing, that for a cash offer "the government" was paying him $3K, so the two deals are equivalent.

Now: I realize most of what he said was a lie, but it looks like I need to get every dealership's (a) full cash offer and also get the offer they would make including the HMF Lease Cash Offer. Is that right? Obviously I'm not above a little work, here, but I'd like to minimize the work if possible. Did you discuss the $ off MSRP separately from the HMF Lease Cash Offer, and basically say, "Of course you will combine the two in my deal sheet?"

I'll also mention that I can see from a different post that you bought your GV60 from Chantilly Genesis. We had a ludicrously terrible visit with them; our salesman claimed that they don't trade vehicles with any other dealership outside the DMV and therefore if we wanted a color combination not in stock I would just have to talk to whatever dealership had that car. He was literally the only Genesis salesman who said this to us. Bizarre. I've written them off at this point, but perhaps I'll go back when we're truly needing the car. (We don't actually need this car until the fall... but, you know, for the right price I suppose we'd get it now.)

Search this forum (and the Ioniq5 forum) for posts by acadapter who was one of the first, if not the first, to go this route last year. Those detailed posts have great info, and along with what Grayson73 described, they should help you along.

Broadly speaking, you want to get quotes for the selling price of the car without incentives or rebates and tell the dealer that you're planning on leasing. With EV sales slowing down, you should be able to knock off at least $2-3k off MSRP. Since you plan on buying out the lease (but don't tell the dealer this when you're asking for quotes), it doesn't really matter what term length you ask for when asking for quotes. However, you should ask each dealer for the same terms so you can compare apples to apples. Choose something standard like 36 months/10000 miles per year so you can also ask the dealer for the money factor (interest rate) and residual. Technically, the money factor and residual don't really matter much when you buy out the lease immediately, but you'll appear to be a more serious customer to the dealer.

The gross cap cost will normally be the selling price plus the lease acquisition fee of $750, which is set by Genesis and can't be negotiated. The adjusted cap cost will be the gross cap cost minus the 7500 lease rebate and any other rebates that Genesis might be running at the time you lease. Adjusted cap cost is the primary determinant in what you're paying for the car when you buy out the lease. The buyout fee of $300 is set by Genesis Finance so it is standard across all dealers IF they use Genesis Finance as the lender. If they use another bank, you'll have to see what that bank sets for the buyout in the lease contract. The rest of the fees (doc, registration, etc) are the same whether you buy or lease.

 

[ntrainer]

Visited Genesis of Cherry Hill today and took everyone's advice... didn't mention a loan buyout at all. They offered the $7500 Genesis Financing deal, plus $1,000 off MSRP. We played along just to get a look at what documents they would produce for us, to understand the numbers a bit more. I'm still stuck with a few questions:

1) brettb, in your calculations you note that the payoff amount is likely reduced by the "base payment" that you provide at closing ($458.06 in the example we were discussing above). Why is that? I assume you would pay something for the "privilege" of having them float the lease to you for a couple of weeks, and that the full payment doesn't fully represent just a capital cost reduction... I know we're not talking about thousands of dollars, here, but every dollar counts, so I want to understand that number a bit better.

2) If this lease payment might actually represent some amount of interest rather than capital reduction, isn't in our best interest to minimize the lease payment by, say, agreeing to put large amounts of $$ down? I mean, we're buying out this lease immediately, so personally I'd be happy to put down $20K and then pay the remaining, say, $27K in two weeks once the paperwork clears with GF and we pay off the loan, if that minimizes our risk that the paperwork takes longer to clear.

3) I see nowhere on the lease agreement where the buyout fee is listed. We were orally told that if we bought out the lease more than 6 months before its end GF would charge us "something like $500." Could that fee have gone up this year? Any way to know what that fee is?

 

[brettb]

Visited Genesis of Cherry Hill today and took everyone's advice... didn't mention a loan buyout at all. They offered the $7500 Genesis Financing deal, plus $1,000 off MSRP. We played along just to get a look at what documents they would produce for us, to understand the numbers a bit more. I'm still stuck with a few questions:

1) brettb, in your calculations you note that the payoff amount is likely reduced by the "base payment" that you provide at closing ($458.06 in the example we were discussing above). Why is that? I assume you would pay something for the "privilege" of having them float the lease to you for a couple of weeks, and that the full payment doesn't fully represent just a capital cost reduction... I know we're not talking about thousands of dollars, here, but every dollar counts, so I want to understand that number a bit better.

I'm no lease expert and have not done this has have no idea how GFC would compute the payoff amount before the 2nd payment was even due. But it does seem that each monthly payment is allocated across "rental charge" and "depreciation" among other things. I agree that you shouldn't expect full credit of the first month's lease payment towards the payoff amount. The folks who have done this would be in a better position to answer this.

2) If this lease payment might actually represent some amount of interest rather than capital reduction, isn't in our best interest to minimize the lease payment by, say, agreeing to put large amounts of $$ down? I mean, we're buying out this lease immediately, so personally I'd be happy to put down $20K and then pay the remaining, say, $27K in two weeks once the paperwork clears with GF and we pay off the loan, if that minimizes our risk that the paperwork takes longer to clear.

I suppose this is true. If I do decide to "acquire" a GV60, I'm going to aim for a lease with little down because I won't decide whether to buy it out immediately until I've had the car for a bit and develop some confidence that a) I love it enough to keep it more than 3 years and b) it has no obvious up-front issues that might keep it out of service for a significant amount of time or necessitate a buy-back.

 

[ntrainer]

3) I see nowhere on the lease agreement where the buyout fee is listed. We were orally told that if we bought out the lease more than 6 months before its end GF would charge us "something like $500." Could that fee have gone up this year? Any way to know what that fee is?

Sorry for the confusion, everyone. I took another couple of moments and read through the lease agreement with a fine-toothed comb.

Let me be clear about what (I think) I understand: It looks like the buyout fee is disclosed in Section 9 of the lease agreement ("Purchase Option at End of Lease Term"), which specifies a "purchase option fee." Our folks told us that was $300. The relevant lease buyout clause is under Section 23B ("Purchase Option Before Maturity"), which reads, "You have an option to purchase the Vehicle at any time before the Scheduled Maturity Date if you are not in Default, under the terms and conditions in Section 9, except that the Purchase Price will be the Adjusted Lease Balance figured according to.... blah, blah, blah." The $500 charge is not for buying out the lease, it's for early termination, which is something entirely different.

So if I'm understanding correctly, the $7500 GF Rebate that's being passed on to us is only diminished by (a) the $750 acquisition fee to establish the lease, (b) the $300 buyout fee, as described above, and (c) whatever "rental charge" is established within that (hopefully) single monthly payment provided at the lease signing. From the numbers I'm seeing on the sample lease agreement, that "rental charge" is around 22% of the monthly payment.

Do I have that right?

 

[berkeleysquirrel]

Sorry for the confusion, everyone. I took another couple of moments and read through the lease agreement with a fine-toothed comb.

Let me be clear about what (I think) I understand: It looks like the buyout fee is disclosed in Section 9 of the lease agreement ("Purchase Option at End of Lease Term"), which specifies a "purchase option fee." Our folks told us that was $300. The relevant lease buyout clause is under Section 23B ("Purchase Option Before Maturity"), which reads, "You have an option to purchase the Vehicle at any time before the Scheduled Maturity Date if you are not in Default, under the terms and conditions in Section 9, except that the Purchase Price will be the Adjusted Lease Balance figured according to.... blah, blah, blah." The $500 charge is not for buying out the lease, it's for early termination, which is something entirely different.

So if I'm understanding correctly, the $7500 GF Rebate that's being passed on to us is only diminished by (a) the $750 acquisition fee to establish the lease, (b) the $300 buyout fee, as described above, and (c) whatever "rental charge" is established within that (hopefully) single monthly payment provided at the lease signing. From the numbers I'm seeing on the sample lease agreement, that "rental charge" is around 22% of the monthly payment.

Do I have that right?

Yes that's essentially correct. In most leases, the first month's payment is due at signing, and just like if you were to finance, the monthly payment consists of a portion that goes to the principal (which for the lease is the depreciation you're paying to use the car) and a portion that is interest (called rent charge in a lease).

Rent charge is based on the money factor which is akin to the interest rate of the lease. There is a base rate that Genesis Finance will set each month for the money factor and it will change depending on the length of the lease and the number of miles selected for the lease. The dealer can mark up the money factor though, increasing the amount of interest you're paying to pad their profits. However, rent charge is calculated on a daily basis, which is why if you exercise the purchase option early on, you're only paying rent charge on the days where you were still leasing up until the point you buy it (the day that Genesis Finance receives your funds for the payoff). So even if the dealer marked it up a little, you're probably not paying that much more.

Since you paid a little bit of the "principal" at the start of the lease with the first month's payment, that part is deducted from your agreed upon sell price when calculating your payoff quote to buy out the lease.

It's certainly up to you how much additional cash you want to put down towards the cap cost reduction beyond the $7500 EV lease rebate, but in general, most would suggest zero down on leases if possible. With all the paperwork that it'll take to set up the Genesis Finance account, requesting the payoff quote, mailing the funds to Genesis, waiting for them to cash the check, and waiting to get the sales paperwork back from Genesis Finance, it can take close to a month to complete the process (took me about that long). In that month, if you happen to get into an accident and the car is totaled, your insurance will pay Genesis Finance the value of the car at that time and if it's lower than what you owed to pay off the car, the lease should have gap insurance to cover that difference. However, if you put any money down as a cap cost reduction, you will not get that money back since the insurance will only pay them up to the amount required to satisfy the amount needed to buy out the car. Putting zero down does mean you're going to pay a little bit more in rent charge since you're borrowing more money from Genesis Finance for the lease. However, keep in mind you're only going to be paying interest (rent charge) for about a month if you do an immediate buy out, so the trade off to protect yourself from being out a bunch of money is worth it.

 

[Grayson]

This was my pricing breakdown when all was said and done.

 

[ntrainer]

Thanks for the breakdown, Grayson73. In looking at your numbers -- and, to be fair, looking even at the offer I received yesterday at Cherry Hill Genesis, which was sort of an estimated offer -- I am bothered by the liberties that dealerships take with their tax calculations and/or the line they label "License/Title". I know Maryland taxes on vehicle sales are 6%. That should be an easy calculation: (MSRP - discount + doc. fee) * 0.06. But they seem to have tacked some amount onto that. This was true of the estimate I was given at Cherry Hill as well. And the line "License/Title" never seems to reflect what I can see are the actual charges that the DMV will require. There's padding in there.

Look, I get it: Car dealers need to make a living. But why in the world can't they be honest about where they're doing that instead of telling us, "No, no, those are required taxes and/or fees for your state." Bugs me. Guess I'm just ranting, here. Anybody have luck with challenging those numbers, though?

 

[gvjim]

Update - last week I got the finance paperwork from GFC. That included the information needed to create an account on their online portal. There was a button on the home page called Generate Buyout Quote (or something similar), I clicked that and it almost immediately spit out a quote with the number right where I expected it, along with information about where to send the payment. It was so easy I thought I must be missing something, so I actually called them to verify. Yep, it's all good, so the next day I sent the check (just a personal check, not certified). I also included the Odometer Disclosure Statement that was included in the buyout quote, a simple form that took about a minute to fill out.

This morning I received an email saying that they received the check but claiming that I failed to submit the Odometer paperwork. WTF? No worries, though, it can be done online. This afternoon I got a text from my bank asking to confirm that I really meant to write such a big check, glad they are on the ball. So I think all that's left is to get a copy of the title in the mail. I also got the recall taken care of today so I am feeling pretty productive

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[ntrainer]

Just wanted to upate this group... looks like literally as of today, April 11, Genesis has extended its $7,500 incentive for the GV60 as "Genesis Retail Bonus Cash" to all-cash buyers, and I believe those who are financing are also eligible to receive $7,500 off. One by one, I can see this being reflected in most dealers' websites. So the need for a lease buyout may be at an end. Still, I really appreciate the advice and expertise of this group; I now understand how this would work in case (by the time we "need" to buy) there's some need to play the lease game!

 

[berkeleysquirrel]

Interesting to note that in addition to just applying $7500 as retail bonus cash, there is also a 13 month lease term now for both the GV60 and the electrified GV70. Must be starting to get desperate to clear inventory

 

[noremacnova]

My local Northern Virginia dealer is showing the $7500 cash buyer credit already. This is obviously a great deal on a 2024 model, but a couple of observations:

1. The newest date of manufacture (DOM) on their lot is Sep 2023, with several cars going to back June 2023. I got it that the farm-to-table time is probably 2 months, but it makes you wonder if Genesis is actually producing many (any?) 2024 models at this time, or even within the last several months.

2. Though getting $7500 off MSRP on a 2024 is a good thing, that amount pales in comparison to the depreciation that the 2024 models will take when the 2025's are announced and available. (I'm presuming that the 2025 GV60's will have many of the upgrades already announced for the 2025 Ioniq 5 (bigger battery, wireless AA/CP, improved charging issues, etc - see other posts)).

 

[Mcc]

the depreciation that the 2024 models will take when the 2025's are announced and available.

But you can say that in every year about the next year. And wait forever.

 

[Grayson]

My local Northern Virginia dealer is showing the $7500 cash buyer credit already. This is obviously a great deal on a 2024 model, but a couple of observations:

1. The newest date of manufacture (DOM) on their lot is Sep 2023, with several cars going to back June 2023. I got it that the farm-to-table time is probably 2 months, but it makes you wonder if Genesis is actually producing many (any?) 2024 models at this time, or even within the last several months.

2. Though getting $7500 off MSRP on a 2024 is a good thing, that amount pales in comparison to the depreciation that the 2024 models will take when the 2025's are announced and available. (I'm presuming that the 2025 GV60's will have many of the upgrades already announced for the 2025 Ioniq 5 (bigger battery, wireless AA/CP, improved charging issues, etc - see other posts)).

The depreciation also pales in comparison to used CPO GV60s. Buy those instead!

 

[gvjim]

I guess it doesn't matter any more, but I received the title for my car in the mail. So my lease buyout is now complete except I guess I have to submit a form to the DMV. I wonder if AAA can take care of that for me? Anyway, the entire lease/buyout process was pretty simple, but not quite as simple as it apparently is now. Looking forward to seeing more GV60s on the road!