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[BigTree]

This is 100% accurate. Owning a car more than four years has nothing to do with lease vs buy.

Agree with everything in last few posts except the “...nothing to do with..”. Leasing is certainly the cheapest way to drive a nice car for 3-4 years for all the reasons mentioned. And if you love the car you MAY have attractive options to buy at the end, but you might not. I’ve bought a couple of cars off the lease when dealer/lease company was willing to deal below the RV. But have also had them refuse so there is uncertainty.

Most/many leases these days seem to have RV and MF subvented by the factory so it’s likely the lease end RV will be higher than actual value. If the leasing company won’t “deal” and/or if market conditions are different (lending rates etc) then you’ve got a problem.

Again if you “know” you’re keeping your car. >4 years then buying (at very low APR these days) locks you in at today’s terms rather than risk vastly different markets in 3-4 years. In 3 years lease terms might be much less attractive and then what? I always lease for all the reasons mentioned in the thread but doesn’t mean it’s right for everyone, especially if you drive way more than 15k miles/ year.

 

[EdP]

If you are worried about miles buy it out at the end. Non issue. There is no termination fee either ($400 on these cars ) when you buy them out.

If you walk away there is a termination fee. If you are considering another lease or a new buy, the dealer may negotiate that away. Of course, you won't know for sure until you are ready for a new car. The dealer wants to move another piece so you do have some negotiating power.

 

[Mcc]

If you walk away there is a termination fee. If you are considering another lease or a new buy, the dealer may negotiate that away. Of course, you won't know for sure until you are ready for a new car. The dealer wants to move another piece so you do have some negotiating power.

But why even worry about the termination fee when it is so much less than the lease cash incentive? It’s insignificant but if you keep mentioning it people are going to worry about it being a significant consideration.

 

[WWIAFTM]

Do we know from the past whether Genesis does model year end deals or discounts. Like how Lexus has their Christmas time "sales event" every year?

Sorry to clutter the thread but I was curious if anyone had any further info on this?

 

[pulsar]

If you keep your cars over 4 years then leasing is not for you. If you like to get new cars every 2-4 years then take a hard look at leasing because the leasing company is taking the residual value risk rather than you worrying about selling your car for enough money to cover your remaining loan. The lease payment is lowere because you’re only paying rent for 3 years, basically the difference between the sales price and the residual value when the lease expires.

For example, my ‘15 Genesis Ultimate lease ending now has a residual value of about $28k but you can buy a used low miles ‘15 for about $23k I think. Hyundai Finance propped up the RV and offered a near zero money factor in order to clear out the inventory in early ‘16. Result is I had a $400 payment on a car that stickered at $51k! Wish I could do that deal again!

You guys have given me something to think about for lease vs buy. I average about 7k miles per year so should not go over allowed mileage. I’m anal with my cars and keep them like new. I’m the guy when you go to Home Depot you see parked in BFE, I dont like people parking by me for door dings really piss me off. I have a 13 year old convertible with 40k miles and no dings and looks like a 1 year old car. I’m waiting for 2020 models to hit, so later in the year who knows what kind of deals may be had? When you lease, isn’t the RV predetermined so if I do wish to purchase later you know the price already? My Infiniti got totaled as did my Harley so have cash in the bank at the moment for purchase. Wife made me give up cycling for I did good to survive my incident so no more two wheels for me. Had over 100k accident free miles before being hit so can’t really complain.

 

[Gene70]

i paid 45.5K$ for base rwd 3.3t 2019 and my dealer call it prestige xD

ask me what features i don't have (some of you wont even know that it can come out the factory without)
if anyone is intersted i have excel sheet from my dealer that i can share if you want a quick laugh (has all packages and features)

 

[KusaKusa]

i paid 45.5K$ for base rwd 3.3t 2019 and my dealer call it prestige xD

ask me what features i don't have (some of you wont even know that it can come out the factory without)
if anyone is intersted i have excel sheet from my dealer that i can share if you want a quick laugh (has all packages and features)

Does it have the adaptive suspension setting in the custom drive mode? If so, then yeah you got the top Sport trim.

And as for leasing vs. buying, if you have the money to buy outright then starting with a lease into buying out the car is better because of the lease cash. But if you need to finance the lease buyout, then you may get a better rate just financing from the start. You'll pay a low money factor for the lease, but financing the lease buyout after the lease ends may have a high interest rate depending on where you go. So financing from the start with Genesis' 1.9-2.9% financing may be better.

 

[Gene70]

Nope i so

Does it have the adaptive suspension setting in the custom drive mode? If so, then yeah you got the top Sport trim.

And as for leasing vs. buying, if you have the money to buy outright then starting with a lease into buying out the car is better because of the lease cash. But if you need to finance the lease buyout, then you may get a better rate just financing from the start. You'll pay a low money factor for the lease, but financing the lease buyout after the lease ends may have a high interest rate depending on where you go. So financing from the start with Genesis' 1.9-2.9% financing may be better.

nope i dont have that
what i meant im lacking alot of features

 

[TurtleBoy]

When you lease, isn’t the RV predetermined so if I do wish to purchase later you know the price already?

That is correct, the residual value is determined as a percentage of MSRP when you sign the lease and it doesn’t change. In rare cases you may be able to negotiate a discount at lease end but they generally stick to that figure since it is in your contract.

 

[Tonester]

I think more calculations need to be done to make sure it is worth taking the lease cash. I should have put it in my previous post but since the purchase price of the car through a lease would be the residual and that is based on MSRP, you will effectively be losing a good portion of your discount by leasing and then buying. In situations where little discount from MSRP can be had that wouldn’t be a problem but with big discounts it may wipe out the lease cash advantage.

@TurtleBoy I'd be very interested in the calculations you're referring to here. Admittedly I'm a newb with leasing (never leased before), but I thought the lease payment was calculated as money borrowed to pay for the difference between the sale price (MSRP - incentives - other) and the RV. Add finance charges (MF) to that number, then divide by the lease term (36 typical) and you have the monthly lease payment; is that right? I'm not seeing how the RV being calculated from MSRP has anything to do with "losing a good portion of your discount". Can you please elaborate here?

Also, it would be good to know if the lease termination (disposition) fee applies if you buy the car at the end. To me, it would only make sense for them to charge this fee if you turn the car in as there would be obvious costs to the dealer to prep and sell the car. I just don't see why they could charge a disposition fee if you end up buying the car. Yeah, it is a small amount compared to the lease cash, but still would be good to know in advance if it applies. thanx!

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[nellie1289]

@TurtleBoy I'd be very interested in the calculations you're referring to here. Admittedly I'm a newb with leasing (never leased before), but I thought the lease payment was calculated as money borrowed to pay for the difference between the sale price (MSRP - incentives - other) and the RV. Add finance charges (MF) to that number, then divide by the lease term (36 typical) and you have the monthly lease payment; is that right? I'm not seeing how the RV being calculated from MSRP has anything to do with "losing a good portion of your discount". Can you please elaborate here?

Also, it would be good to know if the lease termination (disposition) fee applies if you buy the car at the end. To me, it would only make sense for them to charge this fee if you turn the car in as there would be obvious costs to the dealer to prep and sell the car. I just don't see why they could charge a disposition fee if you end up buying the car. Yeah, it is a small amount compared to the lease cash, but still would be good to know in advance if it applies. thanx!

you are correct. You take msrp - incentives - and cap cost paydown cash down -dealer discount (if any ) + 750 lease inception fee. This is your cap cost. Then you pay the cap cost down to residual value (msrp x residual percentage ) + interest costs and this is your monthly payment. A lease amortizes just like a loan at this point. In three years you have the choose to buy the car or turn it in plus your disposition fee of $400. If you buy the car out of lease of end or at any time during the lease you do not have to pay the 400$.

 

[nellie1289]

Most/many leases these days seem to have RV and MF subvented by the factory so it’s likely the lease end RV will be higher than actual value. If the leasing company won’t “deal” and/or if market conditions are different (lending rates etc) then you’ve got a problem.

This is literally the best reason to lease, a high residual value. This just happened on the 2016 genesis ultimate I turned in. Residual was 29k and fmv is 25k. Have fun with your car Hyundai . You want your residual value as high as possible. Less risk on you. A perfect lease is when at the end the lessor not you is way upside down. You have paid less to borrow their car for three years. Far less. Toss them the keys or negotiate a lower price and make an offer. The lessor set residuals lower these days to insulate themselves from a wave of upside down cars coming back to them. I once had a five year lease on a suburban with a residual of 58% in the 2005 timeframe. Who was laughing in 2010 when it was upside down 14k. Me. Thanks for letting me depreciate your car for you.

 

[Mcc]

I just don't see why they could charge a disposition fee if you end up buying the car. Yeah, it is a small amount compared to the lease cash, but still would be good to know in advance if it applies. thanx!

If you want a definitive answer, it would be best to call Genesis finance and ask them yourself.

 

[Tonester]

If you want a definitive answer, it would be best to call Genesis finance and ask them yourself.

Of course I could always do that if nobody knows the answer. Lots of smart and experienced people here, so I thought I'd ask here first since I don't really know who to call and I figured others might be interested as well. Nellie seems very sure the fee is not imposed if the car is not turned in, thanks @nellie1289 .

Many people ask questions here when they could also get on the phone and ask Genesis. I see nothing wrong with them asking here.

 

[Mcc]

Of course I could always do that if nobody knows the answer. Lots of smart and experienced people here, so I thought I'd ask here first since I don't really know who to call and I figured others might be interested as well. Nellie seems very sure the fee is not imposed if the car is not turned in, thanks @nellie1289 .

Many people ask questions here when they could also get on the phone and ask Genesis. I see nothing wrong with them asking here.

No problem with anyone asking questions but the only answer you can count on 100% is the one from Genesis and even then I would suggest getting it in writing. There are plenty of very good and correct answers here but there are also ones where the poster has been mistaken. So who are you going to believe if it is so important to you?

 

[nellie1289]

I have bought two cars out of leases from Hyundai motor finance which also does genesis financing including the 2019 g70 I just got. There is no fee if you buy it out.

 

[TurtleBoy]

@TurtleBoy I'd be very interested in the calculations you're referring to here. Admittedly I'm a newb with leasing (never leased before), but I thought the lease payment was calculated as money borrowed to pay for the difference between the sale price (MSRP - incentives - other) and the RV. Add finance charges (MF) to that number, then divide by the lease term (36 typical) and you have the monthly lease payment; is that right? I'm not seeing how the RV being calculated from MSRP has anything to do with "losing a good portion of your discount". Can you please elaborate here?

I'm so sorry, I think my brain took the weekend off. We had our 3 year old grandson for three days and perhaps playing with him my brain reverted to that stage. LOL I was not thinking correctly about the buyout amount.

Your formula for the interest on a lease is not correct though. The MF is not just applied to that difference, that is why it is not accurate to compare the interest rate arrived from multiplying the MF x 2400 with the interest rate for purchasing for the comparable amount. In a lease you also pay interest interest (many call it a rent charge) on the residual amount. The formula for finding the monthly interest payment is to take your adjusted cap cost and add the residual value to it. Multiply the money factor to that sum to get the amount. To be completely accurate you should add the acquisition fee into the total to get the effective interest rate over the life of the lease. In the large majority of circumstances, the effective interest rate on a lease will be higher than what the current interest rate on a loan will be.

Here is an example of the effective interest rate that you are paying on a lease. To keep things simple there are no taxes or fees except the $750 acquisition which we will include on the lease amount rather than paying separately.

MSRP: 50,000
Discount: 4,000
Lease Cash: 3,000
MF: .0007
RV: 51%

Adjusted Cap Cost: 43,750 (MSRP - Discount - Lease Cash + Acq Fee)
Residual Amount: 25,500. (MSRP * RV)
Depreciation Amount: 18,250
Payment without interest: 506.94 (18,250 / 36)
Monthly Interest: 48.48 ((43,750 + 25,500) * .0007)
Total interest paid: 1,745.28

So for "borrowing" the 18,250 for 3 years, a total of 1,745.28 was paid in interest. That would equate to an interest rate of about 6.025% which is quite a bit higher than the 1.9% being offered. This is not meant to compare payments between a lease and a loan, just the interest on the same amount.

 

[nellie1289]

I'm so sorry, I think my brain took the weekend off. We had our 3 year old grandson for three days and perhaps playing with him my brain reverted to that stage. LOL I was not thinking correctly about the buyout amount.

Your formula for the interest on a lease is not correct though. The MF is not just applied to that difference, that is why it is not accurate to compare the interest rate arrived from multiplying the MF x 2400 with the interest rate for purchasing for the comparable amount. In a lease you also pay interest interest (many call it a rent charge) on the residual amount. The formula for finding the monthly interest payment is to take your adjusted cap cost and add the residual value to it. Multiply the money factor to that sum to get the amount. To be completely accurate you should add the acquisition fee into the total to get the effective interest rate over the life of the lease. In the large majority of circumstances, the effective interest rate on a lease will be higher than what the current interest rate on a loan will be.

Here is an example of the effective interest rate that you are paying on a lease. To keep things simple there are no taxes or fees except the $750 acquisition which we will include on the lease amount rather than paying separately.

MSRP: 50,000
Discount: 4,000
Lease Cash: 3,000
MF: .0007
RV: 51%

Adjusted Cap Cost: 43,750 (MSRP - Discount - Lease Cash + Acq Fee)
Residual Amount: 25,500. (MSRP * RV)
Depreciation Amount: 18,250
Payment without interest: 506.94 (18,250 / 36)
Monthly Interest: 48.48 ((43,750 + 25,500) * .0007)
Total interest paid: 1,745.28

So for "borrowing" the 18,250 for 3 years, a total of 1,745.28 was paid in interest. That would equate to an interest rate of about 6.025% which is quite a bit higher than the 1.9% being offered. This is not meant to compare payments between a lease and a loan, just the interest on the same amount.

You aren’t borrowing 18,250 you are borrowing 43,750. Your rate recalc is not accurate. Nobody lets you walk off with 43,750 asset without paying interest on full amount. Your interest rate is simply money factor x 2400. Your lease (loan) will amortize down from 43,750 to 25,500 at that rate. Just like any other loan you borrow money against. I am a CPA I have recalculated every lease I have ever had down to residual using my loan amortization software and I guarantee you the interest rate you pay on a lease is 2400 x the money factor amortized down from the amount you borrow the cap cost. This cap cost is how much you are borrowing !!!

 

[TurtleBoy]

You aren’t borrowing 18,250 you are borrowing 43,750. Your rate recalc is not accurate. Nobody lets you walk off with 43,750 asset without paying interest on full amount. Your interest rate is simply money factor x 2400. Your lease (loan) will amortize down from 43,750 to 25,500 at that rate. Just like any other loan you borrow money against. I am a CPA I have recalled every lease I have ever had tongge residual using my loan amortization software and I guarantee you the interest rate you pay on a lease is 2400 x the money factor amortized down from the amount you borrow the cap cost. This cap cost is how much you are borrowing !!!

You are not correct, the numbers I posted are accurate. You are missing a very important point, we are talking about effective rates which would be the amount of interest paid on what was "borrowed". You "borrowed" the 18,250 since at the end of the lease if you wanted to buy it out you would have to pay the RV.

 

[nellie1289]

You are not correct, the numbers I posted are accurate. You are missing a very important point, we are talking about effective rates which would be the amount of interest paid on what was "borrowed". You "borrowed" the 18,250 since at the end of the lease if you wanted to buy it out you would have to pay the RV.

Wrong. You borrow $43750 when you walk off with a car.. Happy to post a loan amortization file proving this. You are walking off with a 43750 asset. Not a 18250 asset. Leases amortize just like a loan. You will owe less on the car (residual) on a lease at amortizing at 1.68%(.0007x2400) than a purchase amortizing at 1.90%(genesis current loan rate) on 43750 at every point throughout the lease and at the end of 36 months. This is a mathematical finance fact.

On edit. Your payment would be higher on a 72 month purchase at 1.9% I assume you would make the same payment on a purchase the first 36 months as the lease. Which would obviously never be the case. But is for illustrative purposes