What is the moneyfactor / interest rate for a single pay lease plan?

[bugaboo90]

Does anyone know what a single pay lease money factor/interest rate is?

 

[MurlinatoR]

Does anyone know what a single pay lease money factor/interest rate is?

Yeppers! LOL

A single pay lease is .0004 (about 1%) less than the standard money factor.

Sent from my SM-G930R4 using Tapatalk

 

[MarkyMark]

The lingo is that of Politicians.

Senator: "We haven't raised the budget this year!"

Question: Senator All of Them, what is baseline budgeting then? Isn't that an auto-spending increase pumped into the budget each and every year of 7%? Isn't that raising spending 7%?"

Senator take your pick: "No, no. That's called baseline budgeting. It's built into each budgetary year. I have personally never raised spending, nor have my political colleagues. We don't ever consider that an increase in spending, it's called baseline budgeting. Now get it right!"

Ha!

That preamble said, I believe the "Single Payer Lease" of .0004% is also called the "Reserve" which is what the dealer can put on top of the Kia Motors Financial Money Factory rate, and that is money the dealer gets ta keep. In other words, it could also be called "Dealer Profit." It isn't huge, it might be $225 - $250 for the dealer, but if you know your Money Factor is .00196, yet you see it and it's .00200, they've added that in.

Is this about right MurlinatoR? You are a straight shooter, so just want to make sure I'm giving out correct information, but that is my understanding.

 

[MurlinatoR]

The lingo is that of Politicians.

Senator: "We haven't raised the budget this year!"

Question: Senator All of Them, what is baseline budgeting then? Isn't that an auto-spending increase pumped into the budget each and every year of 7%? Isn't that raising spending 7%?"

Senator take your pick: "No, no. That's called baseline budgeting. It's built into each budgetary year. I have personally never raised spending, nor have my political colleagues. We don't ever consider that an increase in spending, it's called baseline budgeting. Now get it right!"

Ha!

That preamble said, I believe the "Single Payer Lease" of .0004% is also called the "Reserve" which is what the dealer can put on top of the Kia Motors Financial Money Factory rate, and that is money the dealer gets ta keep. In other words, it could also be called "Dealer Profit." It isn't huge, it might be $225 - $250 for the dealer, but if you know your Money Factor is .00196, yet you see it and it's .00200, they've added that in.

Is this about right MurlinatoR? You are a straight shooter, so just want to make sure I'm giving out correct information, but that is my understanding.

Pretty close [MENTION=477]MarkyMark[/MENTION].

The only slight adjustment is that the whole scale slides down .0004 with a single pay.

Sent from my SM-G930R4 using Tapatalk

 

[MarkyMark]

Pretty close [MENTION=477]MarkyMark[/MENTION].

The only slight adjustment is that the whole scale slides down .0004 with a single pay.

Sent from my SM-G930R4 using Tapatalk

So it moves from, say, .00196 to .00192? Thus the baseline of .00196 Money Factor HAS the dealer $225-$250 already baked in, and the dealer can move DOWN if need be? If that's on target, I find that interesting. If the dealer does do this, it appears they make a flat $150 from KMF instead of the %, yes?

And doing so, the term is called "Single Pay Money Factor" because?... Because it's singularly paying just KMF and not dual, because the dealer is not getting paid from it any longer, and is rather just taking the flat fee of $150.

Am I on the right track?

 

[MarkyMark]

Here's a question for you MurlinatoR: Does the dealer still get the holdback money on a lease? I assume it's based on the Adj. Capital Cost if so?...

 

[MurlinatoR]

So it moves from, say, .00196 to .00192? Thus the baseline of .00196 Money Factor HAS the dealer $225-$250 already baked in, and the dealer can move DOWN if need be? If that's on target, I find that interesting. If the dealer does do this, it appears they make a flat $150 from KMF instead of the %, yes?

And doing so, the term is called "Single Pay Money Factor" because?... Because it's singularly paying just KMF and not dual, because the dealer is not getting paid from it any longer, and is rather just taking the flat fee of $150.

Am I on the right track?

Effectively, yes. If the money factor is set at .00196 from the factory, then the dealer can mark it up .ooo4 to .00236. If it's a Single Pay lease, then the set factory drops .0004 to .00156 and the dealer can mark it up to .00196.

 

[MurlinatoR]

Here's a question for you MurlinatoR: Does the dealer still get the holdback money on a lease? I assume it's based on the Adj. Capital Cost if so?...

Yes. Anytime the dealer sells the vehicle, they receive that money. It never changes and is non negotiable because the dealer pay rent (floorplan) to the factory for "having" the inventory between the time its received by the dealer and the time the dealer sells the vehicle.

 

[mldavis2]

Back in the day when I worked for a dealership (late '80's) the floor plan interest did not begin until 90 days after receipt of the vehicle. Cars remaining on the lot after 90 days began to accrue interest from the factory but not before.

 

[MarkyMark]

Effectively, yes. If the money factor is set at .00196 from the factory, then the dealer can mark it up .ooo4 to .00236. If it's a Single Pay lease, then the set factory drops .0004 to .00156 and the dealer can mark it up to .00196.

So what constitutes/triggers a "Single Pay Lease" as opposed to a "lease?"...

 

[MurlinatoR]

So what constitutes/triggers a "Single Pay Lease" as opposed to a "lease?"...

You pay all 36 payments at the time of contract instead of in monthly installments.

 

[MarkyMark]

You pay all 36 payments at the time of contract instead of in monthly installments.

Ah, this is what I feared. ; ) I'm "Mr. Buyout" guy so there you go... won't work for me. That said, when a lease contract is signed, dealers often try to throw in a bigger "first month down" payment, but that's just throwing in whatever they are trying to throw into the first month, yes? Nothing from KMF requires a bigger first month payment, correct?

Secondly, I do NOT need to pay the first month payment right then and there at the dealer, correct? Rather, I can have KFM just bill me like any other bill, correct?

 

[MurlinatoR]

Ah, this is what I feared. ; ) I'm "Mr. Buyout" guy so there you go... won't work for me. That said, when a lease contract is signed, dealers often try to throw in a bigger "first month down" payment, but that's just throwing in whatever they are trying to throw into the first month, yes? Nothing from KMF requires a bigger first month payment, correct?

Secondly, I do NOT need to pay the first month payment right then and there at the dealer, correct? Rather, I can have KFM just bill me like any other bill, correct?

For the single pay, I've said in other threads that if anyone is planning on buying it out right away to save extra money NOT to do the single pay. Dealers include down payments into the lease because it's a quick way to make the payments smaller for the customer. The only thing required is the first payment.

That said, you don't even have to pay the first payment if you don't want to. If you choose not to, that WHOLE payment is chopped up into 35 pieces and added to the rest of your payments throughout the lease.

 

[MarkyMark]

For the single pay, I've said in other threads that if anyone is planning on buying it out right away to save extra money NOT to do the single pay. Dealers include down payments into the lease because it's a quick way to make the payments smaller for the customer. The only thing required is the first payment.

That said, you don't even have to pay the first payment if you don't want to. If you choose not to, that WHOLE payment is chopped up into 35 pieces and added to the rest of your payments throughout the lease.

Well, I'm going to go with the Lease, immediately buyout the Stinger. Not sure if there is an advantage to paying the first month, or just having it chopped into the other 35 payments as you say, if in 4 days I'm calling KMF and buying it out?...

Pros or Cons to not paying it if I'm buying out?

 

[MarkyMark]

[MENTION=291]MurlinatoR[/MENTION] - Inside the beltway question, but what is Kia's current monthly MSO program looking like? $30k or higher now-a-days or? Kia is desperately seeking 5% of the market, but they are doing so by squeezing blood from a turnip, all too often. I understand there may be a 70% target and a 120% MSO program to add some flexibility to the program instead of all or nothing.

I mean, if you guys decide a particular month or two is a great month to "go for it" and you start giving away cars, and then miss it by one car - whoops. But if the program is tiered, it gives some grace to not always getting there...

 

[MurlinatoR]

[MENTION=291]MurlinatoR[/MENTION] - Inside the beltway question, but what is Kia's current monthly MSO program looking like? $30k or higher now-a-days or? Kia is desperately seeking 5% of the market, but they are doing so by squeezing blood from a turnip, all too often. I understand there may be a 70% target and a 120% MSO program to add some flexibility to the program instead of all or nothing.

I mean, if you guys decide a particular month or two is a great month to "go for it" and you start giving away cars, and then miss it by one car - whoops. But if the program is tiered, it gives some grace to not always getting there...

The manufacturers change those programs about once a year. LOL It's never the same. The current program has no low end anymore. They don't want dealers under performing. So, when you hit your objective, they give a little bit. If you surpass your objective and improve on your numbers then they give a little more.

The reality is simply this; if you over price your cars, you don't sell your cars. Small dealers stay small for a reason and it's because they're not focused on the customer, they're focused on the profit. No one wins the baseball game by trying to hit a home run every time someone's at bat.

 

[ralzod]

Well, I'm going to go with the Lease, immediately buyout the Stinger. Not sure if there is an advantage to paying the first month, or just having it chopped into the other 35 payments as you say, if in 4 days I'm calling KMF and buying it out?...

Pros or Cons to not paying it if I'm buying out?

Isn't the majority of the first payment just interest? If so, it would be throw-away money, unless they retroactively pro-rate the interest when the buyout quote is calculated.

 

[mldavis2]

The reality is simply this; if you over price your cars, you don't sell your cars. Small dealers stay small for a reason and it's because they're not focused on the customer, they're focused on the profit. No one wins the baseball game by trying to hit a home run every time someone's at bat.

Well, I don't sell cars for a living, but in my part of the world, it is the smaller rural dealer that treats customers fairly. Larger dealerships are typically high pressure, dog-eat-dog competition for the next sale, get that sale before they get away atmosphere. I've been ambushed at the door by the next salesman whose "up" it is and they aren't about to waste that "up" to go to the back of the line. I also get better prices from smaller dealers with lower overhead than the big lots with huge inventories to maintain and fancy showrooms according to the bids I get when I'm shopping. I guess it's different where you work....JMHO and experience. And I have a bit of insight having worked as a service manager back in the '80's.

 

[MarkyMark]

Isn't the majority of the first payment just interest? If so, it would be throw-away money, unless they retroactively pro-rate the interest when the buyout quote is calculated.

I can have them bill me. You do NOT need to make any first payment at the dealer. Often they want to pack a big first payment in with fees, etc... I'm paying all license and title, taxes, up-front, so it'll be the car only in the lease, nice and clean. In about 4 days after signing (I call KMF - Kia Motors Finance) and let them know I'm buying it out.

As for the interest, it is compounded, monthly. So a few days will have started, but maybe $15 - $25 something like that. Peanuts. The rest is the stream of payments and the Residual price and $300 buyout fee.

I'll be getting a GT w/Drive Wise package (hard to find right now! Too many AWD versions out there). That said, this model currently has $4,800 lease cash, and I can capture a big chunk of that by going immediate buyout.

 

[mldavis2]

I've looked at doing that, [MENTION=477]MarkyMark[/MENTION]. Unfortunately my car isn't due until the first week of March, so who knows what the options will be after Feb. 28. The more I think about it, IF the 0.9% interest rate remains in effect, I think I can come out ahead by leaving the $40,000 invested, earning well over 0.9% (assuming no total market crash) plus I won't pay taxes on a lump sum withdrawal and incur the capital gains tax. I think I can earn more than I would gain from the rebate and one-pay lease buyout.