[neo76]

I really like and want a KIA EV6.
I cannot believe that KIA will not offer any good lease deals on the EV6.
The Mach-E, Polestar 2, Q4 e-tron (based on what they currently offer the e-tron) and even BMW (i4) are offered with much better lease deals.
I consider all these cars direct competitors to the EV6.

I really don't want to make a decision like this just because KIA doesn't want to get its act together.
Very disappointing.

It is almost ridiculous to spend $1,000 / month on a car when similar cars can be leased for half that price.

 

[rconkling]

Manufacturers utilize leases to move product.

There is no need to incentivize leases when they are selling well.

Give it time young grasshopper, the deals will come.

 

[Cnsheets]

And maybe then they'll include passing the federal rebate on in the lease as well. Which they wont do right now.

 

[Ken Chalk]

Manufacturers utilize leases to move product.

There is no need to incentivize leases when they are selling well.

Give it time young grasshopper, the deals will come.

Automakers turn more profit off a lease then selling a car outright. Leasing also creates repeat business.

 

[rconkling]

Automakers turn more profit off a lease then selling a car outright. Leasing also creates repeat business.

Sure, when they pocket federal rebates. But they also take on liability and can lose a ton. Reference my brother-in-laws bolt lease he turned in. Residual value was right at $20k but the actual value was $14k so he dropped off the keys and walked away. Similar to my friends leaf, nissan offered $7k in buyout assistance because the residual value was so much higher. He still walked away.

Leasing is a tool to move vehicles that are harder to sell, ie luxury vehicles.

Leasing can make sense and be a better deal than a purchase, like my leaf lease, but it depends on many factors. Some vehicles lease well others not so much.

 

[Ken Chalk]

Sure, when they pocket federal rebates. But they also take on liability and can lose a ton. Reference my brother-in-laws bolt lease he turned in. Residual value was right at $20k but the actual value was $14k so he dropped off the keys and walked away. Similar to my friends leaf, nissan offered $7k in buyout assistance because the residual value was so much higher. He still walked away.

Leasing is a tool to move vehicles that are harder to sell, ie luxury vehicles.

Leasing can make sense and be a better deal than a purchase, like my leaf lease, but it depends on many factors. Some vehicles lease well others not so much.

I grew up around the auto industry -my family owned a chain of GM dealers in New England.

True. Auto manufacturers sometimes get the residual calculation wrong; this is extremely rare. Even in this case, they often still make money. Here's how.

The Automaker's leasing arm often markups the interest rate (the money factor). Leas agreements present a the money factor as a fraction. Example, .00375.

While .00375 may seem low, in reality it equates to a 9% interest rate. so the manufacturer is making upwards of 6% interest on the backend through their financing arm.

Another way manufacturers make money through leasing is by manipulating the car's capital cost. Often, the capital cost you pay and the resale of the leased car add up to 5% to 7% over the MSRP. Add in the money factor, and you are 10% to 18% above the original MSRP.

The bottom line here is, the auto industry rarely gets it wrong. General Motors reported a profit of $2.4 billion on the sale of new cars. GM Financial reported a profit of 2.7 billion.

 

[Ken Chalk]

@rconkling I grew up around the auto industry -my family owned a chain of GM dealers in New England.

True. Auto manufacturers sometimes get the residual calculation wrong; this is extremely rare. Even in this case, they often still make money. Here's how.

The Automaker's leasing arm often markups the interest rate (the money factor). Lease agreements present the money factor as a fraction. Example, .00375.

While .00375 may seem low, in reality it equates to a 9% interest rate. So the manufacturer in this case is making upwards of 6% interest on the backend through their financing arm. Consumers rarely ask about the interest rate associated with their lease.

Another way manufacturers make money through leasing is by manipulating the car's capital cost. Often, the capital cost you pay and the resale of the leased car add up to 5% to 7% over the MSRP. Add in the money factor, and you are 10% to 18% above the original MSRP.

The bottom line here is, the auto industry rarely gets it wrong. General Motors reported a profit of $2.4 billion on the sale of new cars. GM Financial reported a profit of 2.7 billion.