I recently leased a 2024 GTL. The residual value is hard for car companies to predict when you sign a lease, especially with the way the US EV market is fluctuating. I’m curious if anyone who had early EV6 leases found their car’s residual value was too high by several thousand and if Kia Finance made lower buyout offers once the lease ended. I’ve heard that some companies are willing to make lower offers if they know they’ll end up losing money anyway. Any insights would be appreciated.
Usually, captive finance companies don’t offer buyouts lower than the residual value for a few reasons.
Their main job is to sell new cars. They don’t want you to buy your lease car. People who lease tend to keep leasing, usually with the same brand.
They handle a large number of leases each year. The process is mostly automated. If they started negotiating buyouts, it would complicate things.
Also, they’re not hugely concerned about losing money on leases. These finance companies exist to help the manufacturer sell cars, not to make profits. Losses on leases are often offset by profits from new car sales. They look at losses and gains across a whole line of cars, not just individual ones.
That said, things might change when you turn the car in. You might also be able to negotiate with the dealer after you return it, assuming they’re allowed to sell the car and don’t send it straight to auction.
@Ollie
I get what you’re saying, and I generally agree. But I’ve seen people on EV lease forums (though not for EV6s) getting buyout offers several thousand lower than their residual from the captive finance company. Unlike ICE cars, which have more predictable residuals, there’s less reason for them to absorb a $10k difference on EVs. This doesn’t seem to happen with ICE leases, where they’re more likely to get maximum value from the original lessee.
I’m guessing buybacks on EV leases will be a bit unpredictable for a while. I’m just wondering if anyone here has turned in an EV6 lease yet and what the numbers looked like.
@Wylie
That’s why I say ‘for the most part.’ I know BMW did make some buyout offers below residual during Covid for specific models, but that was due to production shortages, not to cover losses.
They’ve dealt with these situations before. After 2008, when gas prices hit $4 per gallon, trucks and big SUVs lost value quickly, and manufacturers took big losses on those leases. They prepare for these things.
If Kia loses $10k on an EV6 lease return, it’s not a huge concern. They’re selling way fewer EV6s compared to other models. While they may lose $100 million on the EV6, that could be offset by strong sales on models like the Telluride, which is doing really well.
I think used EV prices will keep dropping, and there’s a chance that in 3 years, a $60k EV6 might be worth less than $20k. Kia might also make changes to how leases are handled, and it might be possible to negotiate a buyout. But I wouldn’t count on it being easy to negotiate.
@Ollie
In 2016, Nissan dropped my buyout price by about $5k on a LEAF. I remember seeing similar offers on forums back then.
@Ollie
I’m not sure I understand where the difference between the residual and the actual used car price goes. For example, my 2024 Wind has a residual of about $41k, but when I search for used EV6 Winds from the past 2 years, I see them listed for around $30k in my state (Maryland). Does Kia just take a hit on that $10k difference?
@Dakota
That’s a good question, and I’m curious too. My 2024 GTL AWD lease has a residual of $33,350. I wonder why the Wind’s residual is higher than mine.
Ira said:
@Dakota
That’s a good question, and I’m curious too. My 2024 GTL AWD lease has a residual of $33,350. I wonder why the Wind’s residual is higher than mine.
Mine is a 2-year lease, maybe yours is 3 years?
@Dakota
Yeah, mine’s a 24-month lease too. When did your lease start?
Ira said:
@Dakota
Yeah, mine’s a 24-month lease too. When did your lease start?
Oh, sorry, I missed that. My lease started in May 2024.
Ira said:
@Dakota
Yeah, mine’s a 24-month lease too. When did your lease start?
Oh, sorry, I missed that. My lease started in May 2024.
Mine started in September. Maybe the residual values were adjusted in that window. My residual seems closer to the used prices you’re seeing for '22 Winds.
@Ira
My 2024 LLR AWD residual for a 24-month lease signed this month was $28k.
@Dakota
That’s the minimum loss they’d take. If the car goes to a dealer, some of that $30k would be covered by the dealer’s sale. If it goes to auction, they could lose more.
This kind of thing is why you hear about stories like Ford losing $132,000 on each EV sale.
@Dakota
From what I’ve seen, residuals are typically around 50%. So if your car is worth $41k, that would mean the original price was about $80k, right? I think the $41k might be the capitalized cost, not the residual.
Good question. I’ve been wondering about this too. Based on some of the lease deals I’ve seen, I’m curious how realistic these high residual values will be when these 2-year leases come up for return.
No one knows for sure, but there might be a lot of cars with high residuals competing with new cars on the market.
@Aydan
It will definitely be interesting to see. One big factor could be the federal tax credit. If that gets discontinued, it could make new cars less attractive and boost used car prices. But unless that happens, I don’t think many leases will be bought out at the end of their term.