Will the massive Hyundai and Kia recall affect car leases

Did you hear the bad news about Hyundai and its sister company Kia?

They have voluntarily recalled more than 1,480,000 cars.

According to Hyundai, 2.4-liter 2011 to 2014 naturally aspirated GDI and 2.0-liter T-GDI are the main culprits.

Models such as the Hyundai Sonata, Kia Optima, the Santa Fe Sport, the Sportage, and the Sorento have been named in the recall.

So here is the million dollar question:

Will this affect Hyundai and Kia leases for us?

I am terrible at predicting the future…

But here is how this recall might affect car leases:

To get in front of this bad news, Hyundai might more aggressively discount new car leases. They might give each lease a Residual Percentage boost. This would artificially raise the Residual Values on their car leases (which lowers the lease’s monthly cost).

On the flip side, the artificial rising of Residual Values means the car will not keep its value at the end of the lease term. This means their cars will be “underwater” in the end. That is, the car’s Residual Value would be higher than the going used car rate.

In simple speak, if you walk away from a lease at the end, this could be a money-saving opportunity for you. The artificially lower Residual Value will not affect you.

But:

If you are like me and always flip your leased cars for profit, getting a Hyundai or Kia could be a deal breaker.