FlexChoice, Kia’s answer to longer finance terms

With auto finance terms running on for 60 to 84 months, how does the automaker get those customers back sooner? That is the question.

Kia says it has the answer. It’s called FlexChoice.

“We needed an effective alternative lengthy finance terms,” explained Robert Staffieri, Kia Canada’s director of marketing. “FlexChoice provides flexibility for our customers allowing them to get into new Kia vehicles sooner rather than being locked into long term loans.”

The terms are 36, 48 and 60 months with a mileage allowance of 24,000 km a year. Longer mileage allowances are available.

At the end of the term, the customer can turn in the vehicle and walk away or, the automaker hopes, drive away with another Kia vehicle after paying a $190 fee (not applicable in Quebec), subject to the usual wear and tear rules. Or they can buy the car. The price is the residual balance.

So it’s a lease.  

The customer has the option of continuing to make the payments for the balance of the amortization period. In Quebec, that means they can continue making the same payment until the full amount of the vehicle is paid off.

Staffieri says that means that if the FlexChoice lease rate is, say, 1.9 per cent, the customer pays off the car at 1.9 per cent. In the rest of Canada, the customer must re-finance the balance at market rates.

Now, it’s a loan.

“In most cases the payments are lower than a lease payment and only slightly higher than 60/84 finance payments.  Since it’s a loan, the customer retains ownership of the vehicle which can be paid out at any time.”

Other bonuses: no security deposit and no first payment due on delivery.

FlexChoice is available on all new models.