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Discussion Starter #1
If you lease a vehicle do you pay tax on the entire purchase cost of a vehicle or do you only pay taxes on the amount of the lease?

For example... The purchase cost of the vehicle is $19,500. If you lease the vehicle your lease payments equate to $7200 over the course of 3 years.

Do I get taxed on the $19,500 or the $7,200?
 

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Pug Wrangler
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The dealer probably won't give you a straight answer to a question like this. According to NADA (The National Auto Dealers Association) the most profitable way for a dealer to move a car is to lease it. The buried costs are enormous, and they are counting on the fact that most people do not stay under the mileage cap or pay the "buyout" at the end of the lease. In essence, you are "renting" a car and will pay $.15 a mile for thousands of miles when you turn it in...
 

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Still Boatless :-(
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The dealer probably won't give you a straight answer to a question like this. According to NADA (The National Auto Dealers Association) the most profitable way for a dealer to move a car is to lease it. The buried costs are enormous, and they are counting on the fact that most people do not stay under the mileage cap or pay the "buyout" at the end of the lease. In essence, you are "renting" a car and will pay $.15 a mile for thousands of miles when you turn it in...

That doesn't answer the question at all...he's asking about the sales tax.

On a lease, you pay the sales tax on the montly payment. In Orange County, that's 7.75%. So, if the payment is $300 per month, you pay $23.25 per month sales tax. The "sales price" has nothing to do with it on a lease.

If you buy a car, you pay sales tax on the sales price of the car.

:)bulb
 

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Discussion Starter #4
The dealer probably won't give you a straight answer to a question like this. According to NADA (The National Auto Dealers Association) the most profitable way for a dealer to move a car is to lease it. The buried costs are enormous, and they are counting on the fact that most people do not stay under the mileage cap or pay the "buyout" at the end of the lease. In essence, you are "renting" a car and will pay $.15 a mile for thousands of miles when you turn it in...
You're absolutely right.

However... I have been doing a lot of math and running a lot of figures. If we purchase the vehicle our payment is just about double the lease payment and that is putting down the exact same amount of money prior to purchase or lease. When I figure the cost of the vehicle over 10 years for purchasing and 10 years leasing it works out to be about $200 more for leasing. When you figure that if you lease you get a new vehicle every 3 years, all repairs are covered under warranty... and you get a NEW vehicle every 3 years the lease seems to be the best option from a financial stand point. 12,000 miles a year isn't very much for those who have big commutes but my commute is 1 mile, we live in the city and very rarely do we venture of the city so a lease seems to be the best option.
 

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Discussion Starter #5
Oh yeah that 10 year cost of ownership.. You pay the same amount over 5 years to purchase as you get pay over the next 10 years to leae which means more cash on hand to invest.
 

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When you leas a car you are not being taxed on the entire car but you are being taxed on the amount of the monthly payment per month. In the old days leasing got a bad rap because everything was undisclosed residual, trade, money factor etc. etc. Now manufacturers have realized that it can be used as a tool to sell more vehicles to a customer in a shorter period. If the Camry lease is the same as the one out here it's a great program.
 

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You're absolutely right.

However... I have been doing a lot of math and running a lot of figures. If we purchase the vehicle our payment is just about double the lease payment and that is putting down the exact same amount of money prior to purchase or lease. When I figure the cost of the vehicle over 10 years for purchasing and 10 years leasing it works out to be about $200 more for leasing. When you figure that if you lease you get a new vehicle every 3 years, all repairs are covered under warranty... and you get a NEW vehicle every 3 years the lease seems to be the best option from a financial stand point. 12,000 miles a year isn't very much for those who have big commutes but my commute is 1 mile, we live in the city and very rarely do we venture of the city so a lease seems to be the best option.
Have you considered public transportation or a bicycle?
 

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Discussion Starter #9
No shit... for one mile I would walk it.:)devil I am sure he needs it for more then that though since it is hard to carry 20 grocery bags on your back.:)sphss
I usually ride my bike and will most likely continue to do so unless I'm running late. A bike isn't practical when it's 5 degrees out and snowing like crazy. It also isn't practical riding the lady to the hospital on the handle bars when she's in labor.
 

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Hub Cap Annie & Wheel
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I usually ride my bike and will most likely continue to do so unless I'm running late. A bike isn't practical when it's 5 degrees out and snowing like crazy. It also isn't practical riding the lady to the hospital on the handle bars when she's in labor.
Don't ever put money down on a lease unless your credit is not good and you have no choice. I've been leasing for 15 years plus and depending on the current interest rates(to purchase) or money factor rate(to lease) that's what dictates whether you should lease or buy. Depending on the warranty you may not be covered the full term of your lease, for instance my current lease on my 06 z71 truck is 3 years 36K, I'm at 43K and the lease is up come Mar 09, so I'm on the hook now. At the time the money factor rate was less than the finance rate to buy. I will either lease or buy another Chevy so I'm not worried about the over-mileage charge, I'm allowed 45K for 3 years, and I'll negotiate them into eating the overture charge. The tax rate is based on your county and off your monthly payment. Remember if your credit is golden the only money down should be your 1st mos. payment and vehicle registration. If your worried about a cheaper payment put the DP in the bank and let that help you make the cheaper monthly payment it never works to your advantage to put money down.
 

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Slum Lord
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You pay tax on whatever payments you make.....your monthly is taxed and any down payment(cap reduction) is taxed. If you purchase the car at the end of the lease you'd pay tax on the remaining balance .
 

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Slum Lord
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One viable method to reduce your monthly lease is to see if the bank allows multiple Security Deposits. This is a way of buying down the lease money factor without a "down payment" which is taxed. The Security deposits are returned at the end of the lease.....kinda like banking some dough but instead of getting earned interest you are saving on the lease rate.
I've seen people save 4-5% on their rates vs. getting 3% interest at a bank.
 

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Discussion Starter #13
So the lease deal we are looking at right now is $1999 due at signing and $199 a month through Toyota.

How do I avoid the money due at signing and keep the $199 payment? The credit is over 800 so it is not an issue.
 

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Discussion Starter #15
Danny it might be worth your while to take a drive down and pick one up from John. Smokin prices and great customer service.
Believe me I would. I'm getting employee pricing through my local dealer due to my aunt being their accountant and john was still saving me a few hundred bucks over them. Problem is I am located in Denver, CO.
 

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Hub Cap Annie & Wheel
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So the lease deal we are looking at right now is $1999 due at signing and $199 a month through Toyota.

How do I avoid the money due at signing and keep the $199 payment? The credit is over 800 so it is not an issue.
Without putting $1999 down your new payment will be approx.($20-$30 per month more per $1K not put down) Ziggy can probably hit the exact number, so instead of putting $1999 down take the higher pmnt lets say $249 that makes your out of pocket come to $50 x 36 = $1800.00, savings = $200.00 for a 3 year lease. Keep the down and take the higher pmnt.
 
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If you lease a vehicle do you pay tax on the entire purchase cost of a vehicle or do you only pay taxes on the amount of the lease?

For example... The purchase cost of the vehicle is $19,500. If you lease the vehicle your lease payments equate to $7200 over the course of 3 years.

Do I get taxed on the $19,500 or the $7,200?

You do not pay sales tax on the entire purchase price unless you but the car at the end of the lease.
 

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HELL OF A GUY
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heres my big prob,i'm trying to buy my lease from nissan,the pay off is 19000$,it will go through the aoction at 14-16 so i told nissan i would give them 16tho(cash),just send the paper work and lets do it,what they said was "no" and don't bother us again talk to the dealer and they hung up on me:mad:
 

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pvhca, I was wondering if you tell me what your lease payments are for your Z71? I bought my old lady a piece of $hit Jetta and paid cash for the stupid thing and now it's basically dead. Lost timing belt, anyways, I'm kind considering leasing a vehicle. What happens at the end of the lease if you stay under the mileage and what happens if you go over the mileage?
 

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Discussion Starter #20
pvhca, I was wondering if you tell me what your lease payments are for your Z71? I bought my old lady a piece of $hit Jetta and paid cash for the stupid thing and now it's basically dead. Lost timing belt, anyways, I'm kind considering leasing a vehicle. What happens at the end of the lease if you stay under the mileage and what happens if you go over the mileage?
I'm not pvhca but I can answer thsi question.

At the end of the lease you can either turn the vehicle back in or you can buy the vehicle. The buy back is going to depend on what you were quoted at the time of initial purchase. If you go over your miles you will be charged a per mile fee that will be disclosed to you at the point of purchase. You will also be responsible for any damage that is deemed excessive wear and tear on the vehicle. Needless to say make sure you get leather because cloth can tear easily and stains like a mofo and make sure to leave ample room between you and other vehicles in parking lots because those door dings can get expensive!
 
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