Hi, I’m looking for a short-term lease for around 10 months at around $250 per month in Texas. As I might be leaving the country after 10 months, I don’t want to commit to much longer.
The idea of a lease assumption sounds appealing because it seems quite similar to renting in that the costs are all-inclusive in terms of maintenance, the vehicles are usually under warranty, and many include wear-and-tear allowance. Basically, I’m looking at it as a medium term rental where I just need to worry about lease fee and insurance.
My understanding is I can pay someone to check over the car to make sure it’s in good shape and I won’t get dinged on wear and tear fees, get it shipped to me in Texas, pay the monthly fees, drop it in at a local dealer when I’m done.
I’ve seen swapalease.com, and it certainly seems like this ticks all the boxes, but I’m getting stuck on the tax issue.
The Texas Comptroller states:
Do I owe tax if I bring a leased motor vehicle into Texas from another state?
When a vehicle is leased in another state and the lessee brings it to Texas for public highway use, the lessee (as the operator) owes motor vehicle use tax based on the price the lessor paid for the vehicle. The standard tax rate is 6.25 percent. Credit will be given for any tax the lessor or the lessee paid to another state.
So, it seems I would owe the difference between the 6.25% of the vehicle price and the tax paid in the origin state. How would one calculate this before acquiring the vehicle? It seems quite a risk!
Or is there a better way of doing this? Restricting myself to vehicles already registered in TX perhaps?
The short answer is you are likely to be due to pay the extra tax, but that most people seem to be able to avoid it at the DMV. I’ve looked into this myself but the shorter the lease that you’re taking over the bigger risk, how big of a risk I don’t know. I’d love to know about this as well.
For a possible 10 month lease takeover you have a few problems:
I think some makes don’t allow transfer that late in the lease.
There’ll be a lease transfer fee and a disposition fee for the lease, plus any extra charges for excess wear/tear/damage on lease trade in. That makes it much less attractive for the 10 months without incentives from the original leaser.
With such a specific timeframe you’re likely to have to go for a lease that’s a little longer or shorter, thus causing more complication.
If you can find a nice car that has incentives in Texas for the right term it might work. The other option is to get a really well discounted new car on lease, then flip it in 10 months. It shouldn’t be VW, Audi, Infiniti, Nissan as they either don’t allow lease transfer or you’d still be legally responsible for the car after transfer. For $250p/m you would have a good amount of cars to choose from, but you’d need to get a really good deal to make flipping it easier.
Yeah, that’s the thing: I want to minimise risk of unexpected costs. So, risk of having to pay either, 1) 6.25% sales tax for bringing car across state lines, or 2) being on the hook for a lease that no one wants to buy, isn’t going to work for me.
I guess finding someone who wishes to offload their lease in TX is best option for me. Even if I have to pay for a month or two I don’t use, i’d rather do that than gamble on a potentially bigger hit down the line.
I wouldn’t run the risk. I know someone that got stung not only by the motor vehicle tax when bringing it in the state, but also was hit with property tax because he lived in one of the few places in the state that imposes property tax on leased autos… Just takeover a lease from someone within Texas…
