2019 Subaru Forester Touring - Why am I seeing sales tax?

Hey all -

First, huge thanks. This site (and especially the forums) have been majorly helpful for me. However, I’m still trying to make sense of the numbers that the dealership provided. Not sure what you’ll need so I’m just dumping all the info here!

MSRP: $36,389
Negotiated Price: $31,518
Trade In: $4,000
Lien Payoff: $4,000
Sales Tax (estimate): $2,377.99
Title Fee: $27.20
Handling Fee: $599
MF: 0.00035
RV: 60%

Feels like I’ve done a pretty good job overall, but I cannot figure out where that sales tax is coming from. I live in Colorado, so we’re taxed on the payments and not the price of the vehicle. I’m trading in a car for the same amount I owe, but my research shows that CO doesn’t assess tax on that exchange. Called my sales rep at the dealer and they confirmed that tax is on the monthly payment, but “it’s slightly more complicated than that and we’ll go over it all tonight.”

What gives?!

Yeah it’s only on the payment, that’s probably just taxes if it was a purchase. That’s the standard line to get you to come in so they can wear you out with endless bs. Do you have a deal sheet or screen shoot to share? It’s not complicated, he’s giving you a standard line. On a lease there’s no tax benefit on a trade, plus you don’t have any equity.

Figured as much. I don’t have the deal sheet - they wouldn’t let me leave with it or take a picture. I’m guessing that’s some more of their BS too?

Just goes to show there’s more to learning this stuff than just understanding how leasing works!

I assume you’ve gotten quotes from other dealers?

My guess would be, no.

The only other dealer I’ve spoken with wasn’t willing to go below 33.5k, so I felt at the time it wasn’t worth considering too much. I do need to circle back to them and see if they’re willing to counter the offer 31.5k offer from the second dealer that I posted above.

Still really early in process overall, so apologies if I haven’t finished some of the things you were expecting. Really just wanted to confirm that the research I’ve done so far about the sales tax was correct, and that it seemed fishy in the scenario I posted. Thanks for your help - it’s absolutely appreciated.

Yeah sales tax is monthly, no doubt about that. Colorado has plenty of Subaru dealers, I’d contact at least 5 dealers, make sure you’re scraping every nickel from the deal.

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Finally snagged that deal sheet. I’ve removed my trade-in for simplicity sake. It actually made the sales tax increase, so I’m assuming I was getting some kind of tax break there. Still need to ditch the windshield package, but does this help?

I guess I still don’t understand why the sales tax (roughly 8% in my area) is added to the price of the vehicle, which would seem to make my payments higher…

Throw it in the calculator, that tax number is not on a lease. It’s just some crap their computer throws.

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If I’m not mistaken your monthly payment of 379 already includes the monthly sales tax. They just rolled everything in to show you the final monthly payment instead of 349 + tax

What’s the invoice price?

The tax is listed under purchase option and is only charged if you do a purchase/finance.


An example of one of my leases,the tax estimate is always included in the breakdown.

Makes sense. I went in and talked to them last night and they were insistent that the monthly payments were correct (even though I calculated them here to be $50 per month lower). Do I just need to wait for them to put together the final leasing documents and verify that the tax isn’t included and the amount is more aligned to what I’m expecting based on my research? Seems crazy that they would do leases pretty often but not be able to tell me that the final numbers wouldn’t include that sales tax amount…

Here’s the part that obviously isn’t clicking for me. Are your lease payments based off the $38,448.52 amount, which includes sales tax? Or is it $33,787.10 (plus any fees you rolled into the amount)?

To me, it wouldn’t make sense for $4,186.42 to be added to the price of the vehicle before calculating lease payments, and then add sales tax on each lease payment. Wouldn’t that be double taxation?

This is probably a simple misunderstanding on my part, but would love it if you could point out where I’m wrong.

Just ignore the sales tax on the entire sales price part. They can’t and won’t charge you it.

99.9% of the time, user’s inputs into the LH calculator is wrong. Post a link of yours for us to compare to the lease worksheet.

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