Confirmed from another MME owner who picked up last week using their PCO - dealer told him that the lower price adjustment refund will be sent by Ford Corporate as price protection check.
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I’m considering leasing an iD.4 to get the $7500 credit. What happens to my (Texas) sales tax with my trade in (40k trade in, 13k equity)? I was planning to buy and I’m not sure what value is taxed when trading in for a lease.
I have a deposit on one a few hours away I was going to buy outright later this week. I wonder if they’ll balk at working out a lease, suspecting that I’ll buy it out immediately. Having never done a lease, anything I should be looking for in the lease to make sure that $7500 isn’t offset by other costs? It sounds like MF and residual is irrelevant for an immediate buyout.
The bigger challenge with tax in texas is youre taxed on the full value vehicle at lease inception and again on the buyout price at lease buy out as far as i recall.
Is your trade a leased car? Texas doesn’t credit the selling price if your trade is a leased car. Are you receiving “tax credits” (hate calling it that since it’s not really a credit!) on the iD.4, i.e. the tax is 1% or 1.25% on the lease? You’ll have to weigh those two things, as well as the amount of tax you’ll pay on the immediate purchase. If your immediate purchase is $27,000, then your tax is only $1,687, so you still come out ahead, even if you pay 1.25% tax on the lease.
VW Credit/Audi still charges unearned interest on buyout in this situation, I’ve been advised.
Residual plus remaining payments.
Since when? They didnt on mine about a year ago.
I’ll dig deeper into it as it could be a new thing.
That’s just what I’ve been advised of by a few folks when asking specifically about the pass through on Q4, fat etron, etc.
My trade in isn’t a lease. I would be paying tax on ~$4k if I buy the iD.4 outright. If I have to pay tax on the full value with a lease, that chips away at the $7500 savings. If I have to pay tax on the full initial value, and the buy out, then it’s probably not worth it.
What’s the 1.25% tax, is that in lieu of sales tax? The purchase sales tax is ~6.25%.
Id love to see the contract. In my experience, a lot of dealers will make that claim because they either dont read the contract or don’t understand what it says.
But things obviously can change, so could be legit.
People call them “sales tax credits,” but it’s really a reduction and not a credit to you. It’s because the captive has “trades” via lease turn-ins and is effectively able to offer you a reduced tax rate. It’s not always available, but when it is, it can be 1% - 1.25% instead of 6.25%, and you may or may not also have to pay a slight “inventory” tax.
In regards to this.
Your dealer may or may not have a lender tax credit to issue on that ID4. Ask for it, it can’t hurt.
Got it. Do they usually or often make you pay the difference if you buy out the lease shortly?
I’ll ask them for a draft contract and see if it lists out what/when I’ll pay taxes.
Generally, no. It’s not an actual credit subject to recapture. That’s one of the reasons I don’t like calling it a credit!
Do you know if my tax liability (after recapture) is based upon the new vehicle value, or is reduced by the value, or equity, of my trade in? Based upon what mllcb42 said, it sounds like I pay on the full value, the trade in doesn’t reduce the tax.
I don’t think there is any recapture. I haven’t seen anything as such, since it’s not a credit to you. That’s honestly something you need to call the comptroller and ask.
You can trade a leased car in TX and get the trade-in offset to the sales taxable value of the transaction. The issue is the recent restrictions imposed by leasing companies on trading (effectively, selling) your leased vehicle to a non-brand dealer.
The good news is that we’re now seeing a lot of TX sales tax credits offered from the OEM leasing companies, so this may be a moot issue for the original questioner. For some reason, you have to pry them out of the dealer to include the sales tax credits on the deal.
Owned/Financed to Lease gets tax credit on trade allowance.
Lease to Owned/Financed does not.
Lease to Lease may get tax credit on trade allowance, this depends on lender.
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Ok, I misunderstood on the recapture. I’m going to give it a shot and see what contract they offer.
I spoke with the comptroller and they didn’t really clear it up. Depends if it is a operating lease or conditional sale. The rules for it being a conditional sale are vague, particularly what constitutes a nominal value for option to purchase clause. I might see if the leasing company has any insight.