Hey all - sorry for a pretty elementary question. I’m in Ohio where taxes are a bit different with how they’re calculated on the total lease payment (not sure that actually impacts my question)…
Regardless, if I have the money and am willing to pay fees and taxes up front VS only first month being due - is there any reason not to?
First month due - effective monthly is 673.06
First month plus acquisition, dealer fee, gov fee is $669.81
First month plus the above plus 8% taxes upfront is a monthly effective of $665.02
So about $8 a month savings (for 36 months) to pay ~$4800 of fees up front… the effective monthly savings is due to me not paying taxes/interest on some of this stuff…
Any reason to not front that up front money to have some monthly savings? Maybe the compromise is the middle option of just fees up front. Reading old threads some of this goes down the toilet if God forbid, the car is totaled.
Also Ohio here, if you decide to buyout the lease, you again pay sales tax. The eariler you buy, the more in duplicate taxes you pay. I never pay the taxes up front b/c it doesnt really save you anything, and if the car happens to get totaled you’d be out all of that money as you mentioned.
Thank you - I was under the impression if I bought out the lease, I’d only pay taxes for things I haven’t yet paid. So if I paid the upfront taxes on the “depreciated” amount of the car - I dont get taxed on that again, like double taxes, right? Lets say the car is 50k. My lease is 20k of total payments. I’m paying tax on 20k. If I buy out the lease early, its like I bought a 50k car so I now am going to need to pay taxes on the remaining “car” which would be the 30k or defined residual value. But I didn’t think the 20k portion would be taxed again.
Maybe missing some details there, but directionally correct?
Sure, but every little bit counts which is why I was just asking the general question. I am getting a good deal and going out of state, sight unseen, undriven to get it…
I’ll say this, your average consumer gets absolutely obliterated by dealer lease games - its a system designed to confuse.
Ultimately this is a personal decision, but if those numbers are correct then IMO no way I’d come out of pocket for almost $5k DAS up front for a measly savings of $288 over the life of the lease.
You would pay the sales tax on your buyout rate. So if you’ve only made 1 payment you’ve you would owe taxes on the buyout number of 50k-rebate and payment. It definitely makes lease buyouts more expensive in ohio. Generally only worth if it there are massive lease rebates that arent applicable to purchase, or something you wouldnt qualify if regular purchase such as the EV credit.
Likely the money factor is costing more than the double taxation of that shared 20k (~1500), but its somethin to be aware of.
