At What Point Do Taxes Outweigh Good Value?

I have a pretty poor deal on a 2016 IS300 coming to a close - I’ve been poking around this forum for the last 18 months or so.

I am not sure if a good value is possible given that I live in downtown Chicago and the taxes are going to be 18%. That’s 9% state sales tax + 9% Cook County lease tax.

At this tax rate, is a good deal on a lease a pipe dream? I realize I can still negotiate and work prices down, but I’m wondering if that’s a threshold where purchasing and financing a vehicle would be a much better option given the 18% incremental I’m going to pay on a monthly payment. What would your cutoff be?

Cutoff would be how much you can handle. People lease in Cook all the time.

It will depend on TCO. When you finance, are you still going to trade every 2-3 years? How much do you drive? Are the incentives/rebates going to be the same in lease vs finance? Will $30/mo more in taxes stop you from leasing a luxury car with pkg you like or just get the base model since you really dont care if its got ugly leatherette and fanatics laugh at you as long there’s a bmw logo in front to save $30? Maybe my last question is somewhat insensitive and irrelevant but it still gives you the option to lease and not worry about selling. There are so many factors in lease vs buy and saying cutoff without any data is pointless. Your decision needs to be data driven since you seemed to be a logical person.

In short, get quotes and post here in leasehackr!

In general, I do not like the base model anything. I almost certainly would never get a base model car unless the deal was so absurdly worth it that I could get over the perks of the mid to upper tier models.

I drive not much - I’m turning in my lexus with 9,000 miles on it (after 36 months)… so I will be going for a low to ultra-low mileage lease. They definitely got the most out of me on this current one.

Then there’s also the type of car I want. Since I don’t drive much, I want something cool - but the additional taxes kind of put cool cars outside of my price range. I paid $525/mo all-in on my IS, so I’d like to bring that down to $450 or less all-in. At 18% tax that puts me at about $375/month pre-tax.

So you paid $18,900 just in depreciation and rent charges to drive 9,000 miles. That’s $2.10 per mile. That is COMPLETELY INSANE. That’s Lamborghini level usage cost. You could literally Uber Black everywhere for cheaper.

If you want advice - buy a nice car and stop leasing. Leasing does not make any sense for people that drive extremely low or extremely high miles. At only 3000 miles a year you can practically get anything you want used or CPO that will be WAY cooler than an IS and not really have to worry about maintenance cost or reliability since you drive so seldomly. You are lighting A LOT of money on fire by leasing.


At 18% tax I would consider buying and holding for a longer term. The longer you can amortize those taxes, the better.