Buying vs leasing in TX

Hello All,

I have been following and reading up on lot of articles for last couple of weeks when I stumbled upon this excellent forums. To be honest I kind of became addicted :slight_smile:

Here is my dilemma and just wanted some validation before I go on with my search

I am planning to buy a 7 seater SUV in Oct -Nov 2017 and I have narrowed it down to Audi Q7,Acura MDX or Volvo XC90. I will mostly go for 2017 model as the new 2018’s would be coming in and I would be getting good discount( as all these models have no major redesign planned). After going through forums I realized that TX folks need to pay full sales TX even if we lease for 3 years so what would you recommend i.e. should I buy or lease.

I plan to test drive and narrow down to one SUV by end of this month so that I can begin researching on price etc. and be ready for negotiations during October.


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Although you would be paying for taxes for the entire vehicle in Texas you may be able to make it work for you. Ultimately the crowd here prefers to lease because we only keep cars for 2 to 3 years. We have an afinity for the new car smell. It’s about getting the right deal. Q7 misses the marks many times while the MDX can do well. It boils down to your bottom line and needs. Good Luck

Hi, Houston-area resident here. The holy grail is to lease on a month when the dealer has tax credits from the manufacturer’s captive lease company. These tax credits serve to reduce or completely 0 out your tax liability.

When you start to gather your quotes, just ask the sales person if he has any tax credits that month. They won’t usually lie to you (even if they do lie to you, they will have to show whether or not they are paying tax on your lease paperwork).

Note, that the sales people will try to use tax credits as a kind of manufacturer to dealer incentive. So when they quote you, they might say, “I’m saving you $5000 with my $1000 discount and $4,000 in tax savings.” But you know that $1,000 dealer discount is BS, so keep pushing.

I leased my BMW i3 with tax credits and paid 0 tax. And I’ve been talking to Volvo dealers and know that they have had tax credits for at least the last couple of months.

When you can get tax credits, it suddenly makes leasing in Texas look way better than all those other states that only tax the monthly payment. Plus, we have exceptionally low tag and registration fees!


Is this tax credits a texas only thing?

Can you find out ahead about it before going to the dealer.

Sorry, I don’t know about other states since I’ve only leased in Texas.

I have never found a way to identify tax credits before asking a dealer. But they cannot lie to you since they have to properly report the taxes on your lease documentation. It will be quite clear whether or not you are paying taxes or just lining your dealer’s pockets.

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Thanks LeaseLoso. As you said I think it boils down to my choice and I will keep looking at the options to see if I need new car every 2-3 years or am type of guy who wants to just go with a car and keep it for 6-7 years :slight_smile:

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Thanks Shellzj. I also live in Houston so your comments have really piqued my interest of going through leasing route. I need to explain the pros and cons to my wife and see if this makes sense as if I can offset the sales tax on full price that is a good win for us Texans. I will keep checking the forums and ask these specific questions once I have narrowed down my vehicle choice. I will come to forums to research more and then get back with some numbers but these couple of posts helped me feel that even we are not worse off than other areas of the country.

I can attest to what Shellzj said. I’ve leased since 2013 (Cadillac ATS, Lexus IS, another Lexus IS) in Dallas. I’ve used the same family of dealerships and my salesperson has found a way to use tax credits each time. I have had good luck with reaching out to them ahead of my purchase and they will let me know when they have the credits available. They have no reason to hold out on you or lie about having tax credits because it does not cut into their bottom line and they can’t apply them to anything other than the tax amount which will be present and clearly stated on your paperwork. I know Cadillac, BMW, and Lexus have programs with tax credits. Of the brands you’re interested in, I’m not sure. I would think that if you can find one brand that does have them, you can use that as a bargaining chip against the others (i.e. if Volvo does, then negotiate that with the Acura or Audi dealers and ask if they have similar offers to offset tax). You’re in a good position since you have several months to plan your purchase. I think the sales departments usually know find out about whether or not they have tax credits within a month of the credits being available.

Shellzj we just moved to Austin from MI, Looking for a decent lease on a 5series. Which BMW dealer did you end up using. It seems there are a lot more dealers in the Houston Area… Thanks

Yes, a lot more competition in Houston. I leased from BMW West, which is actually the closest Houston dealer to you!

But being in Austin, you can also easily cross shop with dealers in San Antonio and Dallas too. A buddy of mine in Austin bought his Q7 from a dealer in San Antonio, and the salesman dropped it off at his house!

FYI-Recently spoke to my friend at Austin Infiniti and they currently have some tax incentives. No tax really helps the deal as stated before.

I’m in Dallas and the full tax on the cars I’ve wanted to lease has kept me from getting to the ideal payment that I’ve wanted on some of them. They only way to find out is just to ask a salesperson or have they notify you when it triggers? No online resources available?

Its a favor they are doing to you - to make a sale. Even though its not their money (its their manufacturer’s financing arm). But why would anyone offer you sales-tax credits (which are limited in amount, definitely NOT unlimited $$s!) - unless they need to make a sale - so badly, giving that credit to you ! Heard only luxury car financing arms do this - Mercedes (MBFS), BMW, Lexus, Infinity, Cadillac and iirc Volvo been offering such sales-tax credits (somebody - if you have full list of these manufacturers, please share here)

Mercedes - after mid-point of month
BMW - usually year end (and most likely with prepaid lease too, yes, GAP included with PrePaid leases too)
Lexus - periodic (but mostly prefer to do credits if you do fully prepaid lease – but this also drops MoneyFactor too significantly – its a double win with Lexus PrePaid lease… yes, GAP insurance included too)
Infiniti - periodic
Volkswagen - some-times / occasionally
Volvo - unsure when would they have it…
Cadillac- unsure when would they have it…


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Ah yes, I’ve actually experienced this with Lexus when I leased two years ago. Didn’t know what I was doing back then!

Yea, what @Sc9182 said. There’s no easy way to figure out the credits. Every now and then I will see emails from dealers advertising tax credits (Cadillac sent out an email the last few days of August), but usually I have to ask.