California Double Taxes? - Zero Drive Off / Capitalized Taxes on Lease

[jeisensc]

@CarHax

do you end up double paying taxes on the upfront taxes on taxable incentives if you capitalize them into the monthly lease payment instead of paying at drive-off? How about the registration fees?

If I understand the question:

• if you capitalize the upfront taxes and fees, you are paying a rent charge on that borrowed money
• in CA, the tax is on the lease payments
• By virtue of the payment being larger when you roll everything in, you are paying more tax yes (not double-tax per-se, but tax on the additional rent)

I saw you liked an old example I gave:

@jeisensc

Current BMW MF: .00082 / 1.968%
$3000 down = $83.33/mo
Additional rent: 83.33 * 0.01968 = $1.64
$1.64 * 36 = $59.04 additional rent to roll everything in.

Also, in the unlikely event like this, having rolled tags/title/taxes in, you only would have paid 1/36 on that, so instead of trying to recover your upfronts you only paid out $83.33 in actual utility you got for 20 days, plus $1.64 for BMW to front it.

Also as an aside, if you sold/trade/swap this in month 24, you paid $39.36 in rent but you DID NOT pay (or kept) $999.96 that would have gone to upfronts. $0 DAS shifts all but your monthly payment risk back to the captive (as long as you have GAP).

You’re effectively asking about the $1.64 here, yes?