In TX you pay 6.25% sales tax on the full sales price of the vehicle on a lease, not the depreciation. The only way around this would be if the lender has full or partial sales tax credits available. If/when you buy your leased vehicle you will pay FULL TX 6.25% sales tax on that amount as well. You are taxed 2x in TX if you purchase your leased vehicle.
You will probably have little luck “negotiating” the purchase of your leased vehicle at the end of the lease. Base all of your calculations on you paying whatever the residual stated on the contract is if you choose to purchase at lease end … + 6.25% TX sales tax
Your understanding is correct for most of the country. Unfortunately, you’re in TX, so you pay the same amount for sales tax regardless of if you do a 12 month lease, 24 month lease, 36 month lease, etc.
TX sales taxes are not residualized. So, if you do roll them into your monthly payment instead of paying them up front, that money just gets added to your payoff amount if you buy the car before lease end.
As you said, you’re paying ALL of those taxes in some way shape or form during the life of that lease. Even if you buy the car before lease maturity.
Thank you so much for clarifying!!
I would stick to lease only considering double taxation. Do you think the lease numbers I shared above are reasonable?
Have you compared your deal to what others have posted here on the same vehicle?
I personally don’t know the Kia market that well. When you compare your deal to other’s posted make sure you account for TX taxes. A lot of the monthly payments you see posted may be lower, but their taxing situation may be different. So, compare your deal to others “pre-tax” then add TX taxes into that deal.
That would be for normal states, sadly Texas is crazy. They charge the full sales tax price of the vehicle to the leasing company, who makes you pay for it! When you buy it out, they again make you pay 100% of the sales tax on the buy out price. Its madness, they dont see the leasing company as a B2B transaction before its sold to the consumer.
Why would anyone lease in TX? If you’re going to pay the full sales tax upfront anyway, might as well buy it.
Or lease in Oklahoma?
They might not qualify for the tax credit, so they lease and then buy it out. Although, it seems like the double tax wipes out that benefit.
Not sure how to post own topic, but was this one was closest. Also leasing an EV6, but in NJ.
new here (hopefully not posting super incorrectly). Wanted to deal check
Agreed yesterday (headed back today to sign unless I’m told here I messed up!)
2024 KIA EV6 Wind w tech + mats
MSRP: $55,900
Sale Price: $50,645 (9.4% discount)
Price / mo: $320/mo. Including tax (NJ)
Quoted fees of $1957/mo. (Deciding if I should pay upfront or roll in - off rolled in, total monthly pmt of $402/mo - $0 down). Thinking rolling in is smart cause money factor so low?
Did I do ok?
No need to post on someone else’s thread.
Tax is based on registration zip code, not dealer zip