Hi, I am considering doing a new lease. I was looking back at the lease I signed three years ago and I need some help understanding it (I didn’t do my homework enough).
Could anyone help take a look at this lease and see if everything was as they promised? The agreement was 10% off on a MSRP $59,215 car, residual at 61%, incentive/rebates was $4,000 ($1k college grad + $3k holiday) and base MF at 0.00152. With that said, I ended up paying $616/month for 10/36. I am in Delaware.
I see the selling price is correct at 53,200 (10% off). But the capital cost reduction is not $4616, but $1,713.05. There is a sales/use tax of 2,261.00. Based on my research, it seems that is b/c lease tax in DE is 4.25% on sales price and 2% on monthly payments, and the capitalized cost reduction is decreased because of this sales tax. If this is true, then I am basically paying ~$100 on taxes each month, making a good deal on a lease almost impossible.
Could you check if my understanding of the numbers is correct and the dealer was honest about their promise? I am considering what I should do next, given this tax on sales price, I don’t know if leasing still makes sense, but I don’t know better options to my knowledge.
Bmw likes to apply their rebates as money due up front, so the $4000 rebate is being used to cover $2287 in taxes/drive offs and the $1713 balance is applied as a cap cost reduction.
Seems you guys figured it out, similar to what I thought was going on. However I am not sure about the difference between incentives and rebates. But at the time I qualified for 1k recent grad (incentive?) and 3k holiday (incentive?), seems they are treated as rebates.
So nothing weird is going on here, right? It took me some time trying to figure it out. The relatively high monthly cost is b/c of the 4.25% tax on full sale price instead of just on monthly payments. This means I had a solid deal but was hit by the tax, bummer! Now I have to pay that tax again for a new lease.