I was just wondering if anyone has done a lease and turned around and did a buyout? It appears to be cheaper than a purchase price. Based on calcs, there is no sales tax due on full price of the vehicle. What am I missing? Buyout price is less than residual plus 35xmonthly payment?
There are a few vehicles where this makes sense; Acura MDX and Kia Stinger being the two big ones lately.
Taxes will vary a bit by state, but generally, you owe sales tax on the buyout price, as well as any of the taxes that were paid as part of the lease process. The lease gets saddled with the acquisition fee as well, so the costs really need to be looked at.
Generally, buyout price is residual plus the depreciation portion of the monthly payments.
What car are you looking at and what does your math look like on it vs purchasing?
There’s no point discussing a mathematical equation without all the numbers. What are they?
Thanks. I researched and sales tax is due on the buyout price during title transfer.
What kind of mystery car are we talking about? 
I bet it’s that $150k Ford Bronco Badlands!
Got 
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Unless there’s some way to dance around the taxes (which I doubt there is) I don’t think that’s super practical.
Now what might be interesting is buying someone else’s lease to have access to their buyout (or if it’s short-term, just wait for it to deplete into residual). Might be more relevant in today’s world where used cars are going for a premium - although most seller’s would likely have also entertained just selling it to a Carvana or Vroom versus a lease transfer.
Hmm that would work with a Kia, the invoice on a Kia EV is ridiculously high but the lease adds at least 10k discount on top of it.
So you lease, save 10k extra, then buyout. (Versus the 7.5k you get normally) (Not that I would buy an EV at this moment but just a POV)