If you live in a state where taxes are levied on the monthly lease payment (eg: KY) and you are acquiring a vehicle in a state where taxes are levied upfront on the total lease payment (eg: NJ) which tax method do you chose on the calculator? Where you live or where you acquire the vehicle.
I would prefer to pay taxes upfront as in NJ etc, but can I do that if I live in KY?
Thank you.
taxes are based off where you register the vehicle.
Plus, why would you want to pay all taxes upfront? Say you sell or total your car 6 months into the lease, you throw away 30 months worth of taxes (assuming its a 36 month lease).
To lower the monthly.
Some of us are on a budget…
so… make a down payment on the car not the taxes. same difference.
You dont get to choose how the taxes are paid.
If you’re in a monthly tax state, theyll get billed monthly.
You can lower your monthly payment with an upfront cap cost reduction, but it doesn’t prepay the tax.
How you get taxed is based on your registration address.
Not a big difference, but taxes on monthly vs upfront is like few $/mo difference (taxes on monthly being cheaper). Taxes are based on where you register the car.
Whether you pay upfront or decide to roll the taxes in the monthly, you can structure it either way in a lease contract.
Lets be pedantic here for a minute to help clarify the semantics.
You dont get to decide how the taxes are paid. When you “roll in the taxes into the monthly” in a tax upfront state, you are not paying tax monthly. The bank paid the taxes upfront and increased your capitalized cost accordingly. As with any increase of the cap cost, you now owe monthly rent charge based on that amount, and in many states, tax on your “rolled in tax”.
Sure, fair enough. More accurate statement. Overall $ impact is low, but yes, that’s how it is structured.
If youre in an upfront tax state and opt to roll it in so youre paying monthly, your net cost will be higher, not lower.
Then let’s talk about that. What is your budget and what is the deal you’re looking at.
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