I am planning to lease a Lexus NX 450h+, and then do an immediate buyout to capture the $7,500 lease credit offered by Lexus. I am trying to determine how to best structure the lease so that my transaction costs are as low as possible. I know I will have to pay the lease acquisition fee and one month’s lease payment.
My initial question is what term/annual miles to choose. I assume picking the lowest annual miles will lead to the lowest monthly payment, which should save some small amount of money on the one monthly payment I make. However, using a lower annual mileage number will lead to a higher residual value, which will lead to a higher buyout price.
Is there any advantage to trying to do a zero drive off lease? I know the costs will then get rolled into the monthly payments, but do not really understand what will then happen when I buyout the lease within a few weeks. A zero drive off would save the first month payment and acquisition fee, but I assume it would lead to a higher buyout cost, so it might be a wash.
Also, in the past, some dealers I dealt with (not Lexus dealers) would offer a larger discount on the purchase price and/or a reduction in the acquisition fee in return for a higher money factor. Assuming this is something Lexus dealers offer, it would be good to try to do so, correct? I would only be paying the higher money factor cost for one month, so I should save money in the long run.
If there are any other variables I should be aware of, I would appreciate advice about those.
I just finished the buyout for the same car for the same reason. After paying the sales tax at the DMV (in CA) the total savings from the cash purchase price was $7,228.
None of the factors matter as I bought the lease out in a week - the dealer applied the tax credit as a rebate to reduce the cap cost. I paid nothing down on drive off.
Thanks for the information. So you did not even have to pay the acquisition fee? Was there any additional registration fee when you went to the DMV to pay the sales tax?
So after looking into this more, I believe I understand how the transaction would work.
If I do a zero drive off lease, up front costs like DMV registration costs and the Lexus lease acquisition fee will be added to the monthly payments that are scheduled to be paid for the remaining 35 months of the lease.
When I pay the lease off after a few week, I will have to pay the sum of those unpaid monthly payments (less the money factor finance charge), plus the residual value. So it really does not make a difference if I pay the costs at signing or a few weeks later, except for a small extra finance charge for the short period between signing and payoff.
After I make the payoff and receive the title from Lexus, I will then need to go to the DMV and pay sales tax on the buyout amount, and pay (again) for the annual registration fee. As such, the additional transaction costs involved in the lease/buyout (vs. a straight purchase) will be the acquisition fee of $795 and the second DMV registration fee.
I would appreciate comments about whether I am missing anything here.
Plus, maybe I will try out the hack suggested awhile back of leasing the car in my name, buying it out, and then gifting it to my wife within 10 days. She would then go to the DMV and register it without having to pay sales tax since it was received as a gift.
The upside is it would save over 4k. The downside is if she owns the car, I guess I would have to let her drive it.
Wondering if this is a good strategy for Texas, since 100% of the sales tax is rolled into the lease payment, and if you turn around and purchase the vehicle, sales tax must be paid again.
Hello, thanks for the great information. What happens to warranty when you buy out the lease early or immediately on getting the papers ? Do you get the 4 year/48K mile warranty ?
@cruiserchuck - Did you complete the process and have the title in your name ? I’m in the middle of it, received the “Vehicle/Vessel Transfer and Reassignment Form”.
How long after receiving the above form did you receive the “Certificate of Title” - and did you receive it from Lexus or from CA DMV ? I needs to take that Title to the DMV to receive the new transferred title in my name - the problem is DMV asks to do that within 10 days of the buyout, and I have not received the tile in 10 days of the buyout date. How many days did you receive the title after the buyout date and did you have to pay a penalty at DMV ?
