Lexus NX450H+ lease and immediate buyout in Ohio

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Hi, just received a lease offer for a new 2025 Lexus NX450H+ (PHEV). I’m looking to cash in on the 7,500 lease credit (also trading in vehicle for $8600), however in Ohio we are taxed on the initial lease cost, and then again on the buyout price. I was wondering if it is still worthwhile to do this from a cost savings standpoint considering the tax issue. I’ve pasted the lease offer below with my calculation of potential savings despite the double tax issue.

My understanding of the tax costs (Sales tax in my area is 8%):
Vehicle sales price = 67,644 → if I just bought the vehicle outright the tax would be $5411.52
If I did a lease based on the lease shown below → taxes amount to $2821 (upfront lease tax) + $4631.2 (tax based on the net cap cost) = $7452.2

Thus, if I leased and immediately bought out, I would be paying an additional ($7452.2 - $5411.52) = $2040.68 → However since I am saving $7500 from lease credit then overall I’d be saving $7500 - $2040.68 = $5459.32, which still seems worthwhile to me unless I am flawed in my math or logic.

Can someone clarify? (I do know about one-pay lease but I feel iffy about dropping >$30k up front that could be all lost if my car were stolen/totaled)

Lease pic

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Why would that be the case? You’re not making a cap cost reduction.

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It was my understanding that in a one-pay lease, that if I were to total/have my car stolen (Say even within a week before I buy it out), the money I put upfront would be lost completely. Or is it the case that any unused monthly charges would be pro-rated back to me (leading to minimal loss?) I’ve heard conflicting reports of this and have never been able to get a clear answer.

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People have posted contracts here before. That’s the only pertinent thing here. Some rando’s opinions carry 0 weight in this situation.

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In Ohio. Tax is levied on the sum of the base payments plus tax on taxable cap reductions such as rebates/cash plus tax on taxable lease inception fees. In your case, tax is computed as follows…

(35 x 741.83 + 7500) x 8.00% = 2677.12, NOT 2821… (35 b/c 1st pay is capped). The dealer’s gross cap includes the 1st payment of 841. This payment is inaccurate. Frankly, their proposal is garbage for the following reasons…

  1. THE MF = .00349 (about 8.38%… YIKES!)… likely marked up.
  2. There is no dealer discount. You’re sell price = MSRP. COVID is over.
  3. The sales tax is incorrectly calculated.

At any rate, the dealer should have structured the lease as follows…

MSRP 67644.00
Sell Price 67644.00
1st Pay 836.12
Adj. Sell Price 68480.12
Accessories 1395.00
Gov Fees 244.00
Doc Fee 250.00
Capped Tax 2677.12
Acq Fee 795.00
Gross Cap 73841.24
Trade Equity 8600.00
Rebate 7500.00
Net Cap 57741.24
Term 36
MF .00349
RV (59%) 39909.96
Sales Tax Rate 8.00%

Check payment as follows…

Contractual Payment = .00349 x (57741.24 + 39909.96) + (57741.24 - 39909.96)/36
= 836.12

Bottom line: DAS = 0 followed by 35 remaining payments of 836.12 each

Your buyout within 30 days of lease inception is about…

(Net Cap – 1st Payment) x (1 + periodic constant yield rate) + Tax @8% computed thereon plus any purchase option (PO) fee plus other miscellaneous fees including any tax.

(57741.24 – 836.12) x (1 + .0841/12) x 1.08 = 61888.24 …… plus PO fee + other fees…

Your buyout sales tax is approximately 4584 plus tax on any PO fee. See your lease contract for details under early termination- purchase option.

Total tax is about …. 4584 + 2677 = 7261 … So, you’re close.

Hope this helps. ??? Let me know.

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Thanks so much for your thorough reply. A few questions I had:

Could you explain where you got 741.83 from? I thought the monthly was 836.12

Is it normal for the adj. sell price to include the sales price + 1st payment? I thought the 1st payment went towards the sale price not added to it.

Isn’t DAS 836.12 since I pay the first months payment at sale?

Yea I think you’re right, I looked on Edmunds and it should be closer to .00319, and if I did a one-pay ~ .00219. I’ll discuss that with them to lower it, but to my understanding, the MF probably isn’t a huge deal anyway since if I buy out in a week I’ll either get refunded the MF rent charges (for a one-pay), or not have to pay them to begin with (in a regular lease). Or would it be prudent to get the MF down since the initial upfront tax is based on base payment + rent charges?
For the MSRP price, I’ve actually heard from all the Lexus dealers near me that no-one will budge off MSRP and that I am lucky to not be getting a markup since these toyota/lexus PHEVs never even make it to the lot to begin with.

Again, thanks so much for your help!

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The 741.83 is the base payment and is used only as an intermediate calculation whose only purpose is to compute the Ohio tax base. It is computed by including only the taxable capped fees as follows…

Sell Price 67644.00
Accessories 1395.00
Doc Fee 250.00
Acq Fee 795.00
Gross Cap Base 70084.00
Trade Equity 8600.00
Rebate 7500.00
Net Cap base 53984.00
Term 36
MF .00349
RV (59%) 39909.96
Sales Tax Rate 8.00%

Gov Fees 244.00 … are excluded from tax base… not taxable in Ohio
Capped Tax 2677.12 … excluded from tax base… this is what we’re trying to compute

Because the 1st contractual payment is capped, we must also cap the base payment to be consistent. The formula is…

image

Pb = Base Payment
F = MF = .00349
N = Term = 36
C = Net Cap Base = 53984.00
R = RV = 39909.96

Substituting the above values into the equation, Pb = 741.83. To compute the contractual payment of 836.12, you do the very same thing only this time, you include ALL capped fees instead of only taxable fees. The non-taxable fees are the 244 gov fee and the 2677.12 tax as computed in the previous post.

“went toward the sale price” is the same thing as adding it to the sell price. IF your dealer provided you with a lease contract mirroring the posted worksheet, it would show an agreed upon value of 67644 + 841 = 68484. Observe that the dealer did not EXPLICITLY show the 841 capped payment although it is captured in the gross cap of 73990. Dealers will ADD the 1st payment to the sell price only IF it is capped in the lease. It is NOT disclosed in the lease contract. However, it is understood by both the customer and the dealer that the agreed upon value includes the 1st payment. No one else would ever know including the fund provider.

No. The 1st pay has been capped in the lease by the dealer. You’re financing (capitalizing) it over the term of the lease. The dealer pays the 1st payment to the fund provider on your behalf. The fund provider sends the dealer a check covering ALL capped fees except the acq fee. The lease can be structured so that DAS = 1st payment plus (or any other fees you desire) but the payment will be lower than 836.12 b/c you’re no longer capping it.

I would try to get them to lower the sell price in exchange for as higher MF since you are buying the car within the first 30 days. In a lease, all payments are paid one month in advance. So, even if you buy the vehicle 3 days after signing the lease, you’re still obligated to pay the first 30 days of the rent (finance) charge. See my calculation of the buyout in my previous post.

Also, the check and balance calculation in my previous post of the contractual payment is amended as follows…

Contractual Pay = .00349 x (57741.12 + 39909.96) + (57741.12 - 39909.96)/36
= 836.12

Finally, you’re allowing the dealer to control the deal. Bad idea. Do your research and create a target deal. Be sure to vet all data and perform all calculations. Next, create a lease proposal and email it to the dealer. Negotiate via phone/email. Never chase after the dealer’s numbers as they are often wrong or misleading. Below is an example of a lease proposal. It doesn’t have to be structured in the exact same way as there are a multitude of ways to structure a proposal.

image
image861×1142 36.2 KB

More ??? Let me know.

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