I would prefer to do a regular old fashioned lease, but with high interest rates and large rebates it might make more sense to do an early buyout one month in, I want to determine the best srategy for it.
Using a buyout formula of:
Adjusted Cap Cost - first payment + tax on the residual amount
As it pertains to someone in NY:
negotiate for the lowest ACC
do I care about the high money factor if I am buying it out right away? I guess NY has a tax on the total lease, so the lower the MF, the lower tax burden. But a lower cap cost prob goes further than lowering the MF?
do I care about mileage or term? Longer term and more mileage equals lower residual so that might be beneficial for the tax bill on the back end?
a few people have suggested to do a one-pay would be beneficial too but I need clarification. Is it just to lower the money factor or is there another benefit that I missed.
It’s to lower your tax liability on the buyout. NY is a tax upfront state and then taxes on the buyout amount, so if you do a one pay, your buyout is much lower, so your sales tax is a lot lower. No need to pay double tax on some of the value of the vehicle.
Beyond that, you want the lowest ACC you can get and target a lease term that has the lowest money factor so you have the lowest lease cost relative to how much depreciation is paid.
