Hey all,
Been reading a lot and posting some over the past few weeks. I’ve finally put a deposit down on a 2023 Rav4 Prime XSE. I’m feeling good about the deal and would love to just have some input to make sure i’m not making any major errors specifically as it relates to a “One Pay Lease”.
Backstory - I’m leasing the vehicle to take advantage of the Toyota 6,500 lease cash bonus. I plan to buyout the car immediately after the lease is signed and before the 2nd payment would have theoretically come due on a standard lease.
As I understand it, the key difference for me from most of the lease posts i’ve read is that I live in NY state. NY handles lease taxes differently than most other states. I believe that here in NY you get charged the FULL sales tax of the lease up front where as in most states you pay the sales tax on each monthly payment you make. So, If I were to do a standard lease, i’d be paying double sales tax on a portion of the cars value.
- Once on the cost of the full lease
- And then again on the buyout cost.
Here is an illustration of how I understand it.
So, i’ve been told by some nice people here and another reddit poster to do a “one pay lease”. I believe this means that my amount thats due at signing is a lot more than most other people trying to take advantage of the lease cash offer. Its the 36 months of Depreciation + the 36 months of Rent + any fees + the sales tax on that 36 month portion of depreciation. However, when I then do my Buyout a month later, the buyout cost will now only be the residual value of the car. So much lower than the buyout cost is in a standard lease. The sales tax duplication is greatly minimized.
Thats awesome if you live in one of these states where sales tax is collected up front. However, HERE IS THE KICKER. DO YOU FORFIT THE 36 MONTHS OF RENT (interest) YOU MADE UP FRONT?? I honestly am not sure. So i’m hoping someone here can help me! Based on my reading of other peoples leases I think i’m fine. But, of course the Toyota sales manager was very dubious of my plans. Admittedly he said he wasn’t sure one way or the other, but that he had never seen anything like this before.
My understanding from another post is that if you do a One Pay Lease, your buyout cost is calculated this way.
Buyout Cost = (Residual value + Sales Tax) - (Unearned Rent)
If that is in fact correct, then it does seem like the One Pay Lease method truly allows you to circumnavigate the NY state law on how sales tax is collected on Lease Payments!
Assuming that the One Pay Lease works as expected. Here are my numbers.
| 2023 Rav4 Prime XSE | All-Weather Liner Package, Blackout Emblem Overlays, Weather Package, Rear Outboard Heated Seating, Special Color |
|---|---|
| MSRP | $50,034.00 |
| Agreed to Sale Price | $47,187.00 - (5.69% off MSRP cause its 2023) |
To sweeten the deal, the dealer agreed to install the OEM Trailer Hitch, Wiring Harness, and Cross bars. They are selling me the parts below MSRP and installing on their dime.
| Cross Bars | Cost to me - $240.00 | MSRP - $315.00 |
|---|---|---|
| Trailer Hitch | Cost to me - $500.00 | MSRP - $555.00 |
| Waring Harness | Cost to me - $225.00 | MSRP - $240.00 |
Here is the adjusted sale price including the dealer added accessories.
| Adjusted Sale Price w/ Accessories | $48,152.00 | |
|---|---|---|
| Adjusted MSRP (although this is basically irrelevant from this point on cause the residual is factored from the original MSRP and not the adjusted one. | $51,144.00 (5.85% off MSRP cause its 2023 and discounted Accessories) |
Here is how the Lease breaks down
36 month/10k
APR: 8.34%
| Adjusted Sale Price | $48,152.00 |
|---|---|
| Depreciation | $15,634.00 |
| Rent | $8,470.00 |
| Sales Tax - (8%) | $2,514.00 |
| Fees (Doc, Government, Acquisition) | $1,021 |
| Lease Cash | -$6,500.00 |
| NY state incentive | -$1,000.00 |
| TOTAL DUE AT SIGNING | $26,640.00 |
Here is where I have my main question. Will TFS reduce my buyout price (the residual) by the unearned rent. Which will be 35 payments of $235.28
| Residual - 52% of original MSRP | $26,018.00 | |
|---|---|---|
| Sales Tax (8%) | $2,081.44 | |
| Unearned Rent (35 payments of $235.28) | -$8,234.72 | |
| Buyout Cost after 1 month | $19,864.72 |
Total Cost of the car:
| One Pay Lease | $26,640.00 |
|---|---|
| Buyout | $19,864.72 |
| Total | $46,504.72 |
IF, TFS wont calculate the buyout cost by subtracting the unearned rent from the residual, then i’ll need to go the standard route and eat the double sales tax. Which, I believe will add about 1,100 bucks to the cost.
All this said, i’d really appreciate the community’s help fact checking me and double checking my math! If it works out, thats basically a 9k reduction in cost had I bought it at MSRP and outright. It seems too good to be true! But then again, i’ve seen a lot of other people post here and on Reddit with success. Hopefully this works out!
Thanks to all!
