Are you aware that in TX on a lease buyout, you get to pay sales tax again?
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so pay full sales tax on selling price to start lease and then pay full tax on buyout again? lol bye $4500
Actually my research shows that in TX you don’t pay the tax again at buyout, but I’m interested if you know something different.
According to section (b) in this TX code:
Tax is not due for lease buyouts by the original lessee if the market value is not over the payoff.
Yah, that’s what it says, but I’m yet to see anyone successfully manage that
What have you seen as far as unsuccessful management? Was the buyer an original lessee or a new buyer (which doesn’t qualify for the buy tax waiving)?
People having to pay full tax again on buy outs
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To be complete, my reading of the TX statute is that if the purchase price is above fair market value, then you might have to pay tax on the difference between the residual and market. The bimmerfest thread had lots of people talking about what is market value so I’m guessing that was in play for some. Others were probably not the original lessees, who would definitely have to pay tax. And I’m not even sure an immediate payoff is considered a buyout; it may be considered differently for tax purposes.
It’s certainly considered a buyout, but it very well may not be considered a transaction occurring at lease termination. A lease typically has two separate early ending clauses, an “early buyout”, which is what you’d be doing, and an “early termination”, which you would not be. That suggests there is a distinct difference there.
With all that said, you very well may be correct that tax isn’t supposed to be due, so be sure you include in the cost of your Prius the legal fees of suing the state.
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Thanks for that distinction. I would call Toyota Finance to do the immediate payoff so would presume they have proper workflows for dealing with taxes, unlike individuals or even many dealers.
Just for reference, here are some links where the immediate payoff has apparently worked out for people in similar circumstances:
https://www.reddit.com/r/rav4prime/comments/15w0imi/explain_leases_like_im_a_moron/
https://www.reddit.com/r/Ioniq5/comments/12nb20a/leasing_101_or_how_to_get_a_good_deal_on_an_ioniq/
https://www.reddit.com/r/rav4primesales/comments/159oj5v/6500_lease_incentive_and_buyout/
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Every buyout gets the buyout with the tax info provided by the bank. There are no “individuals” processing them. Even in the cases where a dealer does it, they’re still getting all the info from the bank.
Your first link looks like someone in WA. Are there specific examples in there of Texas deals? I’m not going search through all the comments for anecdotes.
Yes, not all the examples are from Texas but some are.
So the bank in your example is Toyota Finance right? Are you concerned that TFS doesn’t have correct info? Just trying to understand your concerns.
You have to pay sales tax twice so don’t do that.
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My suggestion is rent a car and find another deal. Try for MSRP. Look for a neighboring state broker as well.
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OP, beware of target fixation. I think you’re getting good advice here to slow down and check the details. I like the advice of renting a car for a week. My bet is that by the end of that week you’ll have found a better deal if you’re willing to widen your search. There may even be some here that can assist if you ask for help bettering this deal.
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Leased the Prius Prime SE and drove it home.
I figured out what the $500 discrepancy was in the numbers that I posted above: missing dashcam. The deal was made when the car was supposed to include a port installed dashcam for $499, but for some reason the port didn’t install it and nobody noticed until I asked where is the dashcam. So I got it for $38.5k instead of $39k.
Also, the finance guys agreed to lower the money factor to the amount that TFS was offering: 0.00325. Shouldn’t make a difference with immediate payoff, but it’s one less thing to worry about.
I am happy with the deal, $5k over MSRP: $1k port option pkg + $2k dealer package + $2k dealer markup. It seems that most cars in my Gulf State area have a $1k+ port package, and most dealers here have mandatory $2k packages. Maybe I could have avoided some or all of that by shipping from another region for $1k but I never found that deal. I have been looking for a month with deposits at 5 dealers, and this was the first one I found. There are only 10 or so unaccounted Prius Primes in all of Texas at any given moment.
Also, ratefindr showed the $4500 lease incentive expiring around the end of this month for gulf states. Toyota will probably renew it, and other regions show it not ending until December, but a $4500 bird in hand has value.
awesome deal, enjoy your car!
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Your salesperson appreciates you making their mortgage and car payments this month. 
Enjoy.
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Btw how did you negotiate down the moneyfactor? Looking into leasing the same car.
I showed the dealer a printout from ratefindr with the TFS money factor, and that was enough for them. I had texted the salesman the night before saying that there were some lease details that needed to be worked out.
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