That’s crazy. Not just tax part but also all the extra steps you had to go through.
In MA, Audi collected sales tax from me on top of residual and sent me title few weeks after. I just had to go to DMV to register the car as usual. TX seems more complicated. MA yearly excise tax wasn’t fun though haha.
Good luck OP, let us know how it goes. Remember there was a tax office that interpreted the law your way (link in my comment above) at least once. It will be an interesting data point.
The TFS rep made it sound like I would get the title in the mail, but who knows…
Depends on if you got a paper title or e-title.
Most titles these days are e-titles, which means you will get a notification of a payoff letter from TFS. You take that letter to your local county tax office to get a new title issued in your name, minus the lien.
https://www.txdmv.gov/motorists/buying-or-selling-a-vehicle/add-remove-lien
Its actually the same here too, the only difference being you do it twice.
How i have seen TX work is like this:
Transaction 1: You lease the car.
Lien holder is the lessor (Ally, TFS etc.) and you are the lessee.
The dealer acts as the licensed broker and collects taxes due (in TX its the full Purchase price of the car - So 6.25% of final selling price (incentives are untaxed)
Transaction 2: You buyout the lease
The lien holder sends you a confirmation of payoff
They send TX DMV an e-title
You walk in to the tax office to get a new title (after removing the lien holder)
Now there is only one entity - YOU ! so no lessor and lessee (or bank and customer)
How the TX County tax office works is unique - They do have a tie in to the DMV network but they do their own calculations on taxes owed (there is also another weird rule in texas that cars are considered as a “property” and property tax is due) - Refer to my post on that here: GM Financial - Lease Transfer - TX - Do i owe property tax?
Its a clusterfuck i tell ya!!
So to all poor bastards who lease in TX - Good luck!
OP will pay the tax on the buyout amount at the tax office. I’m in TX
I’m frustrated at the OP, because as long as people are willing to get robbed in broad daylight, dealers will keep pulling this stuff and we wont see deals. This dealership will now expect to find more suckers to pay 15% markups on mass production cars rather than give it to someone whos ready and willing to pay MSRP today.
Then we wonder why $20k cars are leasing for $500/month. They’d rather sell 25% of the cars, but make $5k markup as pure profit on suckers like the OP.
Nothing personal, but you got robbed, and youre contributing to this market.
I’d like to see the full document and some context. We really don’t know the posters story.
Counterpoint: The people who cover dealer overhead by paying more than market value are the ones that enable the below-market deals. Another analogy is credit cards: The people who carry balances at ridiculous rates are the ones who fund the cashback, miles, and other perks for those of us who don’t carry balances.
And I’m honestly not convinced my deal was that much over local market value. The dealer originally asked $10k+ over MSRP, I came back with $4k over MSRP, and got the dealer down to $6k over. We stayed at that impasse for 5 days, with the dealer unwilling to sell it for $4k over. I upped my offer to $5k over after the 5 days, and that got the deal done.
Also, some people would consider the port package ($1k for OEM matts, polish, seat spray, USB cords) to be part of the MSRP which would mean I only paid $3.5k over. And I did benefit to the tune of a few hundred bucks from the dealer package of tints, wheel locks, etc.
No one would consider that part of the msrp.
The BS port packages seem to be a Gulf State Toyota thing; I’m not sure you can even buy a Toyota around here without them; all ten of the Primes within 500 miles of me had that port package. Certainly there is much more profit to be negotiated away in that package versus the base MSRP, but it is unavoidable out here.
Just because the dealer wanted a 33 percent markup and you agreed at 18 percent doesn’t mean it was a “deal”. You could have found it for MSRP if you searched around, but I do agree to an extent that for everyone who overpays someone will underpay, but lately they use your type of transactions and get very ballsy.
As for 1k for a USB cord, rubber mats and wax, that’s a rip off. Rubber mats are $300 oem. A usb cord is $5 on Amazon. Wax on a new car? If they don’t detail you car before selling what is the new standard? You show up with a dirty car waiting brand new?
You got ripped off but as long as you’re OK with it and you like the car that’s all that matters. The new Prius is definitely sharp
Just keep in mind when you pay above MSRP you will never see that money back. Trading or selling is not going to a count that you overpaid for a car. Sharp car but no way in hell are any of these mass production cars worth 33 percent markups on MSRP. Thats just a shady stealership
Yes. It seems he wouldn’t touch Texas with a ten foot pole because of the tax uncertainty.
My dealer won’t lease there….
The tax for Texas is very simple.
In the absence of lender tax credits it’s 6.25% upfront of the sales price less rebates.
Need extreme luck or extreme patience for MSRP, market is definitely over MSRP on these
This is not true. Merchants who swipe your card pay a percentage of the sale to the credit card company. It varies based on the type of card & the reward program. That’s where the cash back, miles, & other perks come from.
OP, how did it go? paid off yet?