Here is the link to my calculator
I don’t fully understand Toyota One Pay lease but I’m trying to use it to reduce the amount of taxes that must be paid in TX.
Questions:
Thank you for the help in understanding this!
Is the lender offering sales tax credits?
Not that I am aware of. Lender is TFS.
Then what sales tax savings are you referencing by utilizing a one pay lease?
Texas charges for the purchase price and then again for the buyout price. My understanding is that by doing the One Pay Lease I can lower the buyout price and therefore lower the amount of tax paid the second time.
On a normal lease, I believe the buyout price for an immediate buyout will be higher and I will end up paying tax on that entire amount.
AFAIK this is generally true but someone here who bought out their lease within 1-2 months paid tax on book value or some other metric that Texas uses when a car is being bought for seemingly less than market value.
Thanks
Maybe forget I said anything about taxes. Can someone please answer the questions I posed
Thanks!
B/c of TX’s unusual taxation situation, an answer that disregards the taxes may not be particularly accurate?
For answer number 2, the buyout amount only equals the RV at the end of the lease. It otherwise is RV + remaining lease payments. If you are doing a one pay, I assume the buyout at any point would be the RV since there are no remaining lease payments?
This must be some model with a tax credit passed as an incentive? Which 
are we targetting?
How much of that are you netting if you pay inception/disposition/rent charge for 2 months (you don’t want a 1 pay with immediate buyout you want standard lease with MSD), and double sales tax?
The question of whether TFS subtracts unearned rent is irrelevant to taxes. That’s the question I’m looking for a definitive answer on. By doing One Pay, you pay $6 or 8K in rent charges upfront, depending on the term and so forth. With an immediate buy out, are those unearned rent charges taken off of the payout amount.
Is there unearned rent charge on a one pay?
Perhaps @Ryan_S may know the answer. In theory it sounds like yes, you would avoid the tax on that $6,000 - $8,000.
At this point you’ve also clearly avoided telling us the vehicle you are targeting which makes it harder ti gauge context and potentially help.
When you lease your payoff is made up of your residual + all unpaid payments. Inside of those payments is the rent charge.
Right.
In a one pay, since there are no unpaid payments, there is also no rent charge, correct?
One payment does include a rent charge unless the MF or reduced one pay MF is .00001
Sorry, should’ve written my question better. W/ a one pay, the entirety of rent charge is paid upfront, so there is no unearned rent charge, correct?
All the rent except for the first month is unearned because you didn’t rent the car during the last 35 (or how every many) months.
Texas sometimes uses what is called “presumptive value” to determine value of a vehicle. Therefore, basing the 6.26% sales tax on that number. The 2 times I bought used vehicles from out of state (within the last 8 years), “presumptive value” is the figure the tax office used. In both situations it was good for me. A '99 Pontiac Trans Am and a '05 BMW M3 have fairly low book values. So, I paid very little tax on those vehicles. I don’t even know if the tax office even looks at the bill of sale anymore. There was a lot of fraud with people writing bills of sale with very low sales amounts to try to lower the tax. That’s why TX switched to this “presumptive value” metric.
I didn’t avoid it, it just wasn’t relevant. It’s a RAV4 Prime. Everyone is just getting way off topic on the original question which was/is, will TFS subtract out the unpaid rent on a OnePay lease with immediate buyout, just like they do on a normal lease?
Disclaimer: I haven’t leased b/f, but how is a “one pay” actually only one payment, if there are unearned rent charges? Aside from a reduced MF, isn’t the point of a one pay that there are NO unpaid or unearned charges (rent or otherwise), period?