Replacing 2017 RX350 with a 2022 - Deal Check & Out of State Tax question

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I currently have a 2017 RX350 F-Sport that I did fairly well on (+61k MSRP, $602 mo, put 0 down, had $500 neg equity from previous vehicle). I have extended it twice and am WAY under the mileage limit. The car has maybe 28k miles, with a 48k allowance. I love the car; overall, it’s been a 4 year honeymoon (except for the infotainment system…I really dislike it).

We prefer leasing the family car so that we always have the latest safety features, warranty, our needs have changed a lot since the kiddo came along, etc. I don’t want to give up any of the options my current RX has. After looking at the market over the past year, I had pretty much talked myself into buying the 2017 and given up on leasing a newer one.

Then along came the '21 and 22’s in Grecian blue, with Apple CarPlay, stronger chassis for a newer IIHS crash test, and the realization that my car has a lot of equity in it.

I’ve been working with Nalley in Smyrna and the gentleman I have worked with has been a nice change from the way other dealers have treated me. They have exactly what I want, but around here, it doesn’t seem like they are coming off of MSRP at all. After going back and forth a couple times, this is their best and final offer:

2017 RX-350 F Sport
Payoff: 27,879.16
Nalley Trade offer: 39,000
Carmax online quote: 40,400

2022 RX F-Sport Handling
MSRP/Sale Price: 61,820.00
Tint: 202.00
Rebates/Discounts: 3,500.00 (Lease offer, Military, Lease Loyalty certificate)
Sales Price Sub-Total: 58,522.00
Trade Allowance: 39,000.00
Trade Difference: 19,522.00
Tax: 725.08
Tag and Title Fees: 126.00
Dealer Service Charge: 599.00
Net Price: 21,767.08
Trade Payoff: 27,879.16
Balance Forward: 49,646.24

36/12k is $621 mo
39/12k is $589 mo
0 down, no MSD’s

I am an Alabama resident and will register the car in Alabama. We have a 2% usage tax on the monthly lease payment. I asked about the $725.08 tax charge and was told they are using some sort of program or service that should be pretty accurate. (I can’t remember his exact words now.) Shouldn’t that $725.08 be taken off and just add the usual 2% usage tax to the monthly payment?

I know the MF is marked up. They aren’t coming off of that either. Buy rate is .00145 with a res of 59%. From what I can tell, their MF is around .00178. However, I can’t get the numbers to work out quite right. I think that’s at least partly due to the tax issue.

I’m not entirely opposed to buying vs leasing, especially given the weird bubble that has developed. But if I’m likely to want something bigger in 3 years, I don’t know if that will be cost effective?
Purchasing through Lexus at 1.9% for 60 would be $877.
Purchasing through Lexus at 2.49% for 72 would be $741.

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whats your monthly lease payment coming to ?
If not a big difference between leasing and buying number I will buy in this mkt.

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Duh, just realized I forgot to add that. Sorry, I’ve been staring at this stuff too long today.
0 down, no MSD’s
36/12 is 621
39/12 is 589

Purchasing through Lexus at 1.9% for 60 would be $877.
Purchasing through Lexus at 2.49% for 72 would be $741.

Other info I forgot: my lease is up at the end of December and Lexus dealers around here aren’t taking orders at all.

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My numbers when plugging in show about 2500-2700 is getting eaten up somewhere. This is also no discount on the car which I think you can pull even a small discount and stack incentives by contacting others.
I’m also not a fan of rolling in the 11k of equity you have into a new lease in the event something happens that money is gone. Make the sale of the vehicle and purchase of new two seperate transactions. I would shop your current a little more and max out top dollar.

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Are you allowed to sell to carmax.

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A. If you’re going to monetize your equity, treat that as cold hard-earned cash just like any other money in your checking account.

B. Then start your new vehicle search from a blank sheet of paper.

You’ve gotten ahead of yourself into thinking A requires getting into a new RX as opposed to any other vehicle on the market.

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That is not the right way to think about it. Lease payments and financing payments cannot be directly compared.

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Also, double check what Carvana (and any other car buyers that might operate in your area such as Autonation or Vroom?) to see what they are offering you on their buyout.

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@JD81 Thank you so much for pointing out that we lose everything if something happens to the lease. This is all came out of nowhere and is happening faster than I expected. My gut feeling was “don’t roll equity in to a lease”, but I think I was a little overwhelmed with everything. I also feel like money is getting snarfed up somewhere. I’m pretty sure the Lexus loyalty should still be applied if I buy and finance through LFS; which is contrary to what the sales manager said.

@jwws9999, @thejr91, I don’t think I am allowed to sell to third parties. I only got that quote as a general check and to use for negotiating.

@max_g, I actually am pretty set on the RX. I have some hip issues and I don’t really have the time or energy now to go through another search to find something that works. The next closest in comfort last time I looked was the X5 or the Tahoe. But the RX and X5 were much more fun to drive.
I do kind of agree about not directly comparing lease and purchase payments. But I am trying to consider what I will spend over a three year period vs what I will still owe in both scenarios.

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You’re not selling the car per se, since you don’t own it.

You are selling your right to retain possession until the end of the lease. Without your consent the third party cannot buy the car from the bank.

Always maximize your equity, especially now with massive swings from one buyer to another. Get online quotes from them all.

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Double-check lease vs finance incentives, and what you qualify for. They aren’t usually the same.
Example: finance may have a 0.9% offer for 60 months, but leases give $1k loyalty.

If you’ve verified this, then :+1:

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@max_g true, but most of what I have read indicated that Lexus isn’t allowing you to sell your lease to a third party anymore. I’ll call LFS tomorrow to verify though.

@Kctham18 thanks! I have checked this already but I always appreciate reminders. It’s so easy to miss things.
Lexus is offering the 1.9% for 60 or 2.49% for 72 mo. I’ll lose the $1500 Lease Cash, but keep the military and loyalty bonuses.
USAA has a better 2.09% for 72 months, which would help, but then I lose the $1000 loyalty. :woman_shrugging:
We will be top tier credit wise but I haven’t found any rates lower elsewhere.

I thought this was the only car anywhere near me that has everything I want. However, I found another one last night. I hate to be a jerk and play hard ball when the sales manager has been very respectful to me. (I know that sounds silly. But I sound really young, especially on the phone. So I get treated like kid who is wasting their time pretty often.) But money is money and they haven’t had the same reservations about marking up MF, no budging on price, etc. I have put a deposit down but was told multiple times it was refundable.

If they can’t/won’t come down any more, maybe it’s time to walk away. I can still buy my car out at the end of December and be happy.

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Before you do anything, research and test drive a Hyundai Palisade, then crunch those numbers. My son (with new baby and large dog) has one. Fantastic SUV and best value out there. !!

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Wow…just wow. Thank you for all of the help and advice everyone but it’s a moot point now because Nalley Lexus of Roswell doesn’t honor deposits on cars and they won’t allow you the time to review a deal, even with said deposit in their possession.
I just got a text message that they would be refunding my deposit and that the RX was sold.

I spoke to the sales manager this morning and explained that my husband and I couldn’t really come to an agreement on what to do (Lease vs. buy) and that we were likely going to just buy my current one instead. The sales manager and I talked a fair bit. He made me three different counter offers (one with a lower monthly payment, two that were higher but with cash back from the equity). I explained to him that my daughter was homeschooled and I would look at everything once we were done and not to worry if it was a while before I got back to him. I didn’t push for my deposit back because, obviously, I wanted to review the counter offers.

I have expressed my disappointment that they sold a car I had money down on via text. But I almost want to call and ask just what was the point of the deposit and is this how they generally conduct business?

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In response to your statement about playing hardball even though the manager has been respectful, you shouldn’t give it a second thought. They only care about one thing, taking as much money as they can from you. You should only care about keeping as much of your money as possible.

The tax implications could be fairly large depending on the rules in your state. Having the dealer buy out your lease could save you on being taxed on ~$40,000.

This stuck out to me “they won’t allow you the time to review a deal”. Huh? They want you to sign the dotted line without being able to see anything above it?

Either way, don’t bother calling about their deposit practices. If there is one thing I’ve learned in all my leasing it’s that when a dealer seems to be doing shady things it’s time to go elsewhere.

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Well said to your entire post, especially this part!! I did call back several times and was able to get ahold of the sales manager I had been dealing with. Towards the end of the conversation he said that he had a feeling we would be talking again. I doubt it. I certainly won’t be initiating any future dealings with them.

I do think this decision came from the General Manager and/or someone higher up the food chain than the person I worked with. So I’m leaving his name out of it as much as I can. I genuinely think this was done against his wishes.

But it was still an incredibly poor business practice. I’ve already filed a complaint with Lexus corporate and left a message with Asbury Automotive’s customer service department (the group that owns Nalley Roswell).

I did find another dealer with an identical RX, but I haven’t decided if I will bother with it or not yet. Maybe I’ll wait to see what things look like in December, or sit tight and wait to see if the 23’s are enticing.

Also, as @max_g wisely pointed out, I shouldn’t automatically default to getting the same car again. Starting the search from square just wasn’t something I have the time and energy for right now. I only looked into this at all because of the new color and the discovery of the equity in my current lease.

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Lesson learned. Never trust the “smile and handshake” at an auto dealer. You are only as important as your money. Someone walked in with cash to spend and you got bumped. Perhaps a blessing. Now… Test drive that Palisade and thank me later :wink: How Car Seat Friendly is the 2021 Hyundai Palisade SE? | CAR MOM TOUR - YouTube

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After watching the YouTube Video I got a headache.

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Thanks! When I get ready to look at cars again, I’ll definitely check those out! I have a friend who has offered to let us use their Hyundai family and friends discount before (Hyundai has a manufacturing plant near where we live).

Thankfully, we’re past the car seat stage and into the high back booster phase!

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I’m curious about that! I said as much to the guy and he said no, that he would much rather have gone with my deal and my trade. Supposedly, this was a financing deal and not signed/sealed/delivered when I talked to the sales manager again this evening. The car is currently still listed on their website too.

It’ll be interesting to see if it’s still there tomorrow evening. :wink: It will be ironic if the other person wasn’t approved, especially since I was leaning heavily towards accepting one of their counteroffers.