Called the automated dealer buyout line today for my leased Acura MDX. Chose the dealer option to make sure I was getting a dealer buyout quote, as opposed to mine as the lessee.
I was given the buyout number, which matched exactly what my buyout number is as the lessee, but then it said “this amount is inclusive of the sales tax on the remaining lease payments.”
I’m confused on a few things:
when buying out a lease, no matter how early in the lease, are you paying sales tax for the life of the lease? I am in PA and I pay sales tax on the monthly payment.
will the dealer’s buyout ultimately be less than quoted, ie, will they have to pay the amount that is “inclusive of the sales tax on the remaining lease payments”?
why would I as the lessee, not be paying sales tax on the full buyout price and not just the remaining lease payments according to the buyout quote in my AFS account?
You said you are paying monthly sales tax, so when you want to buy your leased vehicle let’s say your purchased price was $30,000, residual at the end of the lease is $18,000. For example you are not yet finished on the lease and the amount still owed or buyout is $24,000. When you buy the vehicle you pay Acura Financial $24,000, they will send you the title, you go to your local DMV and inititate the transfer, DMV will calculate the sales tax based on the $24,000 payment you made on Acura.
You pay for the whole value of the vehicle when you buy it out, not the remainder of the lease value or payments remaining.
I understand the leasing process, but maybe not 100% like I thought. What I am asking is:
If I buyout the lease in month 30 of a 36 month lease, is AFS charging me the monthly sales tax for all 36 months in that buyout number (9% per month)? I understand that the buyout number will then be subject to PA Sales tax (6%)
Are they moving up 6 remaining months of monthly lease tax into that buyout amount?
I have no idea if this applies here, but often payoff amounts of various types (home mortgages, auto loans, etc) will be padded to account for unanticipated delays or additional charges (for example, you mail a payoff check that USPS takes 19 days to deliver).
Whatever is over-collected is then refunded when the transaction is final and the account is closed out.
Tax is tax, you’ll pay it on the remaining payments, and the residual. Your buyout should be the remaining payments(which include tax) plus the residual, plus tax on the residual. Might save some rent charge on those last payments if you buy it out early.
So even though in PA tax is charged on the monthly payment, I would have to pay tax on monthly payments in advance even though I have ended the lease with the buyout?
