I’m new here. I lurked on Incognito mode for awhile and utilized the thread of where to sell my current vehicle to get a lot of different quotes. [Selling my 2018 Honda Odyssey tomorrow] Then I finally created an account and now I can write my first post.
Completely new to leasing and trying to absorb as much knowledge as I can. So, thank y’all so much for your insight and expertise. I really appreciate it. But, I feel like I need some validation.
It’s my understanding that in Texas you pay taxes based on the full value of the vehicle, not just the “portion” you’re leasing. (Which feels like it discourages leasing) So if you’re going to lease… it seems like it makes the most sense to have a longer lease (36 months) versus a shorter one (24 months) simply for that reason. Frankly, it made me question leasing in the first place. But, I feel like the benefits of leasing make more sense for my family (and our finances) than buying a new vehicle again.
Am I missing something? Is there something that mitigates the full tax “penalty” here in Texas that I can’t see?
Sales tax credit, sometimes the bank will give you credit to pay the sales tax. You may only need to pay 1% - 1.5% of tax depending on the bank. This usually only give to EV or they want to move some vehicle off the lot.
Lease really sucks in Texas because you need to pay the full sales tax and you need to pay property taxes for the vehicle lol. AND if you move to another state, the sales tax you paid will not be recognized in some states. AND if you decide to buy the vehicle you need to pay sales tax on the RV again
BMW has something called owner’s choice which is a balloon loan that ofc mitigates all of these.
You are going to pay sales tax on full price of vehicle either way inTexas unless you can find a vehicle offering the tax credits. Brokers here can help you do that. Lease or buy really comes down to how long you expect to keep the vehicle and your monthly budget. You should consider deals that offer low cost financing and compare them to leasing. I am seeing some manufacturers offering 0% financing again. Also, with financing you don’t pay the acquisition fee that adds $500 - $1000 to the cost of the vehicle. Use the lease vs buy calculator here to help decide. Most brokers here can handle both leases and finances.
The benefits depend on the price of each alternative. It’s easiest to grasp through the lens of two consecutive leases vs 60-72m financing:
A hacked lease: I could finance and make 36 x 2 lease payments and still be underwater… an unhacked lease I could be leaving many thousands of dollars on the table by not buying instead
The vehicle profile is small to mid-sized SUV. Could do large sedan or larger SUV for a good deal. Enough space for a family of 4, but not much extra. Good gas mileage and reliability are more important than style or luxury.
For me, the biggest factor in that calculation is that 6 years of one car is a significant risk for a large repair bill or ever-increasing maintenance costs than leasing 2 new cars under warranty.
Flexibility is good so that you can maybe look for models that may offer a sales tax credit. What is the budget? That can help us lead you down the right path.
Not to be a Debbie Downer, but I don’t think your budget is realistic.
Check out @IAC for their TX Honda deals. That’s about the only route I can think of that may get you in the ballpark of your budget. They have been advertising some good Honda deals.
Also, don’t wait until after the first of the year. January historically is the worst time to lease. November and December are “typically” your best months to lease.
Thank you. I appreciate the honesty and help. Been in touch with @IAC and what they have seemed quite good.
EDIT: I was totally wrong about @IAC_Nick ‘s communication and misunderstood our conversation. My bad! I didn’t want to misrepresent him, so I deleted that part of this post.
I think knowing what vehicle you’re considering and the budget you have in mind might help people give more specific advice. Leasing can make sense or not depending on the model and incentives available.
The sales tax credit is probably the only way you’ll get to your budget, and I remember their TX Honda post with some pretty low numbers. The vehicle has to come from a TX dealer to get the sales tax credit. So, shipping from out of state really isn’t an option for you.
Your best asset in your search is patience. I went almost a month without a vehicle before leasing my 2024 Lightning last Christmas, found a broker offering a deal on this site.
Leased my 2024 Lightning XLT for $299.96/mo, 7500/24, 1st pmt only at signing, $500 broker fee, paid $375 to have it delivered to the Austin area from the south side of Houston rather than drive down there Christmas week. MSRP $65,590. Showed up at my front door at 5PM on Christmas Eve, Merry Christmas to me.
Could have gotten 10K on the lease for $326, probably should have done it because I love this truck.
On the flip side, I’m not sure that now I could wait this long without a vehicle to wait for a good deal, because since then I’ve had to go back to the office 5 days a week.
not loving the info about leasing in TX