Truth about infamous "1% rule"

There is no consensus on what it should be, so let’s see what majority of experts think about it.
Besides, we never had any polls before :slight_smile:

Some notes: everyone knows that tax is calculated differently, as well as taxation of incentives, etc. So it will never be Granny Smith apples vs. Granny Smith apples, but will still be apples vs. apples, IMO
Also - we agree on $0 down (CCR)

1% should be…

  • All in - absolute $0 due at signing
  • Only Tax in - everything else due at signing
  • Nothing in - tax & everything else due at signing
  • Any partial combination (ex: dealer fees + taxes; acquisition fees + dealer fee; etc.) - balance due at signing
  • Shouldn’t be - it’s a fiction

0 voters

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As of 13:54 EDT,
63% are democrats - expect everything to be taken care of by some magic “rule” they heard of
13% are republicans - expect everything to be paid for out of pocket
12% are libertarian, they believe in no govt taxes
12% are kids since they still believe in fiction
and 0% are green party since the answer always depends …


Kids believe that fiction is real :slight_smile:

For majority (aka “Democrats” according to vhooloo) - how in the world “1% rule” can be all inclusive for different people? :slight_smile:
Take NY vs. VA:

  • dealer fees: limited to $75 vs. unlimited, $699 is a norm
  • sales tax: rental portion vs. selling price
  • difference in payments: from $40 and up

Not included in the lease, but VA also has property tax which could be $2K+ (on a $60K) car for the first year, which translates to extra $170-200/mo and will be lower for years 2-3.

Explained our political thought process very well. I still vote 1% all rolled in or at least the taxes at a minimum. As a republican leaning i do love me just the right amount of taxes, but not too much.

Don’t see your vote. Pick one, even if your candidate is not there. Just like in real life :slight_smile:

See as i said i am open minded and voted with the other side of the aisle. May what has been achieved here resonate through the halls of congress.

Keep voting, folks. Every voice counts! :slight_smile:

unless you’re a democrat in California who doesn’t believe in the electoral carage :stuck_out_tongue_winking_eye:

Though it seems we have a overwhelming majority right now. Other letters better step up their campaigns

Yeah, luckily we don’t have electoral college here, so majority rules. Even when you disagree with it :slight_smile:

“There is no disagreement that cannot be overcome in 140 chars”
“I will only accept the result of this poll if I win”

You would just have to accept that it will be harder to get as good of a deal in some circumstances. Just like people often post about how it will be harder in VA and TX due to taxes, or FL due to high fees and unwillingness to negotiate.

When do you pay that? We also have personal property tax in MO, but it’s not due until December 31st in the second year after registering it. In that instance, I wouldn’t consider it part of the lease.

It’s not “harder” when comparing deals from different states - it’s comparing apples to oranges, even on the same car. And in this case, to make it a fair comparison, only option “Nothing in” would make sense.
It is harder to hit 1% on some cars, period. And we need to accept that.

Same year the car was registered - in October. And every year after that, but it goes down with the car’s value.

To be useful rule of thumb there has to be validity and reliability in measurement:

By valid I mean it adequately captures the underlying phenomenon. In this case that would mean the lowest total out of pocket expense for the most car which suggests including things like tax and doc fees which can vary quite wildly across state lines.

However, in practice we are only really interested in how well someone is able to negotiate/game the actual moving parts of a lease. Since no one can negotiate sales taxes I say we should only consider pre-tax deals with the understanding that the measures captures the ability to find/negotiate great lease deals irrespective of the tax policy environment. you could make a similar argument regarding doc fees.

by validity it means that you measure the thin and I measure the thing we both get the same answer. For that reason if some people are posting deals with tax included and others are posting deals without tax then two people may come to two very different measures of the quality of the lease. So to keep comparisons consistent I say no tax

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If you continue to say the leasehakr score is as defined:

“The number of years it would take for the accumulated average monthly payments to exceed the MSRP. The higher the score, the better it is to lease as opposed to buy”. This is just another way of saying the 1% rule is a rule of thumb, since 1% of MSRP is 8.33 year score (100%/12 months = 8.33 years).

Then you must account for the tax somehow, because every lease payment includes tax unless you are in a state like VA that taxes the “sale” amount and you prepay it, but then it is not a true $0.00 down lease.

In VA, property tax can be strange. In some counties, you pay it based on what you owned on Jan 1. So if you turn your lease in on 12/31, you pay no pp tax for the next year. Some counties prorate so you pay your share every year no if you bought or leased in June, you would pay 1/2 of the years charge. In theory, you could buy a car on 1/2/17, sell it before 1/1/18, and pay no pp tax ever in a county that does not prorate. Taxes are paid in some places on 6/5 and 12/5. Some places you pay the whole year on 12/5.

Good talk, good talk…


Not sure what you mean by “prepay”? You can still roll full tax into cap cost.

Yes, I meant to say your lease payment would include tax in VA unless you decided to prepay it and not have it included in your lease payment.

I guess the 1% rule should also consider the MSRP purchase price plus taxes and fees less purchase incentives, lol. This is impossible to consider an exact science!

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That’s why I voted for “fiction” :slight_smile: But the closest would probably be “partial” - only acquisition and license/registration (it differs, but still) rolled in. Then 1% can be considered universal.

What about maintenance? Should that be included? Some leases include free maintenance, while others others require very expensive maintenance programs.

Considering taxes and fees, etc as they vary by state and region, I have to believe manufacturers understand this to some degree and try to offset them by offering regional incentives, regional MFs and RVs to come up with payments that regional people in that market are comfortable with. Any thoughts on that?