palidino

I am in ontario canada

I am looking to lease a IS and put about $5000 down. But the dealer is taxing my down payment? What gives?

azmojo

Are you talking about a down payment or a deposit?

Tax is levied on the purchase price at time of purchase. When putting down a deposit you aren't buying anything. There is no tax for reserving something.

While you may intend to put $5000 toward the car and finance the rest, you should try to put down as little deposit as they will allow. $1000 should usually suffice.

LSIII

The taxable amount is the amount after trade-in, dealer discounts, and manufacturer incentives, but before down payment. The amount financed/leased is the amount after, trade-in, dealer discounts, manufacturer incentives, taxes, title/license fees, and down payment.

I agree with what azmojo said, that when you lease put little down. I never put more than first months payment on a lease. All you are doing is prepaying your lease and if that car gets totaled or stolen and not recovered, then you lose out on all that money you put down. Better to put that cash in savings and let it build interest and you will come out ahead in the long run. Large down payments are beneficial if you are financing.

r0shiro

iTrader: (1)

Agreed....put as little down on a lease as possible. I always drive out with no money down and no first month's payment on my leases. =)