rxqd

if say i started a lease on a is250, then a couple month later i wanted to buy it instead, do i lose anything in the process of this conversion or will everything i've paid during the lease go into the buy?

gmanusmc

If you are considering buying it out that soon, you should probably just buy in the beginning. There is a $700 fee to start a Lexus lease so unless there is an incentive in place that would eliminate that, you lose $700 right up front.

Other than that, the buyout would be approx the residual + remaining payments less any interest refund. Also, unless you pay all the sales tax up front, you'd probably be required to pay that when buying the lease out.

FastTags

$700 you mean the aqusition fee? I thought it was $500 anyway you dont loose much, lease is like a buy, bank wants the money either now or later, you will have a 10day payoff balance and thats it, you can either refinance or just payoff

gmanusmc

Uh yes - the acquisition fee - and yes you lose $700, because if you buy the car conventionally, there is no acquisition fee. To answer your other thought, the acquisition fee for a Lexus Financial Services lease is 700, not 500. As you say, in some ways, leases are similar to buying, but one big difference is the acquisition fee - almost all leases have them.

How is the sales tax on a lease handled for you folks in tx? If it's not all paid up front, you'll probably have to add any remaining sales tax owed to that 10 day payoff you referred to.

FastTags

The sales tax in TX is upfront, but when you buy the car off you must pay tax AGAIN, its called double tax. In Texas, the leased car is owned by a BANK, and the bank has its name on the title until the car is paid off, so when you decide to payoff the car, the bank must do a transfer of title, every time you transfer a title you must pay sale TAX, so that is why in TEXAS we pay tax again.

The good thing is that in Housotn at least, most dealerships have whats called TAX POOL which allows car buyers pay only 1-2% TAX instead of 6.25%

Vehicle-Pool LIFO Method Could Cut Taxes

this http://www.larsonallen.com/Dealershi...Cut_Taxes.aspx

http://www.google.com/url?sa=t&rct=j...aOwtXtSzEcyjMA

Joeb427

iTrader: (1)

Wow!
That's awful!
Bad enough paying tax on the whole value of the vehicle with a lease but again if purchasing....

In NJ we pay tax on just the payment and the residual if the vehicle is bought post lease.

However,NJ property tax is one the highest in the nation.
I'd rather be double vehicles sales taxed.

FastTags

yes, I know. But I never buy the car at the end, plus having a TAX pool is great. I bought GS and only paid $350 TAX,and bought my wife accord and only paid $400 Tax,

Joeb427

iTrader: (1)

Do you pay like some states a % value of the vehicle yearly for registration?
In Jersey,plates are about $85 a year.

FastTags

yes, registration fee, its lees though then in NY

gmanusmc

Well if that's the case, your statement that he wouldn't lose much buying out the lease so soon after leasing is somewhat of a head scratcher. It seems if that's the way vehicle sales tax is handled in TX, if you just buy the car to begin with, you would escape that second taxation on a lease buyout. It's crazy that they tax people that way.

FastTags

yes and no. ofcourse you loose some on the finance, as far as the tax go it is questionable, like I said in other threads, in Houston dealers have what called TAX POOL, which allows folks pay initially as low as 1% sales tax on a lease and on the buy. So, IF you end up paying TAX when you buy off the car, it is only partial on the payoff amount, not as significant as paying FULL TAX on the purchase.

aritweets

Wait until the lease is almost over

When you are leasing your interest rate is practically nothing, so lower the principal of the car then finance towards the end of the lease, say 28/30k instead of right off the bat of a fresh lease at 36/38k

mcomer

I agree with aritweets, keep it leased until near the maturity date. "penalty for early withdrawal" with no
major advantages, ie. insurance remains the same. Near the end you hold all the cards, research whether
it is worth more than the buy out, longer "test drive" period and evaluate if the 2017 model doesn't appeal!

lexi90

So true! Wait until maturity. Right now, it's not a good time.