Chronic Car Buyers Anonymous (Archived)

oldfarmer50

corvette said:

oldfarmer50 said:

We’ve been delivering a few old generation Dodge minivans...

Those are also on the short list for a temporary beater if I don't have a Maverick by August (or know it will come very soon) and decide to wait for it... I'm not paying $20k for one, though.

Then you might have to buy a bicycle. I’m guessing some of the vehicles we deliver are sold before we deliver them.

This might be one of ours.

https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=622058933&allListingType=all-cars&zip=12201&makeCodeList=DODGE&modelCodeList=GRANDCARAV&state=NY&city=Albany&dma=&searchRadius=50&isNewSearch=false&referrer=/cars-for-sale/all-cars?zip=12201&makeCodeList=DODGE&modelCodeList=GRANDCARAV&clickType=listing

graphicguy

nyccarguy said:

Yes I was honest when I filled out the online information. Disclosed the accident and the cost of repair.

Picked up the Highlander tonight. No drama. F&I guy tried to sell $995 GAP insurance, a $1,200 maintenance package, & a $2,600 Toyota Platinum Warranty. I respectfully declined.

It’s been 2 years, 5 months, & 1 week since my last punch. Pics or the punch didn’t happen, right?

My name is Bradd. I am a Chronic Car Buyer.

WTG, Bradd! Love it. Plus, it’s red. Ymmmmmmmmyyyyyy!

nyccarguy

Good morning everyone! Thanks so much everybody for the positive comments! I do appreciate them. The Ruby Flare Metallic makes a very common SUV stand out and really look sharp.

@qbrozen - Black Guts. For me, it is just easier to keep clean. You will all be happy to know that the 4xe that we ordered for my wife has the Saddle interior. Superb job with the TRX!

@stickguy - The guy has a GALVES app. He plugged in the VIN and the mileage. Before he inputted the hit on the carfax, it came back with $30K. I showed him my offers. He said that is all he can offer me right now and I should take advantage of one of the other offers. I'm going to check my schedule for this weekend and see if I can make a run up to CARMAX. For $1000 it seems that it will be worth my time.

kyfdx

Dieselgate

With the checks from Bosch, I cleared about $9700, or so.

I'm pretty sure that @28firefighter cleared approx $11K or so?

ab348

In my experience, black interiors show far more dust, debris, lint and pet hair than lighter interiors. It is the same with black vs. light-colored countertops in a kitchen or bathroom. But if you are working in a grimy or greasy environment and then use the vehicle, I suppose that can flip.

28firefighter

@kyfdx said:
Dieselgate

With the checks from Bosch, I cleared about $9700, or so.

I'm pretty sure that @28firefighter cleared approx $11K or so?

Yep! Just under $23k OTD on my A3. Cleared $34k.

jmonroe1

nyccarguy said:

Good morning everyone! Thanks so much everybody for the positive comments! I do appreciate them. The Ruby Flare Metallic makes a very common SUV stand out and really look sharp.

@qbrozen - Black Guts. For me, it is just easier to keep clean. You will all be happy to know that the 4xe that we ordered for my wife has the Saddle interior. Superb job with the TRX!

@stickguy - The guy has a GALVES app. He plugged in the VIN and the mileage. Before he inputted the hit on the carfax, it came back with $30K. I showed him my offers. He said that is all he can offer me right now and I should take advantage of one of the other offers. I'm going to check my schedule for this weekend and see if I can make a run up to CARMAX. For $1000 it seems that it will be worth my time.

Very nice color and you know I’m not just piling on here because that color, although with a beige interior, is what made me buy Mrs. j’s 2018 Legacy in 2019. No other color would have made me pull the trigger.

Now, not to put a damper on the sale but is a grand more for your old truck enough to offset the sales tax credit (maybe you don’t get that in Connecticut) but in PA you pay sales tax on the difference so selling her 2012 Legacy to Carvana for $2,250 more than the dealer offered made it an easy decision not to trade it in. A grand wouldn’t have worked for me.

Like I said in a previous post, give us a few early reports on your new really good looking Redish beast.

jmonroe

stickguy

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

nyccarguy

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

That's how it works in CT

jmonroe1

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

kyfdx

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

Sales tax is applied to the monthly payment in PA, but the rate is +3% over your local sales tax rate.
There is no sales tax trade-in credit for a lease, in either direction.

qbrozen

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

I think it can vary by dealer, too, although it shouldn't. I've gotten a credit before for anything above the residual, which makes sense since I paid tax on that portion.

kyfdx

qbrozen said:

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

I think it can vary by dealer, too, although it shouldn't. I've gotten a credit before for anything above the residual, which makes sense since I paid tax on that portion.

NJ may be different, as lease sales tax is collected in full, upfront.

jmonroe1

kyfdx said:

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

Sales tax is applied to the monthly payment in PA, but the rate is +3% over your local sales tax rate.
There is no sales tax trade-in credit for a lease, in either direction.

Sales tax in my county (Allegheny) is 7% but it’s 6% in all adjoining counties and lots more too. Somebody’s gotta pay for the stadiums in the Burgh and I’m one of a few million with that pleasure.

Thanks for the info and I still ain’t interested in leasing.

jmonroe

fintail

No state income tax, generally low property tax rates, we make up for it with gas and sales tax.

oldfarmer50 said:

28firefighter said:

I've been convinced that I need to get out of the sandbox of cheap cars.

The big thing is that I need to pay sales tax on whatever I get - which is 10.6% where I live.

10.6%? Yikes!

fintail

But the warranty is a bargain! Congrats

nyccarguy said:

Yes I was honest when I filled out the online information. Disclosed the accident and the cost of repair.

Picked up the Highlander tonight. No drama. F&I guy tried to sell $995 GAP insurance, a $1,200 maintenance package, & a $2,600 Toyota Platinum Warranty. I respectfully declined.

It’s been 2 years, 5 months, & 1 week since my last punch. Pics or the punch didn’t happen, right?

My name is Bradd. I am a Chronic Car Buyer.

sda

jmonroe1 said:

kyfdx said:

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

Sales tax is applied to the monthly payment in PA, but the rate is +3% over your local sales tax rate.
There is no sales tax trade-in credit for a lease, in either direction.

Sales tax in my county (Allegheny) is 7% but it’s 6% in all adjoining counties and lots more too. Somebody’s gotta pay for the stadiums in the Burgh and I’m one of a few million with that pleasure.

Thanks for the info and I still ain’t interested in leasing.

jmonroe

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

qbrozen

sda said:

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

Say what? You have a sales tax cap of $500 on vehicles?

Michaell

qbrozen said:

sda said:

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

Say what? You have a sales tax cap of $500 on vehicles?

Yep.

Was $300 until recently.

jmonroe1

sda said:

jmonroe1 said:

kyfdx said:

jmonroe1 said:

stickguy said:

Usually you don’t get a sales tax credit for trading in a lease. But that probably varies by state.

Yeah, I forgot about leasing since I’ve never leased. To be honest, I don’t know what the tax rules for leasing are in PA but I’m sure they ain’t favorable to leasing. Another reason why you have to cheat when doing your taxes.

jmonroe

Sales tax is applied to the monthly payment in PA, but the rate is +3% over your local sales tax rate.
There is no sales tax trade-in credit for a lease, in either direction.

Sales tax in my county (Allegheny) is 7% but it’s 6% in all adjoining counties and lots more too. Somebody’s gotta pay for the stadiums in the Burgh and I’m one of a few million with that pleasure.

Thanks for the info and I still ain’t interested in leasing.

jmonroe

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

It is 7% of the difference no cap, you just keep paying. PA likes folks with money.

When I lived in SC (‘92 to ‘97) I’m pretty sure the sales tax limit was $350 on cars. Sales tax was 5% on everything even food. Food is still not taxed in PA. If it was we couldn’t afford to eat therefore folks would die and the state would lose money. They ain’t that dumb.

jmonroe

jmonroe1

qbrozen said:

sda said:

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

Say what? You have a sales tax cap of $500 on vehicles?

That’s a very good deal, huh? No reason to cheat with tax rules like that.

jmonroe

breld

Catching up on posts while waiting for a flight to Chicago to visit my son for the weekend. We’re going to see Imagine Dragons tonight in Milwaukee!

Congrats to @nyccarguy on the Highlander. The color definitely makes it stand out and should be a great family hauler!

Well done on the swaps @qbrozen and @28firefighter! Just a little work doing something we enjoy anyway sure comes with profits these days!

I did get a quote from Vroom for the Bronco, just for curiosity’s sake. They quoted right around what we paid, just as @qbrozen had indicated. Funny how buying a car for trade value was an absolute win a year ago and now you’re a loser if you’re not turning a profit!

henryn

Here in Texas you pay 6.25% sales tax on every vehicle you purchase. There is no “cap”, but trade in does reduce the amount, as you are only taxed on the difference. If you get $10,000 for your trade in, you just save $625 in sales tax. For instance the Ford dealer offered me $10k for my old truck, which makes it worth $10,625 on trade in. But Carvana is offering $14,883 for the truck, so that’s a no brainer.

And Texas wants their 6.25% up front on a lease. Ordinarily, the sales tax is rolled into the overall lease, but it’s still there. Which makes leasing much less attractive, and leasing in order to flip takes a really big hit. Let’s take a hypothetical case here. Say you’re looking at a $50k car, which you can lease for $500 a month (plus taxes). The sales tax will run you $3,125. Spread over 36 monthly lease payments, that will add $86.80 per month to your lease payment. Whereas if you only paid sales tax on each monthly payment, that would cost you only $31.25 per month. Big difference.

And if you’re leasing in order to flip, much bigger deal. Your payoff, right from day one, will include the entire $3,125 in sales tax.

Sandman6472

Suffering from vertigo again it seems, passed out in the hallway last Sunday morning and cut my leg, bumped the head & landed on that battery in my back as it's sore to the touch. Was out of work all week as didn't feel safe driving for mine & others safety. Volunteering for this Sunday as am starting to feel better so think another 36 hours should see me well again. Called doctor & am going to have blood tests done as it's the second time since October I've had vertigo, and it really stinks. Told me to take some over the counter meds in the meantime.
Hate being in bed and missing another whole week of my life but what choice did I have? Better to just relax my body till it feels better as it still controls the actions I take.

nyccarguy

I got ALGO to come up to $34K ($33,905 after their admin fee). I'm submitting photos and paperwork tonight.

corvette

Sandy, that stinks. Hope you’re on the mend soon.

jmonroe1

henryn said:

Here in Texas you pay 6.25% sales tax on every vehicle you purchase. There is no “cap”, but trade in does reduce the amount, as you are only taxed on the difference. If you get $10,000 for your trade in, you just save $625 in sales tax. For instance the Ford dealer offered me $10k for my old truck, which makes it worth $10,625 on trade in. But Carvana is offering $14,883 for the truck, so that’s a no brainer.

And Texas wants their 6.25% up front on a lease. Ordinarily, the sales tax is rolled into the overall lease, but it’s still there. Which makes leasing much less attractive, and leasing in order to flip takes a really big hit. Let’s take a hypothetical case here. Say you’re looking at a $50k car, which you can lease for $500 a month (plus taxes). The sales tax will run you $3,125. Spread over 36 monthly lease payments, that will add $86.80 per month to your lease payment. Whereas if you only paid sales tax on each monthly payment, that would cost you only $31.25 per month. Big difference.

And if you’re leasing in order to flip, much bigger deal. Your payoff, right from day one, will include the entire $3,125 in sales tax.

It’s only money or should I say it’s only the difference. It’s tough trying to out bank a bank and even tougher to out bank a state. But, cheating when doing your taxes helps.

jmonroe

Michaell

Sales Tax:

@henryn - some dealers in TX can offer tax credits on a lease that brings the rate down to 1.25%. I've seen it mostly with luxury brands, but it's not consistently available.

In CA, the tax rate is based on the dealer location, so cities are constantly working to entice dealers to relocate to their town, so the city can collect the tax revenue.

In CO, sales tax is assessed on the registration address. As there are city, county, state and other special tax districts (stadium district and public transportation are two in the Denver area), the tax rate can vary wildly.

For example, my house is in an unincorporated part of the county, so my tax rate is 4%, not the 8% the city residents have to pay. It does allow for a trade in credit, so if I were to buy a $50K car with a $20K trade in, I'd only pay 4% of the $30K difference, or $1200.

Too bad I'm not in the market.

jmonroe1

nyccarguy said:

I got ALGO to come up to $34K ($33,905 after their admin fee). I'm submitting photos and paperwork tonight.

That’s good to hear. Do you think a little photo shopping would help. Cheating doesn’t have to apply to only taxes.

Good luck.

jmonroe

stickguy

Good job Bradd. Nice little chunk of cash for your pocket.

rayainsw

Sandy -
"passed out in the hallway last Sunday morning "
Sorry to hear.
Hope you are back to normal soon!
- Ray
Ouch

andres3

oldfarmer50 said:

28firefighter said:

I've been convinced that I need to get out of the sandbox of cheap cars.

The big thing is that I need to pay sales tax on whatever I get - which is 10.6% where I live.

10.6%? Yikes!

I'm sure that 10.6% ensure that potholes are non-existent and when they happen get repaired within 72 hours, and other useful benefits.

andres3

Michaell said:

Sales Tax:

@henryn - some dealers in TX can offer tax credits on a lease that brings the rate down to 1.25%. I've seen it mostly with luxury brands, but it's not consistently available.

In CA, the tax rate is based on the dealer location, so cities are constantly working to entice dealers to relocate to their town, so the city can collect the tax revenue.

In CO, sales tax is assessed on the registration address. As there are city, county, state and other special tax districts (stadium district and public transportation are two in the Denver area), the tax rate can vary wildly.

For example, my house is in an unincorporated part of the county, so my tax rate is 4%, not the 8% the city residents have to pay. It does allow for a trade in credit, so if I were to buy a $50K car with a $20K trade in, I'd only pay 4% of the $30K difference, or $1200.

Too bad I'm not in the market.

You sure bout that in CA? I was pretty sure it's based on where you live, I know that's how it worked with my last few car purchases (which could be a coincidence), but also on a refrigerator as the State is aggressive; went to the 2nd closest Sears for no reason back when they still existed.

andres3

jmonroe1 said:

qbrozen said:

sda said:

Is it 7% of the sale price or difference if trading a vehicle? Is it capped to a max amount? In SC it recently went up to a cap of $500.

Say what? You have a sales tax cap of $500 on vehicles?

That’s a very good deal, huh? No reason to cheat with tax rules like that.

jmonroe

Regressive the 1% definitely like a cap like that. I'd prefer just a lower rate period; fairer that way.

xwesx

henryn said:

Here in Texas you pay 6.25% sales tax on every vehicle you purchase. There is no “cap”, but trade in does reduce the amount, as you are only taxed on the difference. If you get $10,000 for your trade in, you just save $625 in sales tax. For instance the Ford dealer offered me $10k for my old truck, which makes it worth $10,625 on trade in. But Carvana is offering $14,883 for the truck, so that’s a no brainer.

And Texas wants their 6.25% up front on a lease. Ordinarily, the sales tax is rolled into the overall lease, but it’s still there. Which makes leasing much less attractive, and leasing in order to flip takes a really big hit. Let’s take a hypothetical case here. Say you’re looking at a $50k car, which you can lease for $500 a month (plus taxes). The sales tax will run you $3,125. Spread over 36 monthly lease payments, that will add $86.80 per month to your lease payment. Whereas if you only paid sales tax on each monthly payment, that would cost you only $31.25 per month. Big difference.

And if you’re leasing in order to flip, much bigger deal. Your payoff, right from day one, will include the entire $3,125 in sales tax.

I guess it makes the buyout better, though, since you already preloaded your tax payment up front: The buyout would just be the face value.

xwesx

rayainsw said:

Sandy -
"passed out in the hallway last Sunday morning "
Sorry to hear.
Hope you are back to normal soon!
- Ray
Ouch

No, no... don't depress him! "Normal," for most of us, Normal is not a grand place to be.


-----------

That's odd. I cannot put the word 'normal' in quotes and have it show up.

Get well soon, Sandy! And, try to stay that way for a while, would ya?!

henryn

xwesx said:

henryn said:

Here in Texas you pay 6.25% sales tax on every vehicle you purchase. There is no “cap”, but trade in does reduce the amount, as you are only taxed on the difference. If you get $10,000 for your trade in, you just save $625 in sales tax. For instance the Ford dealer offered me $10k for my old truck, which makes it worth $10,625 on trade in. But Carvana is offering $14,883 for the truck, so that’s a no brainer.

And Texas wants their 6.25% up front on a lease. Ordinarily, the sales tax is rolled into the overall lease, but it’s still there. Which makes leasing much less attractive, and leasing in order to flip takes a really big hit. Let’s take a hypothetical case here. Say you’re looking at a $50k car, which you can lease for $500 a month (plus taxes). The sales tax will run you $3,125. Spread over 36 monthly lease payments, that will add $86.80 per month to your lease payment. Whereas if you only paid sales tax on each monthly payment, that would cost you only $31.25 per month. Big difference.

And if you’re leasing in order to flip, much bigger deal. Your payoff, right from day one, will include the entire $3,125 in sales tax.

I guess it makes the buyout better, though, since you already preloaded your tax payment up front: The buyout would just be the face value.

I'm not sure I understand what you're saying. Or perhaps you're not understanding what I'm saying. If the sale price of the vehicle is $50k, they add the 6.25% sales tax to that. Your payoff price on day one of the lease is the original $50k plus another 6.25% that the leasing company has already paid to the state. So $53,125 payoff on a $50k sales/lease price, as of day one.

I did note what @michael said about some luxury brands charging the customer less in sales tax. Believe me, the state is collecting their 6.25%. If the luxury car leasing company is only charging you 1.25% for sales tax, that means they are making up the other 5% out of their pocket. Or, eventually, one way or another, out of your pocket. TANSTAAFL.

kyfdx

@henryn

The leasing companies are getting trade-in tax credits from the state of TX on the cars they own (and, then sell, at lease end). The only way for them to monetize the credit is to offer it as an incentive to lessees.

IOW, they can't charge sales tax to an individual, and then not remit it to the state.

It's a real thing. The state is giving them a sales tax credit on their lease returns.

Michaell

andres3 said:

Michaell said:

Sales Tax:

@henryn - some dealers in TX can offer tax credits on a lease that brings the rate down to 1.25%. I've seen it mostly with luxury brands, but it's not consistently available.

In CA, the tax rate is based on the dealer location, so cities are constantly working to entice dealers to relocate to their town, so the city can collect the tax revenue.

In CO, sales tax is assessed on the registration address. As there are city, county, state and other special tax districts (stadium district and public transportation are two in the Denver area), the tax rate can vary wildly.

For example, my house is in an unincorporated part of the county, so my tax rate is 4%, not the 8% the city residents have to pay. It does allow for a trade in credit, so if I were to buy a $50K car with a $20K trade in, I'd only pay 4% of the $30K difference, or $1200.

Too bad I'm not in the market.

You sure bout that in CA? I was pretty sure it's based on where you live, I know that's how it worked with my last few car purchases (which could be a coincidence), but also on a refrigerator as the State is aggressive; went to the 2nd closest Sears for no reason back when they still existed.

Well, I haven't lived in CA in close to 30 years, so I suppose it could have changed since I bought my last car there in '91 or '92. I know it was a big deal for the automalls in my hometown and the adjoining city to capture as many brands as possible, to help with the sales tax revenue.

henryn

kyfdx said:

@henryn

The leasing companies are getting trade-in tax credits from the state of TX on the cars they own (and, then sell, at lease end). The only way for them to monetize the credit is to offer it as an incentive to lessees.

IOW, they can't charge sales tax to an individual, and then not remit it to the state.

It's a real thing. The state is giving them a sales tax credit on their lease returns.

This is straight from the web site of the Texas state comptroller:

Motor Vehicle Titled to Leasing Company
Tax is imposed on the leasing company’s Texas purchase of a motor vehicle and is due at the time of titling and registration. Tax is calculated on the leasing company’s purchase price. The leasing company may use the fair market value deduction to reduce the vehicle’s taxable value.
No tax is due on the lease payments made by the lessee under a lease agreement. Also, no tax is due by the lessee on the purchase of a motor vehicle for lease in Texas. Any tax paid by the lessee when the motor vehicle was titled and registered in Texas was paid in the name of and for the lessor.
…
Title to Lessee at the End of an Operating Lease Agreement
Motor vehicle tax is due from the lessee at the time of titling and registration on the purchase of the motor vehicle from the lessor, since a new taxable sale (second transaction) has occurred, whether the vehicle was leased in Texas or out of state. The tax is based on the amount (option) paid at the conclusion of the operating lease agreement and standard presumptive value (SPV) procedures may apply. The lessee cannot claim a credit for tax paid in the lessor’s name for the lessor’s Texas purchase of the leased vehicle.

kyfdx

henryn said:

kyfdx said:

@henryn

The leasing companies are getting trade-in tax credits from the state of TX on the cars they own (and, then sell, at lease end). The only way for them to monetize the credit is to offer it as an incentive to lessees.

IOW, they can't charge sales tax to an individual, and then not remit it to the state.

It's a real thing. The state is giving them a sales tax credit on their lease returns.

This is straight from the web site of the Texas state comptroller:

Motor Vehicle Titled to Leasing Company
Tax is imposed on the leasing company’s Texas purchase of a motor vehicle and is due at the time of titling and registration. Tax is calculated on the leasing company’s purchase price. The leasing company may use the fair market value deduction to reduce the vehicle’s taxable value.
No tax is due on the lease payments made by the lessee under a lease agreement. Also, no tax is due by the lessee on the purchase of a motor vehicle for lease in Texas. Any tax paid by the lessee when the motor vehicle was titled and registered in Texas was paid in the name of and for the lessor.
…
Title to Lessee at the End of an Operating Lease Agreement
Motor vehicle tax is due from the lessee at the time of titling and registration on the purchase of the motor vehicle from the lessor, since a new taxable sale (second transaction) has occurred, whether the vehicle was leased in Texas or out of state. The tax is based on the amount (option) paid at the conclusion of the operating lease agreement and standard presumptive value (SPV) procedures may apply. The lessee cannot claim a credit for tax paid in the lessor’s name for the lessor’s Texas purchase of the leased vehicle.

The credit isn't going to the lessee, it's going to the bank that owns the car. It's on the corporate level to the bank. As noted, it's the bank (owner) that pays the tax, not the lessee.

When a leasing bank has tax credits from the state, they can apply them to a new car lease (in the amount of 5%), and the resulting tax is 1.25%.

In theory, a lessee in Texas doesn't pay sales tax, only the bank does. But, you can be sure it's a line item on the lease agreement (along with the inventory tax, which is paid by the dealer).

qbrozen

@jmonroe1 said:
That’s a very good deal, huh? No reason to cheat with tax rules like that.

jmonroe

Yet another reason why I should just change my address to our SC condo.

qbrozen

So I had wife geared up to go check out the CX9 and Jeep GCL. She left the house, then came back with groceries.

“So I guess you didn’t go to any dealers.”
“No. I was looking at them on my phone and just don’t care. I’m not interested in paying good money on something. I’ll keep driving the Escape.”
Soooo… here’s my translation: “I just want to keep complaining to you about not having a car that doesn’t break.”
Of course, when her $70k Sprinter arrives, all bets are off.

ab348

qbrozen said:

Of course, when her $70k Sprinter arrives, all bets are off.

I give her no more than 6 months trying to drive that thing. Then when she wants something else it’s time for you to turn her argument around and send it right back at her.

jmonroe1

qbrozen said:

@jmonroe1 said:

That’s a very good deal, huh? No reason to cheat with tax rules like that.

jmonroe

Yet another reason why I should just change my address to our SC condo.

That’s right, I forgot about that. Do you meet all of the requirements to do that? With your car flipping biz that could save you a bundle since I’ve heard Jersey is not a haven for saving on taxes.

jmonroe

andres3

I want to open up 50 towns in 50 States with the LOWEST State sales tax in your State. Please vote for me for Mayor!

stickguy

ab348 said:

qbrozen said:

Of course, when her $70k Sprinter arrives, all bets are off.

I give her no more than 6 months trying to drive that thing. Then when she wants something else it’s time for you to turn her argument around and send it right back at her.

I assume it will stick around. But only get used for the road trips down south. Or if there is some need to haul around a ton of people (soccer team?). Otherwise it will stay in the driveway and something else will get driven around town.

xwesx

henryn said:

I'm not sure I understand what you're saying. Or perhaps you're not understanding what I'm saying. If the sale price of the vehicle is $50k, they add the 6.25% sales tax to that. Your payoff price on day one of the lease is the original $50k plus another 6.25% that the leasing company has already paid to the state. So $53,125 payoff on a $50k sales/lease price, as of day one.

I did note what @michael said about some luxury brands charging the customer less in sales tax. Believe me, the state is collecting their 6.25%. If the luxury car leasing company is only charging you 1.25% for sales tax, that means they are making up the other 5% out of their pocket. Or, eventually, one way or another, out of your pocket. TANSTAAFL.

I guess what I'm saying is that if your residual value on the lease is, say, $30K of that original $50K, and you paid $3,125 in taxes on it at the start of the lease, then you won't pay tax on the RV if you decide to buy it out at the end of the lease period. So, it is a tax bath if you lease and turn it in at the end, but it comes out in the wash if you buyout the lease at the end.

xwesx

henryn said:

Title to Lessee at the End of an Operating Lease Agreement
Motor vehicle tax is due from the lessee at the time of titling and registration on the purchase of the motor vehicle from the lessor, since a new taxable sale (second transaction) has occurred, whether the vehicle was leased in Texas or out of state. The tax is based on the amount (option) paid at the conclusion of the operating lease agreement and standard presumptive value (SPV) procedures may apply. The lessee cannot claim a credit for tax paid in the lessor’s name for the lessor’s Texas purchase of the leased vehicle.

Oh, damn. Those double-dipping poo-hats! That should be illegal. Someone's gotta challenge that, plain and simple. They say that another taxable sale has occurred, but that is not true since you entered into the purchase-option contract at the start of the lease.

Actually, now that I read it further, it is a matter of who gets hit with the cost. Essentially, the leasing company is responsible for the tax payment but is directly passing through the tax to the lessee rather than paying their pound of flesh. Either way, Texans need to push that with their legislators to get it fixed.

corvette

I see a couple of cars in my neighborhood with Colorado plates. Not sure whether they belong to students, or dual residents, or a plain old tax cheat, or what.

I'm thinking if my Maverick order gets converted to a 2023, I might give up AWD and switch the order to a hybrid. I do like having AWD the few days a year it snows here, though.