Chronic Car Buyers Anonymous (Archived)

qbrozen · December 2018

alright, here is a question. Anyone know how to calculate tax on a lease in NJ?

I would have thought it is selling price minus residual plus bank fee and dealer fee, all multiplied by 6.625%.

henryn · December 2018

https://nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf

kyfdx · December 2018

qbrozen said:
alright, here is a question. Anyone know how to calculate tax on a lease in NJ?

I would have thought it is selling price minus residual plus bank fee and dealer fee, all multiplied by 6.625%.

That seems pretty close, but I think it's on the total amount of payment, not just depreciation. (so, tax on the finance portion of the lease, as well)

kyfdx · December 2018

Needs advice:
https://forums.edmunds.com/discussion/53555/chevrolet/equinox/advice-on-buying-new-vs-used#latest

corvette · December 2018

au1994

If they just drop it to 800 I’m in. That’s seriously nuts on a model that’s dead.

Super rare! They aren’t making any more of them!

stickguy · December 2018

interesting link. I was just looking at a lease calc today, and could only ballpark. But, basically looks like everything other than DMV fees and sales tax gets taxed. and it doesn't matter I don't think if you pay money into the deal.

you will get pretty close though taking the total payments if you only put down the DMV fees and sales tax.

one interesting fact though, you don't have to be the owner of the car being traded in. so collect cars from friends and family, and trade them all in!

one reason I want to trade mine in. on something nice, will basically save the entire $1000+ in sales tax. Plus of course, much easier deal.

28firefighter · December 2018

Your rebates are likely taxed, too - so selling price before rebates less residual.

qbrozen · December 2018

henryn said:
https://nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf

Thanks for that.

yes, I was missing tax on the interest. good god.

I have a spreadsheet I have been using, and making these calculations is far more complex than I would have thought. I still can't quite zero in on what I'm receiving in quotes, but part of the problem is calculating Net Cap Cost means adding in tax, but you need Net Cap Cost to calculate the tax, so it becomes an unresolved loop in Excel. So I am leaving tax out of Net Cap Cost (meaning it is no longer net), and my calculation comes out about $2 less than the dealer. I guess that's close enough.

kyfdx · December 2018

qbrozen said:

henryn said:
https://nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf
Thanks for that.

yes, I was missing tax on the interest. good god.

I have a spreadsheet I have been using, and making these calculations is far more complex than I would have thought. I still can't quite zero in on what I'm receiving in quotes, but part of the problem is calculating Net Cap Cost means adding in tax, but you need Net Cap Cost to calculate the tax, so it becomes an unresolved loop in Excel. So I am leaving tax out of Net Cap Cost (meaning it is no longer net), and my calculation comes out about $2 less than the dealer. I guess that's close enough.

You don't need NET CAP to calculate the tax.

Total of pre-tax payments
+ acquisition and dealer fee
+ rebates or other CAP reductions
= amount taxed X tax rate = tax.

Then add that to the CAP and re-calculate.

tjc78 · December 2018

Yeah the incentives always seem to throw my calculation off. Leasehacker's calculator is a good check as well. It has a setting for states like NJ.

I'm always plus or minus 5 bucks a month when I calculate my lease versus what the dealer does.

qbrozen · December 2018

kyfdx said:

https://nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf
Thanks for that. yes, I was missing tax on the interest. good god. I have a spreadsheet I have been using, and making these calculations is far more complex than I would have thought. I still can't quite zero in on what I'm receiving in quotes, but part of the problem is calculating Net Cap Cost means adding in tax, but you need Net Cap Cost to calculate the tax, so it becomes an unresolved loop in Excel. So I am leaving tax out of Net Cap Cost (meaning it is no longer net), and my calculation comes out about $2 less than the dealer. I guess that's close enough.
You don't need NET CAP to calculate the tax. Total of pre-tax payments + acquisition and dealer fee + rebates or other CAP reductions = amount taxed X tax rate = tax. Then add that to the CAP and re-calculate.

But how do you get your pretax payments? Net cap minus residual plus interest.

Michaell · December 2018

qbrozen said:

kyfdx said:

qbrozen said:

henryn said:
https://nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf
Thanks for that.

yes, I was missing tax on the interest. good god.

I have a spreadsheet I have been using, and making these calculations is far more complex than I would have thought. I still can't quite zero in on what I'm receiving in quotes, but part of the problem is calculating Net Cap Cost means adding in tax, but you need Net Cap Cost to calculate the tax, so it becomes an unresolved loop in Excel. So I am leaving tax out of Net Cap Cost (meaning it is no longer net), and my calculation comes out about $2 less than the dealer. I guess that's close enough.
You don't need NET CAP to calculate the tax.

Total of pre-tax payments
+ acquisition and dealer fee
+ rebates or other CAP reductions
= amount taxed X tax rate = tax.

Then add that to the CAP and re-calculate.

But how do you get your pretax payments? Net cap minus residual plus interest.

Yep

qbrozen · December 2018

Hence the loop

qbrozen · December 2018

Hmmmm.... a CPO 328GT MSPORT for $22.5k....

stickguy · December 2018

OK, that one I will take if you don't want it!

actually, a CPO is probably a better deal. When looking at the inventory with the saleslady at the BMW dealer (included 17 and 18 loaners, some CPO only and some leasable) she mentioned that they had one loaded 17 (same basic car that she worked the lease quote up on) listed for $31,600 or so with 16K miles. Could probably finance that for the same price as a lease. And I am sure could haggling it down a bit more.

actually a pretty nice looking package. No blind spot, but I will say after driving one, it has excellent visibility. So much better than any of the CUVs.

https://www.bmwofmtlaurel.com/certified/BMW/2017-BMW-330i-Mount-Laurel-7e600f810a0d04fe454bb69f4e61b2dc.htm

I wonder what this realistically should be selling for?

stickguy · December 2018

unless that 3 GT was a terrible color or really miled, I would actually be really interested, because I am one of the few people that seems to really like them. And it is cheap enough to be affordable.

28firefighter · December 2018

What year 328? I would only go 2015 or newer...

stickguy · December 2018

looks like they only went through 2016. so can't be much newer!

corvette · December 2018

Are they using a 0% residual value on that ATS?

stickguy · December 2018

speaking of BMWs, as noted I swung through the local BMW palace. My goodness, they have so many cars there. lot after lot, and probably about 14 inside (they have a big balcony and ramp with cars on it too), Anyway, sat in an X1 and a 3 series, and decided to look at the sedan. It has been a while since I actually tried one. It was a real low option loaner with 2K miles. Not even Navigation on it. but, still will drive the same.

anyway, it is really a nice car to drive. nice tidy size, comfy seats, good ride/handling combo, pretty quick. No, might not be a "second skin" like they used to be, but still a nice car, and easy seeing being a nice car to live with. Just one of those cars that feels right.

stickguy · December 2018

Honcker is odd sometimes. Probably data issues. I recall once seeing something basic like a Forte for some low price, but when I changed the term (maybe from 48 to 36? Something like that) it went from $250 to $550/month. Yeah, no.

the S60 last week was funny when the programs changed. $450 or so one day, $850 the next.

Michaell · December 2018

qbrozen said:
Hence the loop

You calculate the payment using the MSRP and selling price (plus fees, if you are rolling them in).

Then, calculate tax on the sum of the payments, plus incentives.

Add that tax amount to the original price you used to calculate the payment, and recalculate.

Only need to do it once ... no loop

Methinks you're overthinking it.

Screen shot to help explain:

Assuming cell C3 is the selling price plus fees, the tax amount in C18 is the tax on the payments. Add that amount back into C3, and recalculate.

(if there is tax on the incentive, you'll have to add that to C3, as well)

(ignore rows 15 and 16, as they are used to calculate tax on the monthly payment)

qbrozen · December 2018

Michaell said:

qbrozen said:
Hence the loop
You calculate the payment using the MSRP and selling price (plus fees, if you are rolling them in).

Then, calculate tax on the sum of the payments, plus incentives.

Add that tax amount to the original price you used to calculate the payment, and recalculate.

Only need to do it once ... no loop

Methinks you're overthinking it.

Screen shot to help explain:

Assuming cell C3 is the selling price plus fees, the tax amount in C18 is the tax on the payments. Add that amount back into C3, and recalculate.

(if there is tax on the incentive, you'll have to add that to C3, as well)

(ignore rows 15 and 16, as they are used to calculate tax on the monthly payment)

"add back in and recalculate." ... that's just it. As soon as you "recalculate," all the numbers down the line change again, which changes your tax again, and so on and so on.

Also, tax is on sum of payments plus incentives plus fees plus cap cost reduction.

qbrozen · December 2018

Can I upload my excel? Let's see...
I've made a new sheet with just one example of how I'm currently using it and a second example where I have attempted to add tax to the net cap cost and broken the sheet.
I'm definitely no excel wiz. Self taught.

Michaell · December 2018

qbrozen said:

Michaell said:

qbrozen said:
Hence the loop
You calculate the payment using the MSRP and selling price (plus fees, if you are rolling them in).

Then, calculate tax on the sum of the payments, plus incentives.

Add that tax amount to the original price you used to calculate the payment, and recalculate.

Only need to do it once ... no loop

Methinks you're overthinking it.

Screen shot to help explain:

Assuming cell C3 is the selling price plus fees, the tax amount in C18 is the tax on the payments. Add that amount back into C3, and recalculate.

(if there is tax on the incentive, you'll have to add that to C3, as well)

(ignore rows 15 and 16, as they are used to calculate tax on the monthly payment)
"add back in and recalculate." ... that's just it. As soon as you "recalculate," all the numbers down the line change again, which changes your tax again, and so on and so on.

Also, tax is on sum of payments plus incentives plus fees plus cap cost reduction.

If you read my post, I said that the first time through, the number in C3 is the selling price plus fees. You only have to do this step once - to generate the "pre tax" payment.

Then take the tax amount from C18, add in the tax on the incentives and cap reduction (you're making a cap reduction? You shouldn't....), and take the total amount of tax and add it to C3

Yes, the downstream numbers will change once you add in the tax amount to the CAP cost, but the only one that matters is the monthly payment.

Be thankful you don't live in NY - if you take this approach, you actually pay tax on the tax -and we had a poster who linked the relevant information from the NY state department of revenue to prove his point. @kyfdx and I no longer recommend rolling in the taxes into a lease payment, but rather pay them up front - in New York state only

Michaell · December 2018

qbrozen said:
Can I upload my excel? Let's see...
I've made a new sheet with just one example of how I'm currently using it and a second example where I have attempted to add tax to the net cap cost and broken the sheet.
I'm definitely no excel wiz. Self taught.

OK, I agree with your pre-tax payment calculation of $307.26.

I get $732.82 worth of tax, on the payments.

6.63% of the $4750 of incentives and $1000 cap reduction is another $381.23

Total tax is $1114.05

Add that to the original cap cost of $31,379.72 to get $32,493.77

New payment is $340.79/mo - couple bucks higher than your calculations, likely due to the rent charge on the tax amount.

I think your issue is with Excel, because your're ending up with a circular reference, which it doesn't like. You'll have to do some of the calculations by hand.

BTW, why is the MF .00232? I get that you're waiving the acquisition fee, but is there a markup in there, as well?

qbrozen · December 2018

base MF is .00182. To waive the acq is another .0005.

Yes, the circular reference is exactly what I was referring to. There must be a way to make it work, otherwise the dealership's program wouldn't work, right?

I find it so strange that it theoretically should be an endless loop because they are taxing interest and charging interest on taxes. And, really, the pretax payment of $307 is incorrect because it does not include the rent charge on the tax. Makes my head hurt.

qbrozen · December 2018

tjc78 said:
Yeah the incentives always seem to throw my calculation off. Leasehacker's calculator is a good check as well. It has a setting for states like NJ.

I'm always plus or minus 5 bucks a month when I calculate my lease versus what the dealer does.

my problem with the LH calculator is that you don't have flexibility. You either pay all fees or pay $0.

qbrozen · December 2018

Oh, and the column says "cap cost reduction" but it isn't necessarily so. Due to the rather high MF, I am likely going to pay DMV and doc fee up front. Maybe a little more. Just trying to make the wife comfortable with the payment. I think money up front is reasonable when dealing with high interest. And, as I've argued before, the whole "what if you wreck the car" argument doesn't hold water with me when those same proponents tell you to put down as much as you can on a finance.

ANYHOO... may have another deal worked out. After a great deal of back and forth, I've got an offer on a loaner in Mt Laurel for 19% off before $4250 in incentives ($2750 lease cash, $1k conquest, and $500 OL). The summary sheet he sent me is still off from my calculations, but close enough I can help the finance manager fix it.

MSRP 42295
sale price 34299
incentives 4250
MF .00232
mileage deduct $763.75
adjusted RV 22921.45
doc fee $439
title $189

$0 down, $372.79/mo
$750 down, $350/mo

I asked him to validate my OL code but he said he'd do it tomorrow.

xwesx · December 2018

qbrozen said:
base MF is .00182. To waive the acq is another .0005.

Yes, the circular reference is exactly what I was referring to. There must be a way to make it work, otherwise the dealership's program wouldn't work, right?

I find it so strange that it theoretically should be an endless loop because they are taxing interest and charging interest on taxes. And, really, the pretax payment of $307 is incorrect because it does not include the rent charge on the tax. Makes my head hurt.

Q:

I think the easiest method for you to incorporate the tax calculation is to add another column to the sheet (I'm using "P" and calling it "Tax Roll") with a zero value in the first iteration. Then, change the calculation in column "R" to: =(E2-L2+N2+O2+P2+Q2+(T2*36))*0.06625 (note, P2 was not here the first time through).

Then, change the calc in "S", the Net Cap Cost, to =(E3-F3-G3)+N3+P3+O3+Q3, so that it incorporates this "Tax Roll" cell. The trick is to make cell "R3" be the value of "R2", not the calculation you did the first time through. The net result is the difference you have with the dealer.

Attached is a modified version of the Excel. Let me know if it doesn't make sense.

xwesx · December 2018

With the mods I made, it continues to be plug and play. All you need to do is manually enter the tax value in cell P3 once you plug your numbers in to the cells on the second row. Alternatively, you can type "=R2" into that cell and it will be fully automated.

xwesx · December 2018

The more I look at it, the more I keep wanting to modify it to make it run smoother and smoother.

Don't turn me into a lease hunter!

stickguy · December 2018

QB, that is where I was this morning. If I had known, I could have checked it out for you. If nothing else I probably walked past it.

Hmm, that is pretty cheap. If you don't want it, maybe I should take it at that price (actually lower, since I would look to trade in to eliminate the tax entirely). Plus I don't need 15K miles either. Let me know!

stickguy · December 2018

gave the wife a recap of the days car looking adventures over dinner (mexican food and beer. fantastic family owned place near us. Yum). I digress..

floated the plan to convert her car into cash, and keep mine. She nixed that quick. But not because of the 2 payment issue. She finally admitted that she was playing along because the plan was to ditch the elantra, because she just does not like it and has no interest in driving it (and does not really care to ride in it apparently, so bummer for her that we are taking it on a 4 hour trip Sunday!).

so, I have clear mandate to flip that for something nicer. She does not really care what, as long as it is roomier and a whole lot more comfortable. Still leaning toward the CUV, which means at any point after the RDX becomes mine, I can convert it into another car. So I get to do this twice! At that point, if I have her in a nice luxury oriented CUV, she won't care what the spare car is since she won't ever have to go in it. Might even be time for some toy (Jeep? Convertible? who knows!)

now just need to pick which option. A sedan, she probably prefers driving the RDX to commute. A nice CUV, and she gets to have it for her use.

stickguy · December 2018

Q, if you work out the killer deal, see if they have another one for the same price. Just depends on options! I did see their list today, and they have a slew of X1 loaners. All of which have black interior, but I can take that for the right price.

tjc78 · December 2018

@stickguy
I know where you were... love that place.

As for the carb. Two punches are better than one. Get the wife something she loves (Lux CUV) then worry about ditching the RDX and treating yourself

tjc78 · December 2018

@qbrozen
Yes that is annoying. They need to fix that.

stickguy · December 2018

Tom, yup. Once the new one arrives and she gets her mitts on it, it will be hers. At least I get to drive it when we are out together or travelling.

I think I am leaning toward getting that for us and dealing with the RDX later, when she stop caring.

stickguy · December 2018

dove in the pool. asked the salesguy for #s. It could be happening!

of course, still need to take the wife over to drive one, but I have gotten smart. I make sure the money will work before getting her hooked; if there is no way it will ever fit into budget I don't want her falling in love!'

a good thing about only having one payment is that it's OK if it is a little higher.

xwesx · December 2018

stickguy said:
dove in the pool. asked the salesguy for #s. It could be happening!

of course, still need to take the wife over to drive one, but I have gotten smart. I make sure the money will work before getting her hooked; if there is no way it will ever fit into budget I don't want her falling in love!'

a good thing about only having one payment is that it's OK if it is a little higher.

Hmm.... have you done this before?!

stickguy · December 2018

let's just say I have some experience with buying a car to be hers, without adequate buy in from the boss. Hard lesson, but it did not end that badly. Kept the car 6 years, and it was one of the better ones we had.

qbrozen · December 2018

@xwesx - ha. thanks. I actually did the same thing a little while ago. I just put it on the same line, though. An extra column where I type in the tax calculation, then use that new column in the net cap cost calculation.

@stickguy - they have 2 identical X2s. Well, almost identical. I was working numbers on the one with lower miles at first, but he couldn't quite get where I wanted. So then I changed it up and suggested he try the one with higher miles that had a slightly lower MSRP, and maybe his GM would be willing to dig deeper on that one. I suggested the 19% discount and he agreed. For some reason, his payment is $10 higher than my calculation, though, so I'll have to sit with finance and figure out their error.

If you want the other one, you'd be at about $380 with just first month at signing for 36/10k.

suydam · December 2018

tjc78 said:
@stickguy
I know where you were... love that place.

As for the carb. Two punches are better than one. Get the wife something she loves (Lux CUV) then worry about ditching the RDX and treating yourself

Sounds like a good plan!

qbrozen · December 2018

so much back and forth with myself, I can't remember if I shared this for those who asked:
https://cpo.bmwusa.com/certified/2015-BMW-328i-xdrive-WBA8Z5C56FD672429?zip=08527#

kyfdx · December 2018

Forget the tax. Do the calculations with zero tax. Then, once you have the pre-tax payment, calculate the tax manually. Then, add the tax amount into the selling price, and re- calculate. (again, leaving tax field blank). That’s your payment

stickguy · December 2018

I like the GT. my wife would have a cow over the coral red seats.

stickguy · December 2018

I guess it would not be hard to live with one like this. I don't think the wife would complain too much. I made sure to sit in one with the base seats, and I did not find them to be bad. They have enough thigh support, which is key to me.

would have to get the wife to agree to give up the BLIS, active safety stuff, ventilated seats, etc. But, if it saves $70/month, can't have everything!

https://www.bmwofmtlaurel.com/certified/BMW/2018-BMW-X1-Mount-Laurel-1bbab38c0a0d0cc71a39c0b1aae97735.htm

Drivingfool · December 2018

Looks like I got back in with my new name but I really really want my old one back! Can any host or tech guy at Edmunds get me back to me? Whatever I try does not work. I need serious tech help here folks. The time has come to make me whole again!!!

roadburner · December 2018

stickguy said:
I guess it would not be hard to live with one like this. I don't think the wife would complain too much. I made sure to sit in one with the base seats, and I did not find them to be bad. They have enough thigh support, which is key to me.

would have to get the wife to agree to give up the BLIS, active safety stuff, ventilated seats, etc. But, if it saves $70/month, can't have everything!

https://www.bmwofmtlaurel.com/certified/BMW/2018-BMW-X1-Mount-Laurel-1bbab38c0a0d0cc71a39c0b1aae97735.htm

I wouldn't miss the Ray Charles package, but the lack of HIDs and the M Sport package(or at least sport seats) would kill the deal from the start.

ab348 · December 2018

stickguy said:

They have enough thigh support, which is key to me. would have to get the wife to agree to give up the BLIS, active safety stuff, ventilated seats, etc. But, if it saves $70/month, can't have everything! https://www.bmwofmtlaurel.com/certified/BMW/2018-BMW-X1-Mount-Laurel-1bbab38c0a0d0cc71a39c0b1aae97735.htm

Bad idea buying something that lacks features you need/want/will miss by chasing the great deal. You already did that with the Elantra. Just my opinion.

Chronic Car Buyers Anonymous (Archived)

Comments

Helpful Tools

Most popular vehicles

Your Privacy