So I signed a lease on a car 2 days ago but was in a hurry to get out of the store, today I noticed they added the FL 6% sales tax to the final price of the car to determine the monthly lease payments, then every month they add tax as well.. It is called double dipping, but not sure the dealer would make money by collecting tax twice. Going back tomorrow to complete the transaction and will complain, but want to be sure they are in the wrong before I open my mouth. Purchase option: Vehicle Price $40,750.00 Market discount $1,036.29 Customer Rebate $2,000.00 Smart Choice Price.....................$37,713.71 Trade-in Value $8,000.00 Difference $29,713.71 Sales Tax (estimate) $1,913.64 Tag/Registration Fees (estimate) $250.00 Tire, batery/MVWEA $6.50 Dealer Service Fee $75.00 Electronic filing $98.75 Balance Due (estimate)...............$32,057.60 On the monthly payment estimator they came up with something like $185.00 plus $11.00 tax, for a total monthly payment of $196.00 Sooo, are they crooked or I am looking at it wrong.?
Hi, On the face of it it seems to be a bit of double dipping but who knows till you ask. Take your glasses with you when you go as it might well be described in a size 4 light colored font on a fawn background. Can I ask as to what sort of car it is and how many years the lease was for and how much you would have residual at the end?
2013 Chevy Volt. Residual at the end of the 3 year lease: $28K. Part of that would be a $7,500.00 Federal Tax Credit. I do not plan to buy the car at the end of the lease, but rather jump into another lease if the terms are good, or look for the latest tech in another brand with similar favoarable lease rates. (Americans do not like station wagons, diesels or electric cars, therefore one can stumble across sweet promotions as the maker tries to move metal before it gets stale. Also, I love station wagons, diesels and elecric cars, a win-win situation indeed)
There are a couple of numbers that you're missing which do in fact make the lease payment. I'm not sure exactly on the 'double dipping' of the tax issue, which is certainly something to look into. Generally, they charge tax on the full sales price, then you pay that incrementally through the lease. On your lease, find the capitalized costs and the residual value. These specify the monthly payment. Not the tax. In a *very* high level, and round numbers, it works like this: You're paying over a specified duration for the depreciation of said vehicle. Sale price: 20K (showroom floor, sticker price, etc.) Residual Value 10K (predicted value of car (per mfg) at the end of the lease) CC thereby is 10K, which is what you'll pay over 2, 3, or 4 years. So if you have 10K to pay over 3 years, you end up at 277ish a month. You lease the car, make the payments, and give it back to them at the end of the lease. They gave you a car worth 20K, you drove it for 2 years, and gave it back to them. They now have a car worth 10K, just as planned. Again, this is very basic churn of spitball math, doesn't included taxes, docs, delivery, rebates, etc. etc. I sadly have to go through this explanation with my Wife on why I buy... and why she leases. Every two years. Over and over.
Hi, My kind of car, unfortunately they are very popular here in Europe, leasing is also a lot more expensive and for those who aren't based here virtually impossible to arrange. The best deal I have had with my last 2 cars (VW Passats) is have the shipyard I am doing the build at buy a car for use by me, at the delivery of the vessel I hand the car back , they get it valued and charge the project the difference between price paid and what the value is at the end. This has been €10,000 on one and €12,000 cost on another after 3 yrs. The rentals the later arrivals had cost a minimum of €1000/mo This has worked out to be the cheapest way to get a car, not all yards will do this however.
Yeah, I am quite familiar on how leasing works, done it before, but can't remember paying taxes twice, which is the issue here. I belive I am getting a good deal on this Volt lease, not only on the monthly payments, but also on the efficiency: Over 100 mpg (or equivilant) as well as the right to use HOV lanes, free charging at Starbucks and other places I hang out. Sadly some of the redneck republicans thinks the Chevy Volt is a communist plot and they have to pay for it in the form of the tax credits. Been searching high and low for a Passat Diesel Station Wagon, but they are not sold here in the US. Neither is the Volvo Diesel Wagon or other good Euro cars. Big SUVs however are back in vogue after the oil prices peaked in 2008. THis here Volt looks promising, but a tad compromise: It is trying to be a sedan and a hatchback at the same time: Why in the world couldn't they raise the tail and make it a real wagon: Now it has a rear hatch, but not much volume back there. Hoping the next generation will be better, the tech however is right on the money: 27,500 Volts sold so far since it came out in 2010 and every owner I have talked to love 'em, almost a cult following. Only had mine for a few hours so I am not in love yet, but it sure looks promising and efficient: What I save in gasoline alone over my previous car will pay for the lease. Just hoping they did not try to screw me on the tax issue so I won't have to yell and scream at the sales manager to have him change the contract.
I am an auto dealer owner. What happens is we show you what the taxes will be. Then you take the taxes and split them for the remanding payments. You should not pay tax up front unless you want to lower you payment. But you will still pay the tax per month and the dealership will use the money more as a down payment. I'd also look at getting the dealer fees take off. That is just straight profit for the dealer. Also don't buy any extended warranties if you are going to lease a car! They just help the dealer buy diesel for our boats. Keith
I also don't know why you would trade in a car for a lease? Why don't you have the dealership cut you a check for your car and put that money in the bank. Your payment would be higher but you are not throwing your money away. I always say put at most $2000 down at the very most. Keith
Okay, uh so the dealership will use the more as a down payment you say? That would be the $1913.64 listed above? Doing a 36 month lease I should only be paying taxes on the portion I use the car, and NOT on the residual value after the lease? In my case I am "buying" $14K worth of car, then the taxes should be $840.00, NOT $1,913.64? The residual value will be $28K and the next guy can take care of those taxes. Still confused about the $1,913.64: I loos like they use that number to add to the price, then I will be paying that much more for the car on top of the $840 divided in 36..? My head hurts As for cutting a check for the $8K trade in, that would increase the lease payments by $222.22 then? I would rather pay less per month and use the trade-in as down payment. (I think) Thanks for the comments, it is clear as mud now.
Keep in mind, you will never see that money again. Also are you getting the car at invoice plus discounts? You should be, that could be another grand or so.
Kind of, but I have frozen credit with all tree credit bureaus and was unable to un-freeze the credit repoprts, so all the numbers are estimated based on my verbal credit score. Going back in tomorrow to complete the deal, they just let me drive the new car off the lot due to my smooth speech and honest good looks... Aye, I have left a lot of money on variuos tables that I will not see again, but it made the dancing girls happy.. The lease rates were alredy discounted when I walked in the store and I negotiated down from there. ($4K down, $299.00 for 36 months, plus taxes, title, registration, etc. Certainly I could have done better if more prepared and if willing to spend more time on the deal, but I probably did okay and the dealer needs to make a living too: Hate to nickel and dime somebody to death if the deal is reasonable good and they are willing to work with you. I have bought cars there before and have been treated right, no complaints. Thanks for the comments gents.
Gotcha. Sorry then for the walk down Lease 101 lane. Makes sense to look closely at the numbers then if you're getting double tapped for taxes.
In Florida, I have leased 4 vehicles. The numbers never look like that. Sales tax is not part of the initial numbers, you (or I was always) taxed on the amount of the lease payment monthly only.
Bingo... That is what I thought as well. We shall see tomorrow, I don't have all them papers in front of me as they kept the originals at the dealer but the above numbers are correct as I have a copy of the sales agreement but not the contract. 'is okay, we can all use a refresher now and then..
