[RRGOO7]

Ive been talking to an out of state dealership about leasing an M3. I have never leased before as I usually buy so am not so familiar with the process. The dealer is telling me i have to pay tax on lease sale amount of the car which is 61k. I have a hard time believing this.

My understanding was that I pay tax on my down payment which is 5500 and tax on my monthly payments and that is it.

Can someone shed some light on this

Thanks alot

[nonimus]

From my understanding, the tax IS on the final sale price of the vehicle. Payment of this tax amount is dispersed throughout your monthly payments. Basically, it is somewhat like adding to the total cap cost of the vehicle you will be leasing, thus increasing your monthly payments by $XXX amount, but it goes to the gov't instead of the dealer/bmw.

For example, if your tax is %10 and the sale price of the car is 60K, you will be paying 6k in taxes. You wouldn't pay this upfront, it would calculate into your payments. So $600 payment would get $60 tax added to make 660 total. Not exactly sure how down payments impact this. But if you're leasing, it would be wise to do zero down anyway.

[M3SWEETNESS]

Same lease plan here in Texas, sucks I know..... Kinda sucks if you want to buy the car at the end of the lease. Since you'll have to pay taxes twice!

[David 12]

I think it depends on what state you live in. If I am not mistaken, nonimus is right for unfriendly lease states like Texas, but you are correct for most other states, in that you do not pay taxes on the full price of the car. I am not sure about Florida, but check with an in-state dealer.

[BickUW89]

Originally Posted by RRGOO7

Ive been talking to an out of state dealership about leasing an M3. I have never leased before as I usually buy so am not so familiar with the process. The dealer is telling me i have to pay tax on lease sale amount of the car which is 61k. I have a hard time believing this.

My understanding was that I pay tax on my down payment which is 5500 and tax on my monthly payments and that is it.

Can someone shed some light on this

Thanks alot

That sounds kind of odd to me. A lease is not much more than a long term agreement to rent - you pay sales tax as you go, with each monthly payment. Paying sales tax on the car, then paying sales tax on the monthly lease payment is doubling the tax. You should only be paying sales tax on the part of the car you are "using" (ie: the depreciation value between sale price and residual) plus the financing fee.

Granted, I'm in Washington state and don't know Florida or Texas laws, but I have a hard time believing that they could get away with double taxing you.