Lease then Buyout - Contract Explanation

[gbears]

I read this entire thread and have one state related question:

Does Illinois (Cook County 60164) double tax or are taxes wrapped in the lease? I'm going for the lease buyout and want to make sure I'm not being double taxed.

Thanks!

I am also looking in Illinois (Kane County) and you should not be double taxed. Illinois used to do it but they stopped in 2014 or somewhere around there. I am will post my lease quote soon for reference.

 

[Windy]

I am also looking in Illinois (Kane County) and you should not be double taxed. Illinois used to do it but they stopped in 2014 or somewhere around there. I am will post my lease quote soon for reference.

Thanks for the reply! I'm hoping lease rebates are better for the month of May. April's were $9,500. How much off MSRP are you shooting for? What trim? AWD or RWD?

 

[jd284]

I read this entire thread and have one state related question:

Does Illinois (Cook County 60164) double tax or are taxes wrapped in the lease? I'm going for the lease buyout and want to make sure I'm not being double taxed.

Thanks!

Same issue here in CT, cant avoid it. However, it is still better than the finance incentives and cash back. In CT we pay tax on the lease cash on the lease tax up front, and the tax is based on the monthly payment. Then during buyout it is the adj cap cost + sales tax. double taxed, but still not that bad.

 

[gbears]

Hi all,

Starting to look into the lease buyout option as well thanks to this thread. It seems like I can get the GT2 for the same cost of financing the GT1 but want to make sure I understand this correctly.

I had a question on the Total Gross Cost Cost. I'm not sure how the Sales/Use tax is calculated. I would have thought it would be the tax on the total amount of the lease, but it seems higher. My tax rate is 7%.



And if I buy out immediately from what I have read through here, my total cost should around the following:
Adjusted Cap Cost: 42052.17
Minus 1st Payment: -675
Plus Tax (7%): 2896.40
Plus Title and License: 500
Termination Fee: 300
Total Cost: 45,073.57

Does this seem right or am I missing something? Thank you all.

 

[jd284]

Hi all,

Starting to look into the lease buyout option as well thanks to this thread. It seems like I can get the GT2 for the same cost of financing the GT1 but want to make sure I understand this correctly.

I had a question on the Total Gross Cost Cost. I'm not sure how the Sales/Use tax is calculated. I would have thought it would be the tax on the total amount of the lease, but it seems higher. My tax rate is 7%.

View attachment 41332

And if I buy out immediately from what I have read through here, my total cost should around the following:
Adjusted Cap Cost: 42052.17
Minus 1st Payment: -675
Plus Tax (7%): 2896.40
Plus Title and License: 500
Termination Fee: 300
Total Cost: 45,073.57

Does this seem right or am I missing something? Thank you all.

View attachment 41333

what state are you in? i was just checking mine from this friday and 11B is marked as N/A

 

[gbears]

Thanks for the reply! I'm hoping lease rebates are better for the month of May. April's were $9,500. How much off MSRP are you shooting for? What trim? AWD or RWD?

Looking for GT2 AWD. I'd be happy with 5% off MSRP. It seems hard to get them down on 2020s. Hoping for a little more lease cash as well. We will find out Monday or Tuesday

 

[gbears]

what state are you in? i was just checking mine from this friday and 11B is marked as N/A

Illinois

 

[jd284]

Illinois

Based on what i am seeing, this is not a good state to do a lease buyout in
Illinois sales tax on lease - Lincolnwood Sales Tax Attorney

My guess is 11b is the following

.07 sales tax * 12000 cap cost reduction = 840
.07 * 675 monthly payment = 47.25 * 24 months = 1134 + 840 = 1974

it's close but off a few $s

 

[gbears]

Based on what i am seeing, this is not a good state to do a lease buyout in

My guess is 11b is the following

.07 sales tax * 12000 cap cost reduction = 840
.07 * 675 monthly payment = 47.25 * 24 months = 1134 + 840 = 1974

it's close but off a few $s

Stupid Illinois, the down payment tax was what I was missing. Seems like if you live in Chicago there's another tax on top of this.

Thanks man. Still doing the lease buyout seems to save me around 6K unless I'm calculating my buyout wrong. Do my calculations look correct or am I off?

 

[jd284]

Stupid Illinois, the down payment tax was what I was missing. Seems like if you live in Chicago there's another tax on top of this.

Thanks man. Still doing the lease buyout seems to save me around 6K unless I'm calculating my buyout wrong. Do my calculations look correct or am I off?

sure thing. yeah theres still a savings for sure, its just not as high as other states. yup your other calcl ook good. i have heard there is no 300 buyout fee though. good luck man!

 

[Windy]

Based on what i am seeing, this is not a good state to do a lease buyout in
My guess is 11b is the following

.07 sales tax * 12000 cap cost reduction = 840
.07 * 675 monthly payment = 47.25 * 24 months = 1134 + 840 = 1974

it's close but off a few $s

I'm not sure if that's true. Here's what I found:

Illinois sales tax on lease
"Illinois law has changed so that sales tax applies to the down payment and monthly lease payments. If the down payment is $2,000, the tax on that would be $165. If the monthly payment is $300, the sales tax would be $24.75 each month. The total tax for a 36-month lease would be $1,056, or $1,419 less than under the current formula."

 

[jd284]

I'm not sure if that's true. Here's what I found:

Illinois sales tax on lease
"Illinois law has changed so that sales tax applies to the down payment and monthly lease payments. If the down payment is $2,000, the tax on that would be $165. If the monthly payment is $300, the sales tax would be $24.75 each month. The total tax for a 36-month lease would be $1,056, or $1,419 less than under the current formula."

Yes, that is what i posted. The incentive is being taxed as part of the down payment.

 

[Windy]

I finally took the plunge and bought a 2020 CeramicSilver GT2 AWD with red interior today. For reference, I'm from a north west suburb of Chicago. The car's MSRP was $54,315. I was able to negotiate a dealer discount down to $50,000. After applying this months lease cash of $10,200 I got the car at $39,800 before TTL. The goal is to buy out the lease ASAP. I want to thank Mach_Tuck and all the other members of this forum for their insight and detailed explanation. I couldn't of done it without you guys. I love the car and this forum!

 

[nadal43]

I finally took the plunge and bought a 2020 CeramicSilver GT2 AWD with red interior today. For reference, I'm from a north west suburb of Chicago. The car's MSRP was $54,315. I was able to negotiate a dealer discount down to $50,000. After applying this months lease cash of $10,200 I got the car at $39,800 before TTL. The goal is to buy out the lease ASAP. I want to thank Mach_Tuck and all the other members of this forum for their insight and detailed explanation. I couldn't of done it without you guys. I love the car and this forum!

Congrats! Hoping to join the club soon.

When talking numbers with the dealership were you able to negotiate on the lease? Or more specifically are you able to negotiate the lease buyout fee?

I’m trying to go this exact route as well. I figure things like money factor and residual value don’t matter as much if I’m just trying to buy out the at ASAP, right?

I’m just trying to make sure they don’t try to attach crazy early termination fees or something.

 

[stociblazer]

Congrats! Hoping to join the club soon.

When talking numbers with the dealership were you able to negotiate on the lease? Or more specifically are you able to negotiate the lease buyout fee?

I’m trying to go this exact route as well. I figure things like money factor and residual value don’t matter as much if I’m just trying to buy out the at ASAP, right?

I’m just trying to make sure they don’t try to attach crazy early termination fees or something.

As you said, don't worry about money factor or residual value. also, it won't be possible to negotiate acquisition fee or buyout fee.

you can and should negotiate the value of the car (& add-ons) down and any trade-in up. with a trade-in, as others have said, ask them to write you a check instead of applying it to the lease. this protects you in case the car is totaled before you can buy out the lease. the ultimate goal is to get the ADJUSTED CAP COST as low as possible, because that is very close to what you'll pay KMFUSA to buyout the lease.

the dealership i went to presented me with MSRP at the top of the lease and totally ignored the autotrader price. had to get them to come down to the autotrader price as a base then discount $996 of "add-ons" like window tint, nitrogen in the tires, etc by $500. At that point, I was happy to proceed. I was annoyed they tried to pull the wool over my eyes, but maybe it works sometimes.

Good luck!

 

[gbears]

I finally took the plunge and bought a 2020 CeramicSilver GT2 AWD with red interior today. For reference, I'm from a north west suburb of Chicago. The car's MSRP was $54,315. I was able to negotiate a dealer discount down to $50,000. After applying this months lease cash of $10,200 I got the car at $39,800 before TTL. The goal is to buy out the lease ASAP. I want to thank Mach_Tuck and all the other members of this forum for their insight and detailed explanation. I couldn't of done it without you guys. I love the car and this forum!

Congrats @Windy . Were you able to somehow negotiate away the Illinois sales/use tax. I'm still negotiating on my end, hope to make a decision on a week or so. Enjoy!

 

[nadal43]

As you said, don't worry about money factor or residual value. also, it won't be possible to negotiate acquisition fee or buyout fee.

you can and should negotiate the value of the car (& add-ons) down and any trade-in up. with a trade-in, as others have said, ask them to write you a check instead of applying it to the lease. this protects you in case the car is totaled before you can buy out the lease. the ultimate goal is to get the ADJUSTED CAP COST as low as possible, because that is very close to what you'll pay KMFUSA to buyout the lease.

the dealership i went to presented me with MSRP at the top of the lease and totally ignored the autotrader price. had to get them to come down to the autotrader price as a base then discount $996 of "add-ons" like window tint, nitrogen in the tires, etc by $500. At that point, I was happy to proceed. I was annoyed they tried to pull the wool over my eyes, but maybe it works sometimes.

Good luck!

Wow that’s really helpful thanks for the info! At the moment I’m looking at a 2019 GT2 for $52k. I’m trying to get a dealer discount of ~10% so about 5k off and then do the current lease cash of $12,120 bringing me to about $35k.

From this point what would a reasonable adjusted cap cost look like assuming no add ons? I know to expect an acquisition fee, doc fee, title, tag, license. Maybe about $36.5-37k?

I understand after about a week I’ll also have to pay the $300 buyout plus taxes at that point bringing me to maybe $39k out the door? Does my math seem about right or am I possibly missing something?

 

[Windy]

Congrats @Windy . Were you able to somehow negotiate away the Illinois sales/use tax. I'm still negotiating on my end, hope to make a decision on a week or so. Enjoy!

Unfortunately no. I didn't think you could negotiate that. I just tried to get the car price as low as possible to account for those charges. I was shooting to get under $40K before TTL at the very least and I was able to achieve that.

 

[Windy]

Wow that’s really helpful thanks for the info! At the moment I’m looking at a 2019 GT2 for $52k. I’m trying to get a dealer discount of ~10% so about 5k off and then do the current lease cash of $12,120 bringing me to about $35k.

From this point what would a reasonable adjusted cap cost look like assuming no add ons? I know to expect an acquisition fee, doc fee, title, tag, license. Maybe about $36.5-37k?

I understand after about a week I’ll also have to pay the $300 buyout plus taxes at that point bringing me to maybe $39k out the door? Does my math seem about right or am I possibly missing something?

Seems about right which is a steal. Jump on that lease cash incentive. It's 2K more than my locations lease cash offer! Good luck!

 

[jd284]

Wow that’s really helpful thanks for the info! At the moment I’m looking at a 2019 GT2 for $52k. I’m trying to get a dealer discount of ~10% so about 5k off and then do the current lease cash of $12,120 bringing me to about $35k.

From this point what would a reasonable adjusted cap cost look like assuming no add ons? I know to expect an acquisition fee, doc fee, title, tag, license. Maybe about $36.5-37k?

I understand after about a week I’ll also have to pay the $300 buyout plus taxes at that point bringing me to maybe $39k out the door? Does my math seem about right or am I possibly missing something?

I would assume 1.5-2k for fees depending on what they are. Mine were in that range and included acquisition, registration, doc and something else. When I logged in to my portal a day or two ago I didn’t even see a buyout fee. My net cap cost is 34260 and the buyout is 36050. So it looks like it is net cap cost minus first payment plus sales tax