Leasing in VA double taxation?

[SilverNitr8]

Ok so I've been trying to get information about leasing in VA. I read that if you lease the vehicle, you are not the owner of that vehicle. The dealer is. The dealer gets taxed and the dealer in return imposed that tax on you. If you buy out the lease, do I need to pay the taxes again? If so, do I pay the tax based on the residual value of the car or the full amount of the car? How does this impact your powertrain warranty?

 

[shaggystinger]

Ok so I've been trying to get information about leasing in VA. I read that if you lease the vehicle, you are not the owner of that vehicle. The dealer is. The dealer gets taxed and the dealer in return imposed that tax on you. If you buy out the lease, do I need to pay the taxes again? If so, do I pay the tax based on the residual value of the car or the full amount of the car? How does this impact your powertrain warranty?

Hope this helps. I just finished leasing my stinger in VA (even though my home is MD but same rules apply with a few caveats). The title I was issued has BOTH the dealer and my name on it as the leasee. This means that when I am ready to buyout the lease, per the MVA, I do not have to pay tax again. VA is an upfront tax state which means that you pay the entire tax on the car upfront and it's not added into the monthly payments like many other states do. The catch is, the dealer when drawing up the paper work will simply add the taxes to your final Net Cost. So if you are going to buy the car at the end of the lease or earlier, your buyout amount will include all taxes. Finally, your warranty should not be affected since you are the leasee.

Anyone correct me if I'm missing something or got something wrong

 

[Ruturaj]

KMF (Kia Motor Finance) will be the owner. Not the dealer.

If they get taxed up front for the whole car or whole lease they will put it in your lease upfront (like downpayment) or aromatized (spread across 36 payments with interest on that amount).

If they get charged on monthly payment you will need be paying just for the first month.

When you do buyout your car then you will have to pay tax on buyout amount.

You need to find of if
VA charges tax on
a. Upfront for whole car price
b. Upfront for whole lease cost
c. Per month for monthly lease cost

Powertrain warranty, I think, will be valid as per the thread I read.

Seems like shaggystinger gave a specific answer than my generic one.

 

[shaggystinger]

KMF (Kia Motor Finance) will be the owner. Not the dealer.

If they get taxed up front for the whole car or whole lease they will put it in your lease upfront (like downpayment) or aromatized (spread across 36 payments with interest on that amount).

If they get charged on monthly payment you will need be paying just for the first month.

When you do buyout your car then you will have to pay tax on buyout amount.

You need to find of if
VA charges tax on
a. Upfront for whole car price
b. Upfront for whole lease cost
c. Per month for monthly lease cost

Powertrain warranty, I think, will be valid as per the thread I read.

That's what I was missing. KMF is on title, not dealer. My bad!

 

[Waynerm002]

From the VA DMV site:

Effective July 1, 2016, unless exempted under Va. Code § 58.1-2402, Virginia levies a 4.15% Motor Vehicle Sales and Use (SUT) Tax based on the vehicle's gross sales price or $75, whichever is greater. An additional $64 fee applies to electric vehicles, excluding mopeds.

For the purposes of the Motor Vehicle Sales and Use Tax collection, gross sales price includes the dealer processing fee. The gross sales price is the vehicle price after the manufacturers' rebates or manufacturers' incentives. Gross sales price does not include any other price reductions, such as credit for trade-ins, unpaid liens or other unpaid credits.

Also of note:

At the End of Your Lease...

• If the lessee relinquishes the leased vehicle at lease termination, the lessee has no further obligation to DMV regarding this vehicle. Any actions regarding this vehicle after relinquishment are the responsibility of the lessor.
• At lease termination, if the lessee retains the vehicle, the vehicle must be re-titled in the name of the lessee. Motor Vehicle Sales and Use Tax (MVSUT) will be assessed based on the residual value paid by the lessee to the lessor, unless the lessee is exempt (see below). Plates may be transferred if agreed to by the lessor.
• Motor Vehicle Sales and Use Tax (MVSUT) is normally collected when titling the vehicle in the lessee's name; however, if the lessee is the original person who paid Sales and Use Tax (SUT) on behalf of the lessor he may be exempt from paying it again. The lessee must present proof that the payment was made. Additionally, the vehicle must be either acquired directly from the lessor or from the selling dealer who leased the vehicle to the lessee initially. Purchases made through another dealer will disqualify the lessee from receiving the exemption from Motor Vehicle Sales and Use Tax (MVSUT). The title must include an individual named on the lease. The lease must be to a person or persons, and it shall not include any commercial entity as a lessee.

Here is the link to the site: Virginia Department of Motor Vehicles

 

[SilverNitr8]

Thank you everyone!

 

[zaldwaik]

Hope this helps. I just finished leasing my stinger in VA (even though my home is MD but same rules apply with a few caveats). The title I was issued has BOTH the dealer and my name on it as the leasee. This means that when I am ready to buyout the lease, per the MVA, I do not have to pay tax again. VA is an upfront tax state which means that you pay the entire tax on the car upfront and it's not added into the monthly payments like many other states do. The catch is, the dealer when drawing up the paper work will simply add the taxes to your final Net Cost. So if you are going to buy the car at the end of the lease or earlier, your buyout amount will include all taxes. Finally, your warranty should not be affected since you are the leasee.

Anyone correct me if I'm missing something or got something wrong

Where did you buy yours and for how much? I am in VA and currently looking at dealers in both states.

 

[shaggystinger]

Where did you buy yours and for how much? I am in VA and currently looking at dealers in both states.

I ended up at Dulles Motors in Leesburg,VA. MSRP was $46350 for a GT1 AWD and got them down to $41965 before lease cash, taxes, tags, trade, down-payment etc. etc. etc. Checkout the thread i posted in the dealer section on Dulles first though. You need to be prepared if you decide to go in there and also VA has an insane doc fee ($800+) that can be negotiated where as MD is capped at like $300 I believe (every little bit helps). Shop around!

Other suggestions: King KIA is a good dealer in MD and Ourisman Chantilly, VA has some good sales folks (ask for Tyler). As with any car dealership, it's WHAT you know and not WHO you know that will get you the best deal. Good luck!

 

[Waynerm002]

I concur with the above! Tyler is a pretty good guy to deal with.

 

[Tyler Bratcher]

First Stinger traded in at Ourisman Chantilly KIA.
Stinger Premium RWD, with the Driver Assistance Package. Micro Blue, 15,206 Miles. Contact me if interested car will
Not be here for long!
(540)270-8249
tylerbratcher@ourismanva.com

 

[SilverNitr8]

Why was the car traded?

 

[Tyler Bratcher]

Customer wanted to get a GT2 AWD Micro Blue with the gray interior package. Was the first person to buy a stinger from us, awesome lady and I hope she loves the GT2!!

 

[shaggystinger]

Customer wanted to get a GT2 AWD Micro Blue with the gray interior package. Was the first person to buy a stinger from us, awesome lady and I hope she loves the GT2!!

She is both wise and foolish at the same time Can't beat a GT2 though!!

 

[SilverNitr8]

Customer wanted to get a GT2 AWD Micro Blue with the gray interior package. Was the first person to buy a stinger from us, awesome lady and I hope she loves the GT2!!

Probably saw me driving around in my blue GT2 on 50 hahahaha