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sales tax on a leased car
Posted on 6/16/15 at 4:35 pm
Posted on 6/16/15 at 4:35 pm
The mrs. was looking at cars today and one dealerships offered a little more for her car then the other because he claimed the other dealership had already paid the sales tax on her lease. Is this correct?
1
Posted on 6/16/15 at 4:55 pm to bayou choupique
quote:
The mrs. was looking at cars today and one dealerships offered a little more for her car then the other because he claimed the other dealership had already paid the sales tax on her lease. Is this correct?
I'm assuming he has a sale for resale certificate.
Posted on 6/16/15 at 5:16 pm to Jcorye1
No clue.
Posted on 6/16/15 at 5:24 pm to bayou choupique
I'm kinda confused.
You're attempting to trade in a leased car?
In LA, you pay the sales tax on the payment, so not sure what sales tax they're referring too. The lease is basically a loan with a balloon payment in this case. I don't recall any sales tax impact when trading it in (I leased a new one).
I don't know about the dealer claiming they already paid tax on the vehicle.
You're attempting to trade in a leased car?
In LA, you pay the sales tax on the payment, so not sure what sales tax they're referring too. The lease is basically a loan with a balloon payment in this case. I don't recall any sales tax impact when trading it in (I leased a new one).
I don't know about the dealer claiming they already paid tax on the vehicle.
Posted on 6/16/15 at 5:30 pm to LSUtigerME
Yes she is trying to trade in a leased car. Tigerme I was aware you pay the tax each note. I think the salesman was wrong.
My question now is does she owe any taxes if she decided to trade In the lease, or is it like trading in a purchased vehicle?
My question now is does she owe any taxes if she decided to trade In the lease, or is it like trading in a purchased vehicle?
This post was edited on 6/16/15 at 5:40 pm
Posted on 6/16/15 at 11:42 pm to LSUtigerME
quote:
You're attempting to trade in a leased car?
I've done that several times with my leased vehicles that were worth substantially more than the end-of-lease purchase price. The dealer purchased it outright and I applied the cash out to the capitalized cost reduction on the next lease. I've also sold two of my leased vehicles to friends at the end of the lease with them paying the difference between the EOL purchase price and book trade-in value.
When you turn in a leased car to a dealership they have no claim on the vehicle. It just sits on their lot until the leasing company picks it up and takes it to auction unless you exercise the EOL purchase option and sell it to the dealer.
Sales tax is due on the final EOL purchase price if you sell to an individual.
Posted on 6/17/15 at 8:01 am to Layabout
I don't understand why the guy at the other dealership told her that, maybe he was new.
when you trade in a car, the trade in value is deducted from the sales price of the new car and you only pay taxes on the difference of the two. From what I am hearing, you cannot do that with a leased vehicle?
when you trade in a car, the trade in value is deducted from the sales price of the new car and you only pay taxes on the difference of the two. From what I am hearing, you cannot do that with a leased vehicle?
Posted on 6/17/15 at 8:57 am to bayou choupique
quote:
My question now is does she owe any taxes if she decided to trade In the lease, or is it like trading in a purchased vehicle?
No. A lease is a purchased vehicle...its simply another way to pay for a vehicle. You trade in like normal.
Posted on 6/17/15 at 11:14 am to Coach Guidry
quote:
No. A lease is a purchased vehicle...its simply another way to pay for a vehicle. You trade in like normal.
correct.
Posted on 6/17/15 at 11:23 am to 632627
quote:
No. A lease is a purchased vehicle...its simply another way to pay for a vehicle. You trade in like normal.
ok, I guess T**M Honda is about to loose a sale then. thanks guys.
Posted on 6/17/15 at 12:05 pm to bayou choupique
M*** Honda would be happy to steal it away...
Posted on 6/17/15 at 7:22 pm to Coach Guidry
T**M Honda is shady as shite. They straight cock blocked me from buying a car with another dealer by securing the only car in the region before I ever came close to an agreement (test drove there and that's it) and refused to deal with any other dealers. Would not match price or trade in I agreed to with other dealer. While completely legal, I was pissed.
And yes, everything said above is correct. Like I said it's the same as purchasing the vehicle but with a balloon payment (some credit unions actually offer this form of lease-similar financing). You trade it in and may receive the same tax credit. Your trade in value is compared against your lease payoff (typically residual + remaining payments + disposition), and any extra applied as a down payment.
And yes, everything said above is correct. Like I said it's the same as purchasing the vehicle but with a balloon payment (some credit unions actually offer this form of lease-similar financing). You trade it in and may receive the same tax credit. Your trade in value is compared against your lease payoff (typically residual + remaining payments + disposition), and any extra applied as a down payment.
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