Actual Cost at Dealer for 2010 vs 2009

But, the price you get on a lease is the same as purchasing. That is a misconception on leasing is that it is a dealer set price. Once you figure 19k for the lease selling price also, the payments would drop by 100 a month. Then, by far, the lease wins out.

That is true. I know a lot of people have given you some very good info in this thread. Obviously, I have no vested interest in your purchase/lease. In my opinion, it is a good deal. You could probably get the lease payment down another 15 a month, but I'll leave that up to you as it is your checkbook paying for it every month

 

skdoula,

I'm still unclear how the $2000 upfront lease fees are being figured. Can you ask the dealer how much sales tax is being charged on the lease on day#1, and how much sales tax would be added to buying the car at end of lease ?

 

skdoula,

Thanks for the clarifications.
I suggest you use my second method for buy vs lease comparisons, once you have clarified sales tax costs up front, the monthly payment, and at end of lease.

I disagree wholeheartedly with Jabber's comment that car capitalization costs are the same in lease vs buy situations. I agree that they *could* be, but NOTHING makes them have to be the same. The car dealer is always calculating behind your back how the interplay of car price, interest, and depreciation adds up to a total cost. I recommend ignoring the games, and simply compare total cost of leasing vs total cost of buying.

Since you are in a position now to know the total cost of leasing (once you have clarified how sales tax is going to distributed across initial payment, monthly payment, and end-of-lease car purchase), it is straightforward to figure out how much you have to negotiate down a straight car purchase price in order to find the break-even point using expected interest rates you can qualify for.

I'm not sure why your negotiating last week left you with high numbers. If it was the same dealer, maybe they were setting you up for the lease deal ?

 

The depreciation number and the total_payments number are not the same, but your comments suggests that you will have ~ another $900 in sales tax to tack on to the purchase cost of the end-of-lease car.

Ask the dealer ! And while you are at it, ask if the monthly payment will have sales tax tacked on, too.

 

So very true, and I exclude my pitiful contributions. The help available in this forum for use, care, maintenance and repair of the Prius is wonderful.

I'll check back in to your thread after you have a chance to review the paperwork your hubbie stole

 

Sage, when you talk about the price of the car (car capitalization costs), there are a few things you are assuming. That the dealer gets the acquisition fees, money factor, residual, etc. In reality, the dealer gets nothing extra based on rate charged, term, mileage, depreciation, etc. We get the profit from the vehicle. Everything else is written in stone by Toyota Financial. If I made the residual 11,000 instead of the 13,???, toyota would make me do a new contract. I can't adjust the acquistion fees to make more money. I can't play with the $.15 per mile on over miles. I can play with price, and that is it. And when you go in to sign the contract, it will become very obvious that I did that once you scour over the numbers.

In vermont, as near as I can tell, you have a flat tax based on the net cost of the vehicle and no use tax. A use tax is a tax on the monthly payment. Generally, it is not charged when you have a flat tax. Vermont is 6%. There should be nothing added to the payment in your case.

 

Me too. I'm trying to reverse engineer the payment as we speak to get the actual selling price...

 

Is it too much to ask at this point for the calculations to take into account the tax credit offered on the buyer's 2009 federal income taxes? Any sales taxes charged by a local or state government, as I understand it, will be deductible next year -- I think it will be a credit, but I'm not certain about that.

I believe the credit is only for taxes paid on a purchase, so it would lower the purchase price only.

 

I think it will be easier to just find the actual amount of sales tax you are paying on day #1. One way or another, the TOTAL sales tax is going to be:

.06(car_price + upfront_fees - sales_tax_paid_on_day_one)

The unpaid sales tax will show up in either the total monthly payment, the residual cost payment, or a combination of the two. The point of why I keep harping about the sales tax is because the total cost of the lease option has to include the total sales tax, just as it will in the buy option.

For my own edification, if you are up to it I 'd like to see a breakdown of the quoted $2000 upfront costs.

 

It will have no affect on your purchase price right now. It does affect your taxes next year. However, that is out of my area of expertise. And I haven't studied it enough to even hazard a guess. Tax guys?

 

Sure, I can do that. The only mandatory cost is first months payment. Even that can be rolled in, but your net cap cost is going to go up because the dealer actually writes the check for it. To keep things simple, $239 is all that is required down by toyota. Since she is getting the special lease rate, the security deposit is waived. Acq fee, taxes, and plate fees can all be rolled in. The dealer is asking for $2,000. She doesn't have to put that much down. However, since she is putting $1,761 more than required, that is directly lowering her payment by about $50 a month. (About $30/mo per $1,000 down.)

Tax on a lease is different for every state. Example: Michigan. You do not pay tax on the purchase price of the vehicle. You pay a "use tax" which is a %age of the payment and money down. In Illinois, you pay tax on the purchase price of the vehicle. In addition, if you buy the car at the end, Illinois taxes you on that selling price as well. In short, you get taxed 1.5 times the normal amount of buying. Yes, Illinois rapes you if you buy it at the end. In vermont, according to my cursory reading of their DMV website, it looks like she is going to be taxed on the purchase price of the vehicle at 6%. No use tax added to the payment.

 

Thanks for responding Jabber, but I have to admit I was unclear at directing my post to the OP.

We are cross-talking. I think it is clear that the upfront fees only include a portion of the total sales tax that will eventually have to be paid; that plate fees *may* be less if paid directly by the customer at the DMV, instead of using the dealer prices which is pre-packaged in the lease deal; and the car cost chosen for the lease deal *may* be quite a bit higher than what she can negotiate in a non-lease purchase. Lastly, 'acquisition fees' are for the birds. A low interest rate *may* offset some or all of these extra charges.

On a different, but related note: if OP chooses the lease route, she will be faced with a $13,250 'balloon' payment in three years to buy her leased car. I hate to think what the interest rate and terms will be to finance that. Once people get on the low-monthly-payment carousel, bad things eventually happen to a lot of them.

 

Ah my bad. Interesting that you bring up plate fees. It may be different, but I know in Illinois, we will get slapped hard by the DMV if we try to mark up the fees. Dealers actually try that in different states?

I'll just reserve any more comments until I see the actual numbers from the OP.

 

i just leased a black pkg. 6 for 36mo. 15,000mi/yr. $3,000 down, for $268 that includes tax./mo.

selling price $24927.17 bank fee 650 residual 15784 money factor .0009 I'm in so. cal.

 

Can you believe it ?!?

I've even heard rumors that car dealers will sell the car at the highest price the consumer will agree to.

 

BLASPHEMY!

"Your job is to get the most you can for the car. The customers job is to pay the least they can. Is it your fault that you do your job better than the customers?" Typical car sales speech behind closed doors.

Seriously, I had no idea some states allowed that. Of course, in Illinois, all the fees are government regulated so we can't play any games.