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Old 01-26-2012, 04:49 PM
darkrail darkrail is offline
Registered User
Location: Los Angeles, CA
 
Join Date: Mar 2004
Posts: 56
Mein Auto: 2012 550i M Sport
One other California anomaly:

In most states you get a tax credit on the value of your trade in. In California, you don't.

So if you trade in your $40,000 (residual value) car when you buy your next one, California considers that the same as paying the dealer an additonal $40,000 cash. I've heard that this is only the case in three states, while in the other 47 you would deduct the $40k trade-in from the cost of your next car and only pay tax on the difference. In CA, you pay full tax on this car, full tax on the next car, full tax on every car.

With leasing, you genuinely avoid paying tax beyond the amount your car has depreciated (aprox $3,500 savings in this example).

This (along with lower payments, the fear all the cameras/sensors/robots in my loaded 550 will become expensive to maintain in a few years, and BMW's tendency to charge little or nothing for minor damage upon lease return) convinced me to lease for the first time in my 40 years.


*Please, any Calif. tax experts, correct me if I've got anything wrong here.
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Current: 2012 550i - Jet Black - Black Leather - M Sport
Retired: 2002 540i - Jet Black - Black Leather - M Sport
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