New to leasing? Tips and Facts here

My source is: http://www.leaseguide.com/lease09.htm:

In some states, such as Ohio, you pay sales tax up front on the capitalized lease cost. In other states, such as Texas and Illinois, you actually pay sales tax on the full value of the leased car, not just the leased value, just as if you were buying it. In Illinois, you can also pay monthly taxes. In a few states, such as New Jersey, you have a choice of paying up-front taxes on either the full purchase price or the total of lease payments. Some states tax fees and taxes; others don't. Most states tax the lease acquisition fee; a few don't. Some states, have a cap on the total amount of taxes paid. Some allow a tax credit for trade-in vehicles, others do not.

I lived in Ohio when they made this change, but I did not actually lease a car under this rule, so I can't speak to the exact implementation.

My understanding is that Ohio gets all the sales taxes when you start the lease.
If you roll the taxes into the payment, and you're more or less financing the taxes like a regular loan.

This is distinct from other states that simply compute the taxes as a percentage of the monthly payment. It is likely that this method is cheaper than Ohio's approach.

I did a little more investigating, and here's (hopefully) the definitive answer on taxation in the 17th state.

Ohio taxes are computed on the sum or all lease payments, and are payable upon lease inception.

It is possible to roll the cost of those taxes into the lease, but this does not change the fact that the State of Ohio gets paid up front. Therefore, when you choose this option, you are in essence financing the taxes, and will pay interest on this amount as a result.

Anecdotally, it appears there may be a problem if you move to another state during you lease, as you could be subject to double taxation, as the new state will collect sales taxes on payments, after having already paid up front to Ohio.

Do you know how the payoff amount is calculated on a lease if I want to pay off the lease early and buy the car?

Originally Posted by I Love BMW's

Do you know how the payoff amount is calculated on a lease if I want to pay off the lease early and buy the car?

Approximately it is the price of the car ( not MSRP ) minus the number of payments made times the monthly depreciation minus the security deposits ( if any ).

It is available on BMW owners circle exactly if you used BMWFS.

great info from everyone but let me ask everyone this, assuming you're about to purchase a brand new 750i with a price of $75,000 and you only drive 15,000 miles/yr. Which would be more profitable in 3 years, to lease it or finance it with a rate of 8%

Originally Posted by SteveinBelAir

I think it would be a good idea to get everyone to chime in on the tax rates and requirements for each state.

I'll start.

Maryland - 5.00% - Based on full negotiated price of vehicle. Can be paid up front or rolled into vehicle price.

Minnesota charges sales tax up front and is based on the lease value (essentially vehicle cost - residual - any trade) PLUS the interest/finance charge.

http://www.taxes.state.mn.us/taxes/s...%20vehicles%22

I have a question about damage to a leased car..

My mother leased an x5 and a chain hit the car on the highway and went up over the hood and roof. Damage is estimated at like 3000. Can we take it some place to get it fixed, or do we have to take it to BMW and have it fixed through them?

I would take it to bmw and get it fixed through them, involving insurance company!

While I think it’s important to be aware and knowledgeable of all the various factors (mf, residual, etc...) to determine what you should offer the dealer, in the end doesn't it come down to the bottom line?

Bottom Line = Money down + (# of payments x Amount) + any costs at end of lease?

I'm not a fan of Money Down...so if you negotiate a monthly price x # of payments do you really need to negotiate the variables? Just figure out what "Bottom Line" # is a good deal to you and offer that to the dealer...let them figure out where they want to put their profit....maybe they give you a great Cap Cost and a high MF, or a low MF and a high cap cost....make sense??? (assuming you don't plan on buying the vehicle after the lease ends)

Cheers.

Originally Posted by scotchontherox

While I think it’s important to be aware and knowledgeable of all the various factors (mf, residual, etc...) to determine what you should offer the dealer, in the end doesn't it come down to the bottom line?

Bottom Line = Money down + (# of payments x Amount) + any costs at end of lease?

I'm not a fan of Money Down...so if you negotiate a monthly price x # of payments do you really need to negotiate the variables? Just figure out what "Bottom Line" # is a good deal to you and offer that to the dealer...let them figure out where they want to put their profit....maybe they give you a great Cap Cost and a high MF, or a low MF and a high cap cost....make sense??? (assuming you don't plan on buying the vehicle after the lease ends)

Cheers.

Your offer makes sense as long as you know the numbers if after you run the numbers with acceptable levels of dealer markup (if any) in MF and acquistion fee combined with the amount over invoice you are willing ot accept. Once you find that number for say

1k over invoice
825 acquistion fee
buy rate

then offer them that for a monthly payment is OK, however be on the lookout for other extras.

I always build in an option for the dealer and let them select.

1k over invoice, 625 acquistion, buy rate
800 over invoice, 825 acquistion, buy rate
800 over invoice, 625 acquistion, .0002 mf mark up
600 over invoice, 825 acquistion, .0002 mf mark up

this is an example but the premise is exactly the same.

Random question, and if this has been answered elsewhere on the forum, then I apologize... for ED Leasing, is the end of lease residual calculated on the MSRP of ED or MSRP of US delivery?

Originally Posted by Desiboy

Random question, and if this has been answered elsewhere on the forum, then I apologize... for ED Leasing, is the end of lease residual calculated on the MSRP of ED or MSRP of US delivery?

us msrp.... ED msrp is absolutely meaningless!

Here are a couple of resources:

For Tax & Title Issues

For Good Leasing Information

how does the 7 multiple security deposti work? sorry, I'm a newbie here. I've leased about 4 different cars in the past 5 yrs. sounds like I've been screwed on all of them..

Is there acquisition fee for ED delivery lease? Thanks!

the security deposits basically lower your MF by .00007 for a total of .00049... then at end of lease, you get your money back minus wear and tear which you would have to pay if you didn't have MSD...

good job on the info....

If the buy rate on the e93 for example is .0032 and the dealer is quoting .0035, the dealer is getting .0002 of profit. (or .48% cost of money)

So if I can buy down the rate with 7 deposits by .00049, then I can get the rate from .0035 to .00301. Am I correct? (assuming I can't negotiate the rate any lower than the retail rate).

So instead of paying 8.4 % cost of money (.0035x2400), I pay 7.22% cost of money (.00301x2400) with 7 security deposits.

And that 1.18% interest rate reduction is worth the 7 times deposit increase? (Depends on the opportunity cost of that security deposit money I suspect).

Also, is a 24 month lease generally better or worse than a 36 month lease assuming the same money factor (like on the e93)?

Finally, are the lease (money factors) on the e93 just too high to make sense (.0032 to .0035)? [According to the May lease rate thread] - they seem to be the highest on the list - I suspect it has to do with the demand for the e93 relative to the supply.

If you haven't guessed already, I ordered an e93 and I only negotiated a dollar amount less than MSRP - I haven't decided if I will lease or buy - I could do either, but I would opt for a lease if it is competitive.

If this post is out of bounds please tell me and I'll delete it.

yea...if you can't get the buy rate, then its .00301... there is actually 8 deposits you can do...
the 1st SD actually keeps it from going the standard .00015 if you are a 1st time BMW buyer... then just do the add'l 7 to drop it .00049
and not only is the 1.18 reduction not bad, its the deposit money you get back when your done on the lease...
just found out that the SD is rounded to the higher $50...
the residual is a factor in determining you monthly so you may want the lower residual on a 36 month..
not sure why the MFs are higher on the e93, but your explanation sounds right..
just renegotiate on your order, if they don't budge...go to the ask a dealer thread... the guys on here are pretty good...ask for what you want, and they'll do their best.. I'm currently doing just that..less hassle..

Originally Posted by papitosabe

yea...if you can't get the buy rate, then its .00301... there is actually 8 deposits you can do...
the 1st SD actually keeps it from going the standard .00015 if you are a 1st time BMW buyer... then just do the add'l 7 to drop it .00049
and not only is the 1.18 reduction not bad, its the deposit money you get back when your done on the lease...

Except that I can do a lot better than 1.18% on my money...

A

Originally Posted by andrewket

Except that I can do a lot better than 1.18% on my money...

A

true...or you could pay the car upfront in cash...

the ED wiki didn't really address this point (they did talk generally about issues with financing a ED vehicle) ---- is it possible to use another bank (i.e. not BMW FS) to do the lease ... the monthly payments (via leasecompare) are clearly better elsewhere (largely due to a more reasonable money factor) .... is there a problem with leasing from elsewhere due to European Delivery??

Thanls.

Originally Posted by 5er

is it possible to use another bank (i.e. not BMW FS) to do the lease ... the monthly payments (via leasecompare) are clearly better elsewhere (largely due to a more reasonable money factor) .... is there a problem with leasing from elsewhere due to European Delivery??
Thanls.

The issue is a bank lease cannot be activated until the car is in the States. We are working on a program for this where we would temporarily finance the vehicle until the vehicle arrives.

This needs to be done to save on double taxation.

Originally Posted by LeaseCompare

The issue is a bank lease cannot be activated until the car is in the States. We are working on a program for this where we would temporarily finance the vehicle until the vehicle arrives.

This needs to be done to save on double taxation.

Thanks for the info. Any idea on when this program may be in place? We would be ready to negotiate our leasing/financung once the '08 prices are out (which may be as early as a couple of weeks).

Originally Posted by 5er

Thanks for the info. Any idea on when this program may be in place? We would be ready to negotiate our leasing/financung once the '08 prices are out (which may be as early as a couple of weeks).

It probably will not be until the end of the year. Until then we have been doing a lot of re-leases on EDs once the car arrives in the states.

We pay off your ED lease and write a new one with a better rate.

Teo,

Read your post on leasing guides- question are MACO fees included in the inception/ acquisition fee ($625-$825)