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I have never leased a vehicle, so I don't understand how it works.
I just watched an item on the news here in Los Angeles, and a consumer who was about to lease a vehicle found that the dealer was charging an exorbitant amount for sales tax.
My question is, why is there a sales tax on a leased vehicle?
The vehicle is being lease (or rented if you will), not bought, so why is there a sales tax?
That would be like me charging a sales tax to all my tenants that rent property from me.
I don't see how the dealers get away with this on a leased vehicle.
The dealer isn't "being allowed to get away with it," they are required to do it. The vehicle is still being sold by the dealer, and thus is subject to sales tax. Homes are not.
02-28-2015, 09:51 PM
i7pXFLbhE3gq
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You pay taxes on the lease payment, not the full value of the vehicle.
It's different from renting because at the end of the lease, you can buy the car for the sale price minus whatever you've paid. So you're not really renting. You're slowly buying with the option to return it after a fixed time.
If a lease were some magical way to get out of paying sales tax, everyone would lease their car and then purchase on the end of the lease, potentially dodging hundreds of dollars in taxes.
But a person who leases a vehicle is NOT buying it, they are leasing it.
Also I don't understand why when you lease a vehicle, you have to have it registered and insured in your name.
You don't own a leased vehicle, the dealer , or leasing agency owns the vehicle.
They should be the one to register, and insure the vehicle.
Why is a vehicle lease any different than a property lease?
A lease is a lease, regardless of what you are leasing.
I have never heard of paying sales tax on anything being leased.
Again, the vehicle is not being bought, it is being leased (rented).
Texas charges sales tax on the entire price of the car. A few others do to.
02-28-2015, 10:03 PM
i7pXFLbhE3gq
n/a posts
Quote:
Originally Posted by CALGUY
But a person who leases a vehicle is NOT buying it, they are leasing it.
Also I don't understand why when you lease a vehicle, you have to have it registered and insured in your name.
You don't own a leased vehicle, the dealer , or leasing agency owns the vehicle.
They should be the one to register, and insure the vehicle.
Why is a vehicle lease any different than a property lease?
A lease is a lease, regardless of what you are leasing.
I have never heard of paying sales tax on anything being leased.
Again, the vehicle is not being bought, it is being leased (rented).
Bob.
You're really unfamiliar with the rent to own concept?
That is what makes a vehicle lease different from say, an apartment lease. An apartment lease does not confer the right to purchase the apartment. A vehicle lease does. Moreover, the payments you make during the lease period reduce the amount you have to fork over should you decide to purchase it.
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