2008 IS250 Manheim Auction Prices
#1
Racer
Thread Starter
2008 IS250 Manheim Auction Prices
Does anyone have access to recent Manheim Auction prices on a 2008 IS250 in the mid Atlantic area?
I am trying to get a basis for the trade-in value - I realize it varies by state and dealer. I will be coming off my lease in Sept and I am considering trading it in on a 2010 C63 AMG vs trying to sell it in the open market. My IS is a manual transmission with G Spyders, sunroof, non-nav w/21k mi.
I am trying to get a basis for the trade-in value - I realize it varies by state and dealer. I will be coming off my lease in Sept and I am considering trading it in on a 2010 C63 AMG vs trying to sell it in the open market. My IS is a manual transmission with G Spyders, sunroof, non-nav w/21k mi.
#2
Instructor
Does anyone have access to recent Manheim Auction prices on a 2008 IS250 in the mid Atlantic area?
I am trying to get a basis for the trade-in value - I realize it varies by state and dealer. I will be coming off my lease in Sept and I am considering trading it in on a 2010 C63 AMG vs trying to sell it in the open market. My IS is a manual transmission with G Spyders, sunroof, non-nav w/21k mi.
I am trying to get a basis for the trade-in value - I realize it varies by state and dealer. I will be coming off my lease in Sept and I am considering trading it in on a 2010 C63 AMG vs trying to sell it in the open market. My IS is a manual transmission with G Spyders, sunroof, non-nav w/21k mi.
You said you are leasing the IS, you have no equity in it, at the end of the lease you turn it in and walk away.
#3
Racer
Thread Starter
I am considering a trade for a few reasons. 1) I have a relatively low residual value so if the offer from the dealer is at or slightly above the "buy-out" price I can get out of the lease now vs waiting until Oct 2010. 2) There is a tax benefit in my state when trading in a vehicle - I only pay 6% sales tax on the difference vs on the full purchase price, which equates to roughly $1300 in tax savings on a C63. 3) I am impatient. I drove the AMG last weekend and I want it, coupled with the fact I can get a VERY good price on a new one right now (below invoice), which includes an added incentive of $1500 towards options, which expires March 31st.
Last edited by cssnms; 03-24-10 at 07:21 AM.
#4
Instructor
I am considering a trade for a few reasons. 1) I have a relatively low residual value so if the offer from the dealer is at or slightly above the "buy-out" price I can get out of the lease now vs waiting until Oct 2010.
A dealer will usually offer you trade in value, your buyout is usually somewhere around market value. Maybe you're lucky with yours. Check KBB for current values and then check Lexus Financial (or whoever your lease company is)for your current buyout to get an idea of what to expect.
Quite often Lexus will give you the last 3-6months of your lease to move you into a new Lexus early. Something to think about.
2) There is a tax benefit in my state when trading in a vehicle - I only pay 6% sales tax on the difference vs on the full purchase price, which equates to roughly $1300 in tax savings on a C63
You are going to pay the sales tax on the balance of the car price if you buy it out. So there is no tax savings or they are negligible if your buy-out is low enough
. 3) I am impatient, I drove the AMG last weekend and I want it, coupled with the fact I can get a VERY good price on a new one right now (below invoice) with an added option incentive of $1500 which expires March 31st.
I just swappped out 2 cars this year an SC and an IS. In both cases the DEALER bought out my lease (which was market value) and put me in a new vehicle. One dealer was Porsche w/ 1.9% financing the other 2 weeks ago put me in a new IS250AWD for $10/mo less than my old lease on an '07
A dealer will usually offer you trade in value, your buyout is usually somewhere around market value. Maybe you're lucky with yours. Check KBB for current values and then check Lexus Financial (or whoever your lease company is)for your current buyout to get an idea of what to expect.
Quite often Lexus will give you the last 3-6months of your lease to move you into a new Lexus early. Something to think about.
2) There is a tax benefit in my state when trading in a vehicle - I only pay 6% sales tax on the difference vs on the full purchase price, which equates to roughly $1300 in tax savings on a C63
You are going to pay the sales tax on the balance of the car price if you buy it out. So there is no tax savings or they are negligible if your buy-out is low enough
. 3) I am impatient, I drove the AMG last weekend and I want it, coupled with the fact I can get a VERY good price on a new one right now (below invoice) with an added option incentive of $1500 which expires March 31st.
I just swappped out 2 cars this year an SC and an IS. In both cases the DEALER bought out my lease (which was market value) and put me in a new vehicle. One dealer was Porsche w/ 1.9% financing the other 2 weeks ago put me in a new IS250AWD for $10/mo less than my old lease on an '07
#5
Racer
Thread Starter
I am considering a trade for a few reasons. 1) I have a relatively low residual value so if the offer from the dealer is at or slightly above the "buy-out" price I can get out of the lease now vs waiting until Oct 2010.
A dealer will usually offer you trade in value, your buyout is usually somewhere around market value. Maybe you're lucky with yours. Check KBB for current values and then check Lexus Financial (or whoever your lease company is)for your current buyout to get an idea of what to expect.
I understand all of that, I've been through this process just a few times already, I also worked in the industry. The residual value on my car is below what you call "market value." KBB is useless and no indication of what a dealer will offer nor do most dealer's reference it. Auction prices are the best basis for what a dealer might be willing to offer on a trade. The dealer is not going to offer to buy a vehicle at trade above what they can buy the same vehicle at auction for, unless they are making enough on the new car sale - although there are exceptions.
Quite often Lexus will give you the last 3-6months of your lease to move you into a new Lexus early. Something to think about.
Not interested in another Lexus
2) There is a tax benefit in my state when trading in a vehicle - I only pay 6% sales tax on the difference vs on the full purchase price, which equates to roughly $1300 in tax savings on a C63
You are going to pay the sales tax on the balance of the car price if you buy it out. So there is no tax savings or they are negligible if your buy-out is low enough
I am not sure I understand what you are saying.... YES, there is a sales tax benefit in the state of MD when it comes to trading in a vehicle. Sales tax is based on the difference between the new car purchase price and the trade-in value. Let's say I bought a car for $40k and the dealer gave me $20k at trade-in, I pay sales tax on $20k ($1200) instead of on the full $40k ($2400) a savings of $1200. Even if the dealers offer is slightly under my buy-out it might still make economic sense to do the deal if there is enough padding in the tax savings. Sure I could buy my IS out right and pay the sales tax on the buy-out price, but buying my IS250 and paying sales tax to do so is not my objective. Lastly, if I turned the vehicle back in to Lexus at the end of my lease in order for me to get into the Merc or any other car for that matter, I would end up paying sales tax on the full purchase price.
. 3) I am impatient, I drove the AMG last weekend and I want it, coupled with the fact I can get a VERY good price on a new one right now (below invoice) with an added option incentive of $1500 which expires March 31st.
I just swappped out 2 cars this year an SC and an IS. In both cases the DEALER bought out my lease (which was market value) and put me in a new vehicle. One dealer was Porsche w/ 1.9% financing the other 2 weeks ago put me in a new IS250AWD for $10/mo less than my old lease on an '07
That's encouraging to hear. Given the economy I think dealers are incentivized to move new car inventory even if it means they may break even on a trade. We'll see...
A dealer will usually offer you trade in value, your buyout is usually somewhere around market value. Maybe you're lucky with yours. Check KBB for current values and then check Lexus Financial (or whoever your lease company is)for your current buyout to get an idea of what to expect.
I understand all of that, I've been through this process just a few times already, I also worked in the industry. The residual value on my car is below what you call "market value." KBB is useless and no indication of what a dealer will offer nor do most dealer's reference it. Auction prices are the best basis for what a dealer might be willing to offer on a trade. The dealer is not going to offer to buy a vehicle at trade above what they can buy the same vehicle at auction for, unless they are making enough on the new car sale - although there are exceptions.
Quite often Lexus will give you the last 3-6months of your lease to move you into a new Lexus early. Something to think about.
Not interested in another Lexus
2) There is a tax benefit in my state when trading in a vehicle - I only pay 6% sales tax on the difference vs on the full purchase price, which equates to roughly $1300 in tax savings on a C63
You are going to pay the sales tax on the balance of the car price if you buy it out. So there is no tax savings or they are negligible if your buy-out is low enough
I am not sure I understand what you are saying.... YES, there is a sales tax benefit in the state of MD when it comes to trading in a vehicle. Sales tax is based on the difference between the new car purchase price and the trade-in value. Let's say I bought a car for $40k and the dealer gave me $20k at trade-in, I pay sales tax on $20k ($1200) instead of on the full $40k ($2400) a savings of $1200. Even if the dealers offer is slightly under my buy-out it might still make economic sense to do the deal if there is enough padding in the tax savings. Sure I could buy my IS out right and pay the sales tax on the buy-out price, but buying my IS250 and paying sales tax to do so is not my objective. Lastly, if I turned the vehicle back in to Lexus at the end of my lease in order for me to get into the Merc or any other car for that matter, I would end up paying sales tax on the full purchase price.
. 3) I am impatient, I drove the AMG last weekend and I want it, coupled with the fact I can get a VERY good price on a new one right now (below invoice) with an added option incentive of $1500 which expires March 31st.
I just swappped out 2 cars this year an SC and an IS. In both cases the DEALER bought out my lease (which was market value) and put me in a new vehicle. One dealer was Porsche w/ 1.9% financing the other 2 weeks ago put me in a new IS250AWD for $10/mo less than my old lease on an '07
That's encouraging to hear. Given the economy I think dealers are incentivized to move new car inventory even if it means they may break even on a trade. We'll see...
Last edited by cssnms; 03-24-10 at 08:13 AM.
#6
Instructor
There is a sales tax benefit here in CT as well.
It applies when you trade in a vehicle you own. The value of the vehicle is deducted from the price of the new car and you pay the sales tax on the difference.
But you own nothing on a lease. There is nothing to trade in. If you buy out your lease you will pay sales tax on the buy out price of the car. If you then turn around and immediately trade it in yes you will get the tax reduction on the new car, but since you just paid the tax on the purchase where is the advantage, it is not real.
when I traded in the SC430 and picked up the Porsche the dealer bought the car - from the lease company not me - and I had to pay sales tax on the price of the Boxster. If I had bought out the lease on the SC430 I would have had to pay the sales tax on the purchase, and then if I had immediately traded it in for the Porsche I would have gotten the sales tax reduction but there are no real savings since I just paid a sales tax on the SC.
The IS was simple no sales tax consequences since it was lease to lease.
But I also just traded my wife's '02 ES300 (yeah I did 3 cars in a year), we owned this one. The dealer didn't really want an '02 since thay can't certify it. I brought up the sales tax reduction I would lose if I did a private sale and in the end they took the trade.
It applies when you trade in a vehicle you own. The value of the vehicle is deducted from the price of the new car and you pay the sales tax on the difference.
But you own nothing on a lease. There is nothing to trade in. If you buy out your lease you will pay sales tax on the buy out price of the car. If you then turn around and immediately trade it in yes you will get the tax reduction on the new car, but since you just paid the tax on the purchase where is the advantage, it is not real.
when I traded in the SC430 and picked up the Porsche the dealer bought the car - from the lease company not me - and I had to pay sales tax on the price of the Boxster. If I had bought out the lease on the SC430 I would have had to pay the sales tax on the purchase, and then if I had immediately traded it in for the Porsche I would have gotten the sales tax reduction but there are no real savings since I just paid a sales tax on the SC.
The IS was simple no sales tax consequences since it was lease to lease.
But I also just traded my wife's '02 ES300 (yeah I did 3 cars in a year), we owned this one. The dealer didn't really want an '02 since thay can't certify it. I brought up the sales tax reduction I would lose if I did a private sale and in the end they took the trade.
Last edited by EJC; 03-24-10 at 09:38 AM.
#7
Racer
Thread Starter
Either I am misunderstanding you or you are missing my point... What I am trying to convey is,,, it doesn't matter whether someone leases the vehicle or has a loan through the bank on the vehicle, that person can trade in the vehicle on a new car purchase assuming the dealer is willing to pay enough to off-set what is owed to the bank or in this case Lexus Financial. I don't have to buy the vehicle from Lexus before I can sell it to the dealer - the bank doesn't care who strokes the check.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
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#8
Lexus Champion
Either I am misunderstanding you or you are missing my point... What I am trying to convey is,,, it doesn't matter whether someone leases the vehicle or has a loan through the bank on the vehicle, that person can trade in the vehicle on a new car purchase assuming the dealer is willing to pay enough to off-set what is owed to the bank or in this case Lexus Financial. I don't have to buy the vehicle from Lexus before I can sell it to the dealer - the bank doesn't care who strokes the check.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
When you buy a car, and take out a loan, you own it, but subject to the bank's lien for the unpaid balance of the loan. As with most other states, when you trade in, the dealer takes the trade in value off the top, and you pay the sales tax on the difference.
I don't see how you do this with a lease--the finance company owns the car, and you lease it from them for a period of time. At the end of the lease, you either (1) give it back or (2) buy it at the residual price, plus sales tax on the residual price. In order for you to "trade" that car in, you must first own it--meaning you have to buy it from the finance company for the residual price + tax. Therefore, you have no sales tax savings because you paid Lexus Financial sales tax to buy the car from them. This is one of the reasons that people lease cars. The dealer doesn't want to "buy" your car from Lexus Financial--then they have to get rid of it. They might "buy out" the remainder of your lease, as a convenience, to get you into a new car.
#9
Instructor
I hope things work differently in MD.
In CT, I am paying a monthly sales tax on the lease payment. No upfront sales tax on the car. Should I want to turn in the car early, I have no equity in the car. The dealer buys out the lease there is nothing that will be credited to the purchase of a new vehicle because I owned nothing the lease buyout was between the Dealer and the Lease company.
Wish you luck
In CT, I am paying a monthly sales tax on the lease payment. No upfront sales tax on the car. Should I want to turn in the car early, I have no equity in the car. The dealer buys out the lease there is nothing that will be credited to the purchase of a new vehicle because I owned nothing the lease buyout was between the Dealer and the Lease company.
Wish you luck
Either I am misunderstanding you or you are missing my point... What I am trying to convey is,,, it doesn't matter whether someone leases the vehicle or has a loan through the bank on the vehicle, that person can trade in the vehicle on a new car purchase assuming the dealer is willing to pay enough to off-set what is owed to the bank or in this case Lexus Financial. I don't have to buy the vehicle from Lexus before I can sell it to the dealer - the bank doesn't care who strokes the check.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
In MD it doesn't matter if I "own" the vehicle outright or whether the bank owns the vehicle through a loan or a lease. The dealer can buy the vehicle outright from the bank. More importantly, regardless of what the loan balance or lease buy-out amount is, the sales tax paid on a new vehicle purchase when there is a trade-in is calculated on the difference between the amount the dealer pays for the trade (regardless of what is owed) and the sales price of the new car. There's nothing else to it.
#10
Instructor
This makes no sense to me. MD has some funky system, if it's true.
When you buy a car, and take out a loan, you own it, but subject to the bank's lien for the unpaid balance of the loan. As with most other states, when you trade in, the dealer takes the trade in value off the top, and you pay the sales tax on the difference.
I don't see how you do this with a lease--the finance company owns the car, and you lease it from them for a period of time. At the end of the lease, you either (1) give it back or (2) buy it at the residual price, plus sales tax on the residual price. In order for you to "trade" that car in, you must first own it--meaning you have to buy it from the finance company for the residual price + tax. Therefore, you have no sales tax savings because you paid Lexus Financial sales tax to buy the car from them. This is one of the reasons that people lease cars. The dealer doesn't want to "buy" your car from Lexus Financial--then they have to get rid of it. They might "buy out" the remainder of your lease, as a convenience, to get you into a new car.
When you buy a car, and take out a loan, you own it, but subject to the bank's lien for the unpaid balance of the loan. As with most other states, when you trade in, the dealer takes the trade in value off the top, and you pay the sales tax on the difference.
I don't see how you do this with a lease--the finance company owns the car, and you lease it from them for a period of time. At the end of the lease, you either (1) give it back or (2) buy it at the residual price, plus sales tax on the residual price. In order for you to "trade" that car in, you must first own it--meaning you have to buy it from the finance company for the residual price + tax. Therefore, you have no sales tax savings because you paid Lexus Financial sales tax to buy the car from them. This is one of the reasons that people lease cars. The dealer doesn't want to "buy" your car from Lexus Financial--then they have to get rid of it. They might "buy out" the remainder of your lease, as a convenience, to get you into a new car.
#11
Lexus Champion
#12
Racer
Thread Starter
I hope things work differently in MD.
In CT, I am paying a monthly sales tax on the lease payment. No upfront sales tax on the car. Should I want to turn in the car early, I have no equity in the car. The dealer buys out the lease there is nothing that will be credited to the purchase of a new vehicle because I owned nothing the lease buyout was between the Dealer and the Lease company.
Wish you luck
In CT, I am paying a monthly sales tax on the lease payment. No upfront sales tax on the car. Should I want to turn in the car early, I have no equity in the car. The dealer buys out the lease there is nothing that will be credited to the purchase of a new vehicle because I owned nothing the lease buyout was between the Dealer and the Lease company.
Wish you luck
You are getting hung up on terminology like "owning" and "leasing" etc, which has nothing to do with how the state tax law assesses sales tax on a vehicle trade. Like I said before, the MD tax law will only assess sales tax on the difference between the "trade in value" and the "new car purchase price." I don't know how to better explain it.
Last edited by cssnms; 03-24-10 at 12:26 PM.
#13
Racer
Thread Starter
This makes no sense to me. MD has some funky system, if it's true.
When you buy a car, and take out a loan, you own it, but subject to the bank's lien for the unpaid balance of the loan. As with most other states, when you trade in, the dealer takes the trade in value off the top, and you pay the sales tax on the difference.
I don't see how you do this with a lease--the finance company owns the car, and you lease it from them for a period of time. At the end of the lease, you either (1) give it back or (2) buy it at the residual price, plus sales tax on the residual price. In order for you to "trade" that car in, you must first own it--meaning you have to buy it from the finance company for the residual price + tax. Therefore, you have no sales tax savings because you paid Lexus Financial sales tax to buy the car from them. This is one of the reasons that people lease cars. The dealer doesn't want to "buy" your car from Lexus Financial--then they have to get rid of it. They might "buy out" the remainder of your lease, as a convenience, to get you into a new car.
When you buy a car, and take out a loan, you own it, but subject to the bank's lien for the unpaid balance of the loan. As with most other states, when you trade in, the dealer takes the trade in value off the top, and you pay the sales tax on the difference.
I don't see how you do this with a lease--the finance company owns the car, and you lease it from them for a period of time. At the end of the lease, you either (1) give it back or (2) buy it at the residual price, plus sales tax on the residual price. In order for you to "trade" that car in, you must first own it--meaning you have to buy it from the finance company for the residual price + tax. Therefore, you have no sales tax savings because you paid Lexus Financial sales tax to buy the car from them. This is one of the reasons that people lease cars. The dealer doesn't want to "buy" your car from Lexus Financial--then they have to get rid of it. They might "buy out" the remainder of your lease, as a convenience, to get you into a new car.
Secondly, the leasee does not PERSONALLY have to buy the vehicle from the bank in order to trade it in on a new car prior to the lease expiration date, just as the same would be true if I decided to sell the vehicle on the private market. The dealer will cut the check and the title will be signed over by the financial institution to the dealer, just as the case would be if I sold the vehicle to a private individual. In the case of the latter, the private individual would pay sales tax in the state they register their vehicle in.
The MD law is designed to protect the consumer from double paying sales tax. I paid sales tax in full the day I signed my lease. If I bought my car outright I would NOT have to pay it again - otherwise that would be called double taxation. Essentially what the state of MD is doing is giving the borrower/leasee of a vehicle credit for the sales tax that they already paid on that vehicle towards the purchase of a new vehicle.
As for leasing, people lease cars because customers are interested in driving a new vehicle they likely otherwise couldn't afford. Leasing provides for a lower monthly payment with less money down then if the borrower financed the vehicle. That monthly rate is dictated by the underwritten interest rate, the residual value of the vehicle and the amount of the cap cost reduction. Fortunately, my vehicle and Lexus vehicles in general have a very low residual value, which affords the leasee the option of selling the vehicle or hopefully benefiting on a trade-in on a new vehicle.
Conceptually speaking, tell me, what is the difference between whether I owe Bank of America $15k for a 2008 Honda Civic or I owe Honda Financial through a lease $15k for a 2008 Honda Civic? I would like to say I own my house too, but I don't, I rent it from the bank with the goal of one day owning it, but in all likelyhood I will sell it long before that happens and I can only hope that RE values rebound enough so that I can walk away with some equity to put down on the next home I will rent from the bank.
Last edited by cssnms; 03-24-10 at 12:28 PM.
#14
Instructor
When you take out a loan, you own "nothing" unless you put equity into the car in the form of a down payment and even then you technically "own" nothing. If you default on your loan the bank will take the car you are borrowing backed by their credit. You may or may not get that equity back when you sell or attempt to trade in a vehicle. The bank holds the title just as the bank holds the title of a leased vehicle.
You OWN the vehicle, subject to a lien, if you default whether or not you receive anything depends on what the bank can liquidate it for. A house will work the same way.
Secondly, the leasee does not PERSONALLY have to buy the vehicle from the bank in order to trade it in on a new car prior to the lease expiration date, just as the same would be true if I decided to sell the vehicle on the private market. The dealer will cut the check and the title will be signed over by the financial institution to the dealer, just as the case would be if I sold the vehicle to a private individual. In the case of the latter, the private individual would pay sales tax in the state they register their vehicle in.
The MD law is designed to protect the consumer from double paying sales tax. I paid sales tax in full the day I signed my lease. If I bought my car outright I would NOT have to pay it again - otherwise that would be called double taxation. Essentially what the state of MD is doing is giving the borrower/leasee of a vehicle credit for the sales tax that they already paid on that vehicle towards the purchase of a new vehicle.
I asked if MD has you pay sales tax up front on the whole vehicle price. You didn't answer. This would indicate that MD leasing is different. You paid ~$2400 up front in sales tax for the car.
Most of us pay sales tax on the monthly payment instead, rather than up front at lease inception. So my $500/mo includes 6% for sales tax. At the end of lease I'd pay sales tax on the buy out if I bought it.
As for leasing, people lease cars because customers are interested in driving a new vehicle that traditionally provides a lower monthly payment with less money down then if they financed the vehicle. That monthly rate is dictated by the underwritten interest rate and the residual value of the vehicle. Fortunately, my vechile and Lexus vehicles in general have a very low residual value, which affords the leasee the option of selling the vehicle or hopefully benefiting on a trade-in on a new vehicle.
???? up here one of the virtues of leasing was a high residual which keeps the monthly lower. At least in CT Lexus has a nice high resale/residual value ?????
You OWN the vehicle, subject to a lien, if you default whether or not you receive anything depends on what the bank can liquidate it for. A house will work the same way.
Secondly, the leasee does not PERSONALLY have to buy the vehicle from the bank in order to trade it in on a new car prior to the lease expiration date, just as the same would be true if I decided to sell the vehicle on the private market. The dealer will cut the check and the title will be signed over by the financial institution to the dealer, just as the case would be if I sold the vehicle to a private individual. In the case of the latter, the private individual would pay sales tax in the state they register their vehicle in.
The MD law is designed to protect the consumer from double paying sales tax. I paid sales tax in full the day I signed my lease. If I bought my car outright I would NOT have to pay it again - otherwise that would be called double taxation. Essentially what the state of MD is doing is giving the borrower/leasee of a vehicle credit for the sales tax that they already paid on that vehicle towards the purchase of a new vehicle.
I asked if MD has you pay sales tax up front on the whole vehicle price. You didn't answer. This would indicate that MD leasing is different. You paid ~$2400 up front in sales tax for the car.
Most of us pay sales tax on the monthly payment instead, rather than up front at lease inception. So my $500/mo includes 6% for sales tax. At the end of lease I'd pay sales tax on the buy out if I bought it.
As for leasing, people lease cars because customers are interested in driving a new vehicle that traditionally provides a lower monthly payment with less money down then if they financed the vehicle. That monthly rate is dictated by the underwritten interest rate and the residual value of the vehicle. Fortunately, my vechile and Lexus vehicles in general have a very low residual value, which affords the leasee the option of selling the vehicle or hopefully benefiting on a trade-in on a new vehicle.
???? up here one of the virtues of leasing was a high residual which keeps the monthly lower. At least in CT Lexus has a nice high resale/residual value ?????
#15
Racer
Thread Starter
When you take out a loan, you own "nothing" unless you put equity into the car in the form of a down payment and even then you technically "own" nothing. If you default on your loan the bank will take the car you are borrowing backed by their credit. You may or may not get that equity back when you sell or attempt to trade in a vehicle. The bank holds the title just as the bank holds the title of a leased vehicle.
You OWN the vehicle, subject to a lien, if you default whether or not you receive anything depends on what the bank can liquidate it for. A house will work the same way.
Tell me about it, I work for a bank and I've been through the process just a few times from the perspective of the note holder. If you "own" it the bank could not take it from you and you would have a piece of paper called a Title or a Deed that is unincumbered with your name on it. If you have a loan on property as far as the court of law is concerned, you own "nothing," you have very little rights. Try telling the judge you "own" the car even though the bank holds the title. Furthermore, if the property is foreclosed on or reposesed - take your pick, you will get nothing when the property is liquidated and you will have NO say in the final sales price. The bank does not care about your interest or your equity. The bank holds the title and they will reposes the property and sell it for what is owed on it and usually for nothing more and in most cases it's sells for less, so the bank takes a loss and writes off the difference. As far as a lien goes, simply put, a lien is not indicative of ownership, it only means there is a party that has claim to the property in the event of sale. As an e.g. a contracter can lien a piece of RE although they are subordenant to the lender. That means if the property is sold, the lender is paid first and if there is anything leftover the contractor might receive a piece to off-set what they are due. Sorry, I digress..... A.D.D. I guess
Secondly, the leasee does not PERSONALLY have to buy the vehicle from the bank in order to trade it in on a new car prior to the lease expiration date, just as the same would be true if I decided to sell the vehicle on the private market. The dealer will cut the check and the title will be signed over by the financial institution to the dealer, just as the case would be if I sold the vehicle to a private individual. In the case of the latter, the private individual would pay sales tax in the state they register their vehicle in.
The MD law is designed to protect the consumer from double paying sales tax. I paid sales tax in full the day I signed my lease. If I bought my car outright I would NOT have to pay it again - otherwise that would be called double taxation. Essentially what the state of MD is doing is giving the borrower/leasee of a vehicle credit for the sales tax that they already paid on that vehicle towards the purchase of a new vehicle.
I asked if MD has you pay sales tax up front on the whole vehicle price. You didn't answer. This would indicate that MD leasing is different. You paid ~$2400 up front in sales tax for the car.
Most of us pay sales tax on the monthly payment instead, rather than up front at lease inception. So my $500/mo includes 6% for sales tax. At the end of lease I'd pay sales tax on the buy out if I bought it.
Okay, perhaps I missed that question. So I think we have an understanding here regarding the sales tax process in MD
As for leasing, people lease cars because customers are interested in driving a new vehicle that traditionally provides a lower monthly payment with less money down then if they financed the vehicle. That monthly rate is dictated by the underwritten interest rate and the residual value of the vehicle. Fortunately, my vechile and Lexus vehicles in general have a very low residual value, which affords the leasee the option of selling the vehicle or hopefully benefiting on a trade-in on a new vehicle.
???? up here one of the virtues of leasing was a high residual which keeps the monthly lower. At least in CT Lexus has a nice high resale/residual value ?????
Apologies, I misspoke, that is correct, regarding residual value.... What I meant to say is, my vehicle has a low lease end buy-out value and in general the lease end buy-out value on Lexus vehicles is low and below the FMV for the car.
You OWN the vehicle, subject to a lien, if you default whether or not you receive anything depends on what the bank can liquidate it for. A house will work the same way.
Tell me about it, I work for a bank and I've been through the process just a few times from the perspective of the note holder. If you "own" it the bank could not take it from you and you would have a piece of paper called a Title or a Deed that is unincumbered with your name on it. If you have a loan on property as far as the court of law is concerned, you own "nothing," you have very little rights. Try telling the judge you "own" the car even though the bank holds the title. Furthermore, if the property is foreclosed on or reposesed - take your pick, you will get nothing when the property is liquidated and you will have NO say in the final sales price. The bank does not care about your interest or your equity. The bank holds the title and they will reposes the property and sell it for what is owed on it and usually for nothing more and in most cases it's sells for less, so the bank takes a loss and writes off the difference. As far as a lien goes, simply put, a lien is not indicative of ownership, it only means there is a party that has claim to the property in the event of sale. As an e.g. a contracter can lien a piece of RE although they are subordenant to the lender. That means if the property is sold, the lender is paid first and if there is anything leftover the contractor might receive a piece to off-set what they are due. Sorry, I digress..... A.D.D. I guess
Secondly, the leasee does not PERSONALLY have to buy the vehicle from the bank in order to trade it in on a new car prior to the lease expiration date, just as the same would be true if I decided to sell the vehicle on the private market. The dealer will cut the check and the title will be signed over by the financial institution to the dealer, just as the case would be if I sold the vehicle to a private individual. In the case of the latter, the private individual would pay sales tax in the state they register their vehicle in.
The MD law is designed to protect the consumer from double paying sales tax. I paid sales tax in full the day I signed my lease. If I bought my car outright I would NOT have to pay it again - otherwise that would be called double taxation. Essentially what the state of MD is doing is giving the borrower/leasee of a vehicle credit for the sales tax that they already paid on that vehicle towards the purchase of a new vehicle.
I asked if MD has you pay sales tax up front on the whole vehicle price. You didn't answer. This would indicate that MD leasing is different. You paid ~$2400 up front in sales tax for the car.
Most of us pay sales tax on the monthly payment instead, rather than up front at lease inception. So my $500/mo includes 6% for sales tax. At the end of lease I'd pay sales tax on the buy out if I bought it.
Okay, perhaps I missed that question. So I think we have an understanding here regarding the sales tax process in MD
As for leasing, people lease cars because customers are interested in driving a new vehicle that traditionally provides a lower monthly payment with less money down then if they financed the vehicle. That monthly rate is dictated by the underwritten interest rate and the residual value of the vehicle. Fortunately, my vechile and Lexus vehicles in general have a very low residual value, which affords the leasee the option of selling the vehicle or hopefully benefiting on a trade-in on a new vehicle.
???? up here one of the virtues of leasing was a high residual which keeps the monthly lower. At least in CT Lexus has a nice high resale/residual value ?????
Apologies, I misspoke, that is correct, regarding residual value.... What I meant to say is, my vehicle has a low lease end buy-out value and in general the lease end buy-out value on Lexus vehicles is low and below the FMV for the car.
Last edited by cssnms; 03-24-10 at 01:14 PM.