[The X Men]

I have a question for someone who is leasing their car. I am try to figure out how to compute the sales tax credit on a trade in, I live in a state where trade in credit is allow and the sales tax is pay on the monthly basis based on monthly payment amount. If my leased value is less than my trade in value, am I correct to say that I would not have to pay any sales tax with my monthly payment?

Thanks

[stephze]

Well, I believe using your trade in for a sales tax credit on a lease is a very bad idea. You almost never want to put money through a trade-in or downpayment to reduce your cap cost for your lease. If something happens to the car, then that money is gone.

The better idea is to do the trade-in as a separate transaction if you are set on not selling privately and using that money to max out your MSDs to lower your money factor (which is refunded to you at the end of lease) and taking the extra money from the trade or sale of the old car and investing it somehow, or just keeping cash on hand.

If you have any questions about that, let us know. There is a wealth of knowledge on leasing in the ask-a-dealer section of the forum.

[The X Men]

Thanks stephze for the info.

[shabadoo25]

My CA says no sales tax reduction.