Yes! You Can Lease That Luxury Car For Less
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We have all seen the advertisements for high-end luxury cars for lease payments that will shock how. How is it possible that a BMW, Mercedes, or Lexus can stay in business when the lease price is about the same as payments when you buy a Ford or Chevrolet? We will let you into some of the secrets in the car lease industry as to why it is possible to find such great car lease deals online and in person.
Sales Tax
One of the reasons car lease payments are so much less, especially on high-end vehicles, is that the sales tax is far less when you lease. How can this be?
Well, it’s simple really, a sales tax is a tax on the value of your purchase. In New York, for example, there is a 4% sales tax on cars. This means if you buy a $30,000 Honda in New York you will be paying about $1,200 in sales tax.
However, when you lease a car, the sales tax is only on the value of the purchase during the years that you are leasing it. Most car leases are between 2-4 years, So you are only paying a fraction of the sales tax since you are not responsible for the total cost of the car.
Let’s see an example: if you lease a car for 4 years, at $400 per month (which can get you a very nice car). At the end of the 4 years, you will only have paid about $768 in sales tax, now compare that to the $1,200 when buying.
Residual Value
Residual value is the single greatest contributor to the cost of a car lease. Residual value is also why expensive high-end luxury cars are so reasonable when leasing compared to buying.
Residual value is the expected value of an item (in this case the car) at the end of a certain period (the car lease term).
Since high-end cars hold their value for many years since they are made well and will drive for many miles, the depreciation value (how much it loses its value) is not a lot. This is a huge benefit to both the leaser holder and the car lease company. You enjoy the benefits of a lower lease price, and at the end of the lease the car still has value, so you can either purchase it for a discounted price, or the leasing company can still have a chance to resell the car before more time passes.
Let’s see an example: Say, a Lexus costs $50,000. And at the end of the 4 years lease, it will be worth $30,000 (the residual value). That means the depreciation is $20,000.
So generally speaking that $20,000 is what determines your lease price, so divide that by the 4 years of the lease, and your payments will be roughly $400 per month.
To contrast: if you wanted to buy that same $50k Lexus and finance it over 5 years. Your payments would be about $800+ per month, double!
Now you can lease a high-end vehicle or any vehicle you want without paying a fortune:
VIP Auto Lease of Queens 139-46 Queens Blvd, Jamaica, NY 11435 (347) 384-7214 https://viplease.com/jamaica-ny-office/
