Do i still have to pay taxes on the leased car i just purchased?

Question

I recently purchased a car that i had been leasing. Someone told me that i would have to pay a considerable amount in taxes. Another person said that the taxes should of been paid already. Who do i believe or where can i check? I'm really confused?

Answer 1

When you lease a car, you pay sales tax on the amount the car will depreciate during the term of the lease. For example, if the car is $30,000 to buy but you lease it, and if it's worth $15,000 at the end of the lease, you already paid sales tax on the first $15,000 and would only owe it on the second $15,000.

Answer 2

When you lease a car you are paying sales tax on the lease. However, if you purchase the car you would owe sales tax for the purchase. The difference will not always be the amount of depreciation (depreciation is accelerated and is not the true value of the car).

Hope this helps

Answer 3

It might depend on your state, but the taxes are part of the initial sale... look at your contract and you'll see that your total cost includes lots of fees including sales tax plus dealer fees, plate fees, etc.