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      01-21-2011, 11:45 AM   #1
bmw_guy_2020
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any tricks to minimizing tax on M3 lease in TX?

Are there any tricks to minimizing taxes on an M3 lease in TX?

When you lease a car in TX I think you are required to pay 6.25% tax on the total price of the car.

I can't think of any workaround for this but I figured if there is a way then this would be the place to find out
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      01-21-2011, 11:49 AM   #2
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Quote:
Originally Posted by bmw_guy_2020 View Post
Are there any tricks to minimizing taxes on an M3 lease in TX?

When you lease a car in TX I think you are required to pay 6.25% tax on the total price of the car.

I can't think of any workaround for this but I figured if there is a way then this would be the place to find out
are you paying the tax b/c you're registering the car in Texas?

If you can register out of state, then you can save on the difference between the two taxes.
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      01-21-2011, 12:15 PM   #3
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Quote:
Originally Posted by mdosu View Post
are you paying the tax b/c you're registering the car in Texas?

If you can register out of state, then you can save on the difference between the two taxes.
That's what I did back in 1996 back in my Army days when I leased a Z3 in Texas... I registered in OK.
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      01-21-2011, 12:18 PM   #4
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In Texas the trick is to use BMWFS "Owner's Choice" financing. Tx is not lease friendly due to the taxes. Owner's choice is a lease "look-alike" financing option with low payments and periods and mileages the same as a lease with a balloon payment at the end. The buyer has the option of just turning the car in at the end. Just assuming a base M3 with $2,500 down (just the default settings on the BMW site) and 36/15k, it shows a lease at $819 while the OC program has payments of $774.
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      01-21-2011, 12:20 PM   #5
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Quote:
Originally Posted by Jones View Post
The buyer has the option of just turning the car in at the end.
even if the market value for the car is less than the balloon?
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      01-21-2011, 12:47 PM   #6
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Originally Posted by joelk View Post
even if the market value for the car is less than the balloon?
Yes, there's a pre-determined buy-back price which is essentially just like the lease residual. There are three choices, sell the car back to BMW (at the "residual" price), pay the balloon payment, or refinance the balloon payment.

Just to be clear, the OC program is only available in TX and Illinois

Last edited by Jones; 01-21-2011 at 12:56 PM..
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      01-21-2011, 03:21 PM   #7
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9.8% in Washington State
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      01-21-2011, 03:26 PM   #8
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Originally Posted by tukluc View Post
9.8% in Washington State
On a lease, too?

0% tax in Oregon.
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      01-21-2011, 05:48 PM   #9
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Quote:
Originally Posted by GregW / Oregon View Post
On a lease, too?

0% tax in Oregon.
I would think so....its just factored into your monthly payment.

As for 0% in Oregon...you guys pay a State Income Tax...we don't. They get you one way or the other
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      01-21-2011, 05:55 PM   #10
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Quote:
Originally Posted by Jones View Post
In Texas the trick is to use BMWFS "Owner's Choice" financing. Tx is not lease friendly due to the taxes. Owner's choice is a lease "look-alike" financing option with low payments and periods and mileages the same as a lease with a balloon payment at the end. The buyer has the option of just turning the car in at the end. Just assuming a base M3 with $2,500 down (just the default settings on the BMW site) and 36/15k, it shows a lease at $819 while the OC program has payments of $774.
Is this different than BMW Select? That's baloon financing too, but you're buying the car. You HAVE to pay the baloon amount at the end of the term and you HAVE to keep the car (well, unless you traded it).
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      01-21-2011, 07:55 PM   #11
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Quote:
Originally Posted by Technic View Post
That's what I did back in 1996 back in my Army days when I leased a Z3 in Texas... I registered in OK.
Technic - I think to get a TX license plate you have to register your car in TX right? So how were you able to get a TX license plate with your car registered in OK?
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      01-21-2011, 07:59 PM   #12
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Quote:
Originally Posted by Jones View Post
In Texas the trick is to use BMWFS "Owner's Choice" financing. Tx is not lease friendly due to the taxes. Owner's choice is a lease "look-alike" financing option with low payments and periods and mileages the same as a lease with a balloon payment at the end. The buyer has the option of just turning the car in at the end. Just assuming a base M3 with $2,500 down (just the default settings on the BMW site) and 36/15k, it shows a lease at $819 while the OC program has payments of $774.
Can you point me to a good url or thread discussing the pros, cons and caveats of "Owner's Choice"?

I'm assuming the residual and money factor are the same as a lease. So how can the final payment be $50 less than a lease? I'm just asking because I'm only familiar with leasing....
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      01-21-2011, 08:25 PM   #13
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Ok - I found a url describing OwnersChoice:

http://fs.bmwusa.com/BmwFsPulp/VEHCHO_OwnersChoice.htm

These are the end of term options listed on the website:

1. Get a new BMW and sell your BMW back to us at a predetermined price.
2. Refinance the balloon payment amount.
3. Complete your purchase by making the balloon payment.

Option #1 seems closest to what I'd want - at the end of my lease I want to be able to turn in the vehicle to get rid of it.

However - the semantics of option #1 appear to be somewhat unclear:

"Get a new BMW and sell your BMW back to us at a predetermined price."

Based on this wording it could be construed that you can sell back the car at the predetermined price ***only if*** you purchase a new BMW to replace it with.

I would not want to be locked into buying another BMW. I would want the option of leasing a different make at the end of my lease term.

Can anyone here speak from experience on this?
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