02-19-2020, 10:59 AM | #1 |
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Trade vs MSD on a Lease
Hi,
I'm looking at leasing an m340i. We have an older trade that I expected the dealer to low-ball, but they appraised it at a higher value than I expected to get, and probably high enough that it's not worth the effort to try to sell it myself. (Weird, I know!). I know people don't recommend putting unnecessary down payments on leases. Is it possible (and does it make sense) to apply trade proceeds to MSDs? Do you loose the sales tax advantage of the trade doing that? (I'm in TX, where we pay sales tax on the entire sales price even for a lease.) |
02-19-2020, 11:11 AM | #2 |
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MSDs are refundable at the end of the term so there's little worry about using your money for that. Paying extra for cap cost reduction is the big no-no.
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02-19-2020, 11:31 AM | #3 |
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02-19-2020, 02:15 PM | #7 |
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Of course. Your trade has value which then becomes liquid even if you don't "see" that money.
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02-28-2020, 10:18 AM | #8 |
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02-28-2020, 10:27 AM | #10 | |
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Ignoring that real risk for a second, does the cap cost pmt reduce the total cost of the loan, or worse, increase it? |
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02-28-2020, 10:49 AM | #11 | ||
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02-28-2020, 04:24 PM | #12 | |
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There are also single-pay leases which help reduce the cost of the loan slightly, but they operate under a different set of rules and do not carry the same risk as a down payment would.
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