Leasing a new car. Transact in Florida, NY, or New Jersey?
 

Ok my friend is temporarily relocating (2-3 years) from Miami to live in Queens but work in New Jersey. Car will be new and a lease is preferred. In Florida there are no emissions. Driver is licensed and insured in Florida for current vehicle. I'm looking for the cheapest, legal way to complete this transaction? I'm not sure which region has better lease rates/specials but obviously that varies by Make and Model which is being researched. Any info is appreciated.

I can almost promise you it will be cheaper to insure in FL than in any of the five boroughs of NYC.. However, regardless of where he is licensed, most insurance companies and DMV's require the vehicle to be registered and insured in the same state as the owners permanent residence.

He should probably lease the car in FL and once he moves and get settled in NYC he can get the insurance and registration changed, he will also need to inform the leasing company of the address change if not it could be considered a default on the lease.

If he's in NY for a few months and has an accident he can always say I just moved here and started a new job so I haven't had a chance to get to the DMV yet and they will probably let him slide. If he's in NY for close to a year or more and has an accident I can almost promise you they are going to try to get him for insurance fraud.. Even if that was never his intention..

Over the last several years there has been such an influx of vehicles driving around the outer boroughs of NYC with out of state plates, that the city and insurance companies have been quietly cracking down on this.

When it comes to the lease fee itself, it's probably a wash (based on quick google searching). FL charges tax (6%) on each lease payment you make whereas NY charges tax (8.875% in Queens County) on the overall lease amount. Even if you hold the tax rates constant (and everything else constant), it'll be pretty close in NY vs FL. The catch is I'm not sure how tax rates change when you move states and the yearly registration fee will for sure change. Based on the above, if one were to buy, getting and registering in FL would be very advantageous. When you move, you only pay the fee to re-register and the difference (I believe) is tax deductible.

Example:
MSRP: $30k
Sell Price: $28k
MF: 0.001
Residual: 60%
Fees and Registration: $1200 (this is a guess, I just threw a number in)
3yrs/36k mi, zero down
Payment in FL: $385/mo
Payment in NY: $396/mo

If you want to play more: https://leasehackr.com/calculator/

NY and FL are reciprocal states, so you do not have to worry about getting hit on tax twice. Some people oversee this, and find out they need to pay state tax AGAIN after they move (assuming they paid taxes out of pocket when they leased).

Otherwise, i wouldnt worry too much. The difference is literally one to two hundred dollars over the course of three years.

Although, i will say that Miami insurance is some of the highest in the country, and definitely more expensive than NYC, despite what one may think. I think I was paying a little more than double when I lived there. its a perfect storm, between auto theft, compensating for accidents with a non-insured (who are legally allowed to drive in FL without insurance), flooding, high concentration of elderly drivers skewing the average collision rate, etc. etc.

Right...that's true for a sale but for a lease the two states do things totally different. NY will tax the entire value of the lease (sell price minus residual) upfront and FL will tax individual lease payments as they are made (though I guess you can calculate and pre-pay all of this if you want). If you move from one strategy to another, how does that work?

Actually in NY you can either have the sales tax rolled into your monthly payments and pay as you go, or you can pay the tax in a lump sum at inception. In either case you will only be charged tax on the portion of the lease you use and not the full price as you said...

Also, the sales tax rate depends on where you live. So let's say you buy a car on Long Island where the sales tax rate is 8.62%, but you live in Queens where the rate is 8.875% you need to make sure the dealer charges you the 8.875% rate or eventually the city will come looking for the difference.

Oh so even if we lease at a Jersey dealer we're getting hit for the specific borough tax?

You get hit with the tax for where the car is registered, not where it's bought.

As SamDoe1 posted you pay the tax rate based on where it's registered. So if the car is purchased in NJ, but you live in Queens, you pay the 8.875% NYC tax and the NJ dealer will make the tax payment to NYC on your behalf, and you should receive paperwork showing this was done. If you don't make sure you ask so you have proof you paid the tax.

Also, keep in mind that if you purchase in NJ you will need to get a NYS inspection done within 10 to 15 days in NY. And if you're planning to tint your windows get the inspection done first without tint. Since NYS changed the tint laws as of Jan 2017 it is very difficult to get the yearly inspection done with tint.

Why does NY need an inspection for a new damn car?

:confused:
If it's a temporary assignment, why not buy/lease/insure where you live, and state that it is going to be temporarily 'garaged' where you're assigned for ~2-3 yr?

Why should you have to register it in NJ/NY if you aren't a permanent resident there? Is it much different than an out of area college student?

The definition of a car's "residence" is where it spends it's time. NYC isn't going to appreciate (and rightfully so) a car being registered in FL and paying tax there but using the roads and infrastructure in NY. Usually, you have 30-60 days of "temporary" before you have to make the change permanent.

Makes sense. Is there some exemption for college students? I can't imagine it makes much sense to have to re-reg your car to out of state for 4 years if you aren't going to be a permanent resident there?
I've only lived here in TX, so it's a foreign concept to me.

Not sure about that. Maybe? It's all based on where your legal residence is so guessing most college student's legal residence is where their parents live. For someone moving for 2-3 years, they'd probably want to change their legal residence anyway.

Just wanted to update you guys for those who chimed in. Got the car in Greenwich Honda in CT. Registered to FL since DL is FL so taxed accordingly. No front plate (per FL law), FL insurance limits required (300/100/50), temp tag in CT and waiting for permanent plate from dealer.