Works like this in most states.(Edit - Yes - you pay on buy-out, but get credit on trade-in)
Let me give an example to make sure we are on the same page...using round numbers and upping tax to 7% instead of the 6.625 or whatever we pay...)
Lease buy out: $30K, tax will be roughly $2100, so you pay $32100 to "own" that vehicle.
Bronco: $50K, minus the $30K trade-in (or whatever you get) leaves $20K taxable for $1400 in tax. Total purchase price is same, but tax is split across the two transactions.
$50K plus $3500 in tax ($53500) is the same as $32100 plus $21400.
Now, if your trade value is less than your buy-out, you are losing something, but if it is not more than you are willing to pay for the use of that vehicle for that time, no harm no foul. If you sold your vehicle on the open market (not trading it) then you are out the tax amount. That is why you have to consider the pricing of your sale to be the amount plus whatever tax advantage you would get.
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