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Jamatoe, in a nutshell, approx amounts:
Leased a $30k car. Residual value at $17k. Taxes equaled the tax rate multiplied by $30k. (not on $13k, like you would think it should be.)
Payments resembled that of a $13k note over 3 years.

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read your contract carefully. this is not a lease, but a balloon contract. it's similar to a lease, but you are the owner, instead of the finance company and have a 'balloon payment' of the residual value due at the end of the term or you can return the vehicle. On balloon contacts you pay the sales tax on the full value, on the leases you do not.

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In my opinion, there should only be sales tax on new car sales. I think the government taxing used car sales is double taxation and complete horse****.

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It's not double taxation, because new cars are taxed on trade difference instead of purchase price.

jamatoe, so would the dealer use the term lease in that situation?

My wife went in to toyota and said I want to lease a car. when the lease was up, we could either turn in the car or buy it at given amount, the car was financed through toyota.
so what's the difference?

if it was a balloon contact, meaning we owned the vehicle, why did we have to buy it again from toyota, and not just finance the balloon amount?

[This message has been edited by 62strat (edited 7/31/2012 12:42p).]