@Anonymous wrote:
In CA tax is calculate on the payment. Example, paymnet of 500 + 8% sales tax= 540. Some states like illinois charge sales tax on the agree purchase price all up front. In such states, lenders have loop holed that by doing balloon payment financing...
Actually Illinois finally changed that as of Jan 1. It's now calculated based on what you're actually financing.
Yes, baloon payment financing can get around that problem. But it loses one of the advantages of leasing, a guaranteed trade-in value. You could get to the end of the term and find that even though you still owe $15K the trade value is only $13K. If that happens on a lease you just walk away. Not the same with a baloon payment.
