Leasing 101: Why “Due at Signing” is Rarely Ever Accurate in Dealer Ads

Too often, we hear a variation of the same story. A consumer sees an attractive lease offer on a dealer’s website with a reasonable upfront cost — say, $3,999 due at signing. Once at the dealership, the amount jumps by a few thousand.

Is this a classic case of bait-and-switch? Perhaps. More likely, the discrepancy stems from taxes and fees that were not included in the original advertisement. Read on to see how much extra you should expect to pay in taxes and fees.

Taxes & Fees Are Not Included in Ads

Because taxes and fees vary depending on where a vehicle is registered, manufacturer and dealer advertisements do not include taxes and fees. For this reason, what a consumer actually pays upfront can be thousands more than the advertised “due at signing” amount.

Take, for example, Toyota’s current official lease offer for the 2026 Toyota bZ, which advertises $3,999 due at signing:

Source: Toyota.com

Digging into the fine print, we see that the $3,999 due at signing includes a $2,920 down payment, the first month's payment of $329, and a $750 acquisition fee. Government fees, dealer document fees, and taxes are all excluded.

If we use California as an example, registration fees cost $572 (California DMV Vehicle Registration Fee Calculator). Dealer document fees are capped at $85 by the state. Tax on the first month’s payment is $31, assuming a 9.5% sales tax rate, while upfront taxes — the tax on the down payment, non-governmental fees, and rebates — is $1,000.

All in all, the total amount due at signing is $5,687 for this advertised 2026 Toyota bZ deal — a far cry from the $3,999 due at signing shown on Toyota’s website.

Taxes and Fees Vary Significantly by State

To further illustrate how the same advertised 2026 Toyota bZ deal can cost differing amounts, we’ll take a look at New York and Texas.

In New York, sales tax is levied on the cost of the entire lease and collected upfront. This amounts to $1,969 in upfront taxes, assuming an 8.875% sales tax rate. Unlike California, no taxes are due on the monthly payment. Registration is approximately $250, while New York state caps the dealer document fee at $175. The total due at signing amount is $6,393 in New York.

In Texas, taxes are levied on the selling price of the car — not just the lease amount. At an 8.25% sales tax rate, this amounts to $3,194 in upfront taxes. Registration is approximately $190, while Texas caps the dealer document fee at $225. All in all, the total amount due at signing for the advertised Toyota bZ lease deal is $7,608 in Texas.

The Bottom Line

When analyzing an advertisement, always factor in taxes and fees. Otherwise, you’re not seeing the true cost.

Because taxes and fees can vary so much, the best way to negotiate a deal is to use Leasehackr Calculator and create a target lease deal to aim for. Your target offer should account for your jurisdiction’s taxes and fees. Evaluating a deal based solely on due at signing and monthly payment provides an incomplete picture — especially if comparing deals from a different state.

Don’t want to negotiate a deal of your own? All Leasehackr Pre-Negotiated Deals are based on $0 down payment and show the total amount due at signing with estimated taxes and fees included, based on the seller’s location.