Yup, dealer trade value can be different from the lease payoff. As you know, you have equity if the trade value exceeds the payoff.I trade my leased vehicles when I have equity. Relieves me of having to pay the disposition fee and pay for any minor excess wear/tear.
That’s not what I meant. Dealer may have to pay tax on top of payoff amount, while I won’t. Also, some banks may increase payoffs for other brand dealers or just not allow them to buy.
Never heard of a dealer having to pay tax on the payoff amount. Unless I’m missing something, it doesn’t make sense. Aren’t they tax exempt? These “other banks” can’t change the amortized lease balance as it’s contractual. Doing otherwise could violate the Federal Reserve Board’s Consumer Retail Leasing Regulation M mandates. It’s important to understand exactly what these “other banks” are doing if paying off a lease. And, yes, in most States consumers (lessees) will have to pay tax on the lease balance if they exercise their buyout option.
I’ve been told a few times that dealers needed to contact finance company to get their payoff amount which was different from mine, don’t know if it’s tax related or not. VA and some other states charge sales tax on the full selling price, so you don’t pay it again during buyout. Never done it myself, but would think that’s the case.
Need some help here 2017 Chevy Volt:
I leased 3 years 45,000 miles on my Chevy Volt
I have increased my commute so I will be purchasing a leaf or bolt or Tesla. Rather than go and negotiate at a dealer again, I figured I could just buy out my lease. I owe 19 more payments of 387.00. and I have a residual of 18842. 00
Essentially my buyout price is 25k - no purchase option fee.
Should I buy out my lease and look to sell the car privately? I currently have 22,000 miles on it. Car is fully loaded with all packages
Agreed Value of vehicle during purchase was $35,600 + $595 leasing fee.
DO I finance through GM or anyone else?
Posting your same question in multiple threads isn’t going to get you an answer quicker.
https://forum.leasehackr.com/t/is-there-a-way-to-make-money-on-a-lease/2338/13?u=mp11477
You would’ve been better off starting your own thread, rather than hijacking 2 others, TBH, as neither of the 2 threads have anything to do with your question.
1 Like
Oh yes you do! They are considered mutually exclusive transactions in the eyes of the State. One has nothing to do with the other. The first is a lease, the second is a buy. I know that Ohio, PA, NY, NJ, Ill and many other States charge tax on the buyout amount in addition to levying tax at lease inception whether its tax levied on the entire SP, depreciation, total payments or the individual lease payment streams.That has been a huge gripe by many consumers in some of these States as I understand it.
if you go to carmax to sell your lease, the payoff amount carmax pays is different than the amount the leasee pays
Not the amortized lease balance. That’s virgin territory… it’s fixed… can’t adjust or manipulate it. So, they could be adding something to it other than the purchase option fee and tax.
Although I could be mistaken, I believe VA does levy tax on the buyout (lease bal. + PO fee). It could be that what you’re seeing online is the lease balance or, the lease balance plus the purchase option fee excluding tax.
hmmmm… interesting.
I do not know for sure if VA charges sales tax on lease buyout. I have not personally done it myself or with a dealer. I did ask my dealer finance manager about it a few years ago and she said the state either did not charge it on buyout or they gave you a credit for sales tax already paid at lease inception. So take that with a few grains of salt… I really don’t know for sure.
Yeah, that’s my understanding also.
How do you go about providing these mistakes to them? Certainly the phone rep will be confused.
Ask to speak with a supervisor or, a manager in lease operations. I did discover a very minor mistake with a bank lease several years ago and the supervisor was able to remedy the matter quickly. She seemed to understand what I was talking about. Customer service associates are often clueless.
The reason was they somehow managed to credit the last payment 6 days after it was received (extremely unusual… apparently, a clerical error of some sort). So, the rent charge was slightly inflated by about $11. I think such instances are very rare but, it’s best to be prepared in the event that it occurs.
It said I couldnt start a thread
I was just unsure where to put it as you’re right- has nothing to do with it.
Now I’m stuck.
Thanks though
Virginia end of lease sales tax rules:
At lease termination, if the lessee retains the vehicle, the vehicle must be re-titled in the name of the lessee. Motor Vehicle Sales and Use Tax (MVSUT) will be assessed based on the residual value paid by the lessee to the lessor, unless the lessee is exempt (see below). Plates may be transferred if agreed to by the lessor.
Motor Vehicle Sales and Use Tax (MVSUT) is normally collected when titling the vehicle in the lessee’s name; however, if the lessee is the original person who paid Sales and Use Tax (SUT) on behalf of the lessor he may be exempt from paying it again. The lessee must present proof that the payment was made. Additionally, the vehicle must be either acquired directly from the lessor or from the selling dealer who leased the vehicle to the lessee initially. Purchases made through another dealer will disqualify the lessee from receiving the exemption from Motor Vehicle Sales and Use Tax (MVSUT). The title must include an individual named on the lease. The lease must be to a person or persons, and it shall not include any commercial entity as a lessee.
1 Like
does that mean you’re now the “2nd owner” in VA?