When did I use the word “always”? I’m talking about my experience in CA with BMWFS. They do not collect tax on a lease buyout. Other finance companies in other states may handle differently. In CA, when you sell a car, the DMV collects sales tax when you register the car.
A third party dealer COULD have bought out the lease, and with a lot less logistical hurdles because they have a dealer’s license and can access the DMV database directly. However, as has become more common these days, and frustrating, the payoff quote included a $2500 incentive off the normal payoff for me to buy the car. The moment a dealer requests a payoff, the $2500 disappears. To preserve the incentive, my options were A) me buy the car and pay off the entire balance, then sell within 10 days to make sure the sales tax isn’t paid twice, or B) find a buyer who would pay off the balance entirely, then have the new clean title signed over to them after it’s overnighted from FS.
I did the latter, which involved having a buyer who trusted me. I think he really wanted the car (M240i) and knew I was a real person that he could track down if I tried to stiff him. Frankly, I wouldn’t have done it in his shoes, but it worked out.