Ally lease payoff options and avoiding CA sales tax

So I went to Carmax today to consider selling my Ally lease and to my surprise the buyout price for the lessee versus dealer is insane. My payoff is $25983 but if Carmax were to pay it off they would need to pay $40775. So now I want to pay the lease off, get the title, and sell it to a dealer. I searched the forums and I saw the google docs on how to file a tax exemption etc. but I want to just sell it off to a dealer. My question is can I pay the lease off and get the title and sell it off without retitling it and not pay sales tax? It looks like vroom, shift, and carstub will take the title of the car without it being transferred to my name. Can anyone confirm this is true?

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Your answer was the one I was referencing. Selling directly to the dealer is not viable because Ally won’t let a dealer pay it off unless they pay $40,775. I do not want to deal with trying to sell a car to a private party within 10 days. In my case, I would like to just sell it to the dealer without retitling which I heard from others is another option if the dealer will accept the title with the lienholder on it.

Your only option for finding out if the dealer will take the title not in your name is to ask them directly. The steps discussed in that thread apply to selling to a 3rd party dealer as much as a private party though, so it opens up a much larger buying base.

Which is why I mentioned these 3 companies. I called all of them and ask but their answers were vague and they didn’t seem to give me a clear cut answer. They said “if you have the pink slip we’ll take it” or “if you have the title and a lien holder release we’ll take it”. I just wanted to see if anyone else sold theirs to these companies or others and if they had any issues? Since I posted I also saw someone mention mycarauction too.

Just to update, also said they will take a title with the lienholders name on it. She also mentioned that I will probably not be able to get my title within 10 days and I would need to pay the tax on it but from my understanding, I would not owe the tax until I retitle the car to my name. Is this correct?

I wanted to follow up on this to let everyone know the process I went through to help other people who have to do the same thing. It looks like more and more banks are not allowing third-party buy-outs. The only thing I would have done differently was, after Ally deposited the check, I should have started calling them to move the process along but I waited a week thinking they would just handle it. I called and was able to get the title in hand within a week. Also, I called mycarauction and they said they will pay you before you even have the title in hand if you can show you paid off the car. I sent them a copy of the check and a print out of my Ally screen showing it was paid off and they paid me. When the title showed up they gave me their fedex account number to overnight the title to them. Awesome company to work with!

8/6 - Lease ends on 8/28. Sent payoff by personal check to Ally overnight.
8/10 - Ally deposited the check
8/24 - Got Ally documents by email to docusign, signed, and sent back. Called mycarauction and they came within 30 minutes and gave me the offer
8/27 - Received title from Ally and cashier’s check from mycarauction. Overnighted the title to mycarauction and cashed check.
9/2 - Mycarauction sent tow truck driver to pick up car

Some notes on things I did not know or I was concerned about:

  1. Ally prefers a personal check with your name on it over a cashier’s check because it makes it easier to verify you are the owner of the account the money came from. I believe this is because their third-party buy out price so they can only sell to the person on the lease.
  2. My registration for the next year was due on 9/2 and the bill of sale date was 8/24. The date mycarauction started the paperwork.
  3. The car did not have to be retitled under my name. The title had Ally and my name and their release portion was signed. Mycarauction had no issue taking this title. There was no sales tax due.
  4. I had concerns that I was limiting myself to just a few brokers but mycarauction came through with the best offer out of the sites I checked and showed up within 30 minutes of calling them for the first time.
  5. Just in case, I did not drive the car anymore after I sent the bill of sale odometer reading to Ally so there would not be a discrepancy between when it was purchased from Ally and sold to Mycarauction.

That’s it. It was not as hard as I thought and with what used car’s are selling for these days it is worth the effort. Let me know if you have any questions. Hope this helps anyone else trying to buy out a lease and sell.


Who mailed you the physical title? Ally or CA DMV?

It comes from Ally. They hold the title during your lease and when you pay for the car they sign off on their portion and send you the title.

Which state did you overnight the check to?