Buying out a friend’s lease?

[bjarble]

Hello Hackrs!

I have a friend with a Cherokee lease ending early next year and he has no desire to keep the car. He typically hands it in and leases something new.

I’d like to buyout his lease so my thought was to cut him a check for the buyout plus sales tax and throw him an extra grand for the trouble (so he is technically doing the buyout).

Then have him “sell” me the car for some made up amount and pay sales tax (again).

Is it that simple? Anything I’m missing? Maybe dealer will offer him a bigger discount on new car for turning in lease?

[BPitch]

@bjarble

Maybe dealer will offer him a bigger discount on new car for turning in lease?

Unlikely.

@bjarble

I’d like to buyout his lease so my thought was to cut him a check for the buyout plus sales tax and throw him an extra grand for the trouble

I would not pay him extra money. It sounds like a nice thing to do, but it is unnecessary.

@bjarble

Then have him “sell” me the car for some made up amount and pay sales tax (again).

Draft an agreement for the residual and nothing more—no need to change the numbers (unless you are paying less).

[forbs]

SOMETIMES, a dealer will facilitate this for a small fee (Less than sales tax) , just ask

Otherwise double sales tax (Him for buying it and to you for buying it again)

[max_g]

This Cherokee purchase is quite likely to end up being expensive on a TCO basis, because the depreciation of CJDR products is usually pretty bad. There are nominally more expensive vehicles that would actually cost you less to own

@bjarble

I’d like to buyout his lease so my thought was to cut him a check for the buyout plus sales tax and throw him an extra grand for the trouble (so he is technically doing the buyout).

Then have him “sell” me the car for some made up amount and pay sales tax (again).

Why are you so casually throwing a grand away, yet so casually suggesting what sounds like tax fraud?

[jeisensc]

@bjarble

I’d like to buyout his lease so my thought was to cut him a check for the buyout plus sales tax and throw him an extra grand for the trouble (so he is technically doing the buyout).

Then have him “sell” me the car for some made up amount and pay sales tax (again).

paying sales tax twice on the same death trap, plus a G to the leasee for their trouble

[bjarble]

Ha! Not much love for Chrysler out there!

I was figuring the big residual hit would have already happened and the buyout is about $6K less than market price.

The car is nicely optioned with a clean and trusted history and will be a 2nd car (snow days, rain days, long trips).

So sounds like double sales tax and a potential felony tax charge are the main negatives….