Buyout + sale to third party in VA tax question

,

I have an Audi FS lease ending in 7 months, and because I’ve put so few miles on the car, the private party value is about $6k over the buyout from Audi ($36k vs $42k). I’ve gotten quotes from Vroom, etc and they’re not great (-$37.5K), and possibly wouldn’t be over Audi’s elevated dealer buyout price. I’d like to take the buyout and sell it to an individual third party and avoid getting double-taxed. I’ve searched the site and haven’t found anyone in this scenario in VA.

The Virginia DMV has this language about lease taxes on their site:

  • 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.

I believe this exemption would apply to anyone who’s leasing in VA because we pay taxes on the full selling price of the car at the time of the lease, but I’m not certain about that. Does anyone know if this is the case? I’m also interested if flipping it to someone like this is a bad idea for any other reason I’m not thinking about.

Thanks!

You’ll probably need to wait a while before finding the unicorn who has the $42k cash or is proactive enough to get financing on their own.

In my anecdotal observation the private market is like an inverted bell curve. The extremes (sub 20k and exotics at the high end) are the easiest to sell. Expensive non-exotics are the hardest.

That’s a good point. The last time I sold a car it was $10k and 20 years ago.