California 10 day tax exempt For lease buyout

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I think it is form REG 138: Release of liability. When you buy out your car you get a title in mail. All I did was walk into CarMax with title and I was able to sell the car. The car was never registered to me. I think this is standard practice, CarMax guy knew about it common practice for German cars.

The car was already registered under your name when you leased it. If dmv was happy with the release of liability to be used for tax exemption then I guess I’m good. Otherwise it’s a 3k tax bill

Carvana is saying they won’t do it without me first having the title in hand. How can one get the title within 10d?

Reviving an old thread, I am facing same issue. Has anyone actually bought out their lease and sold it within 10 days?

Can you please share if you had to pay sales tax to captive and if you were reimbursed? How fast did you get title from captive and if you had to get a new one at dmv before you could sell it to carvana (or any other dealer)?

Haven’t done it myself but my guess is you want to do everything by overnight. I would do the payoff the day I got my quote from Carvana/Vroom

I spoke to my Bank that holds the title to my lease. They said I needed to submit a California Affidavit, stating I am not keeping the vehicle. Any idea what Reg form that is? They had no idea and could only give me that name/description. Thanks!

Here ya go!

And, some supporting documentation:

https://www.taxes.ca.gov/Sales_and_Use_Tax/ResaleCertificate.html

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Thank you so much! I just got off the phone with CarMax ( I am selling to another dealer FYI) and they said to just use DMV Reg 101, which doesn’t look right and they called it Statement of Facts, which is Reg 256. A bit confusing especially since the Bank doesn’t specify what they want.

I bought out my lease, did not sell it within 10 days. However, I went through the CA Dept of Tax and Fees and got a Certificate for Use Tax Exemption. Showed that to the DMV, didn’t have to pay taxes on the buyout. My registration was coming due, so I filed a Non-Op (only $23), and am now waiting for DMV to issue a clean title in my name.

Although my registration is not due until next month (July 8, 2021), they are saying I need to pay $439 to issue the title, an amount I have no idea how they came up with. AFAIK, it’s $15 to issue a new title in CA; only thing I can surmise is that they’re adding the registration fee (math adds up), so maybe the Non-Op payment I sent via snail mail hasn’t posted yet.

I have been on hold with them for 2 hours so far today trying to get an answer, and they are not responding on their Virtual Email system, which has worked pretty well so far.

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Would be interested in which form you filled out (CDTFA-106)? How and where did you get approved… tried getting some guidance by calling the CDTFA office and they told me that most likely it won’t get approved unless you have a reseller permit.

I am curious too which form you used. I need to do the same thing.

The CA process is discussed in detail here as well

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I thought Non-Op’s had to go through a new smog check to get re-registered. Check this with the DMV. Edit: and I think a safety check (lights, brakes,etc.)

My car is less than 4 years old, which exempts it from the obligatory smog checks on sale/transfer/etc.

Many leasing companies allow you to finance the car. If you do that, then that would get around the 3rd party buyout issue right?

And pay Sales Tax as well as all the other fees associated with buying the car.

I have the answer for you but you’re not going to like it.

When you file Non-OP it is assumed that the vehicle will be Non-OP for the entire registration period. If in the middle of the period you decide to operate the car again you will have to pay the full registration fee for the full period as if you never non-OP’d in the first place. No pro-rated registration

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The car will remain in Non-OP status until I sell it. The new buyer (Carvana most likely) will handle all the necessary fees/charges to get up and running again.

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I am a bit curios. So you received a signed title from lienholder. And you went to DMV along with clearance from CDTFA to request for title in your name. Now, you are allowed to wait indefinitely until you receive the title in your name? Not just 10 days? So, does that mean this 10 day period kicks in only after you receive the title in your name? Not after you receive the signed title from lienholder which still has lienholder’s name in it?

I bought out my Jetta from VW credit and sold it to Shift - this was back in 2019. I did not make a single phone call to the CA DMV or fill out any forms with them. Some forms were provided by VW credit. I did not inform VW credit that I was planning to sell the car. VW credit did not collect sales tax on the purchase.