California 10 day tax exempt For lease buyout

[Derrick_M]

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

[mllcb42]

The CA process is discussed in detail here as well

Third Party Lease Buyout

I recently went through a third-party lease buyout in California. I often see the question on how this is done so I wrote a quick document of my experience: I think the main one I hear is how to avoid paying sales tax twice when selling to a private party. This can be avoided (in CA) by (a) selling you lease within 10 days of acquiring the title from the lessor (b) applying and being approved for a CDTFA-111 from the CDTFA. Note, if you sell to a dealer, the leasing company transfer the ti…

[alphawave7]

@PatrickL

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 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.)

[PatrickL]

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

[Derrick_M]

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

[forbs]

@Derrick_M

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.

[hedgefundie]

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

[PatrickL]

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.

[socalguy]

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?

[sidzart]

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.

[socalguy]

Did you receive a signed title from VW credit? So Shift accepted the title that had the name of VW credit in it?

[sidzart]

I received a title with my name on it from VW credit.

[socalguy]

Oh. From others’ comments, what I understood is that the bank sends the original title (which had their name on it) to you after signing on it and probably filling your name on the back. If you want title in your name, you need to get it from DMV after sending this filled title to them. I don’t understand how VW credit was able to give you a clean title in your name…

[sidzart]

Maybe I got it wrong…the paperwork they sent was enough for Shift to get the job done.

[Kctham18]

It’s possible Shift changed their operating procedures (requiring clear title) in the last couple of years, especially during the pandemic. Best verify the paperwork requirements with whoever your buyer is

[PatrickL]

That is correct to the best of my knowledge.

I went into the DMV this morning and surrendered the title the leasing company provided me (signed, etc.), and the CDTFA Certificate. They checked it out, entered into the system, gave me my new reg card and sticker, and told me the title is on its way.

The 10 days is impossible to meet since you can’t possibly get a new title within 10 days after a buyout, which is what I mentioned on the CDTFA form requesting the tax exemption.

The DMV lady yesterday was implying that I was trying to game the system by claiming that my wife was gifting me the car! (The car is in her name, I am doing all this for her via a Power of Attorney form the DMV provides.) I told her that, no, it’s the State that’s trying to double dip by collecting sales tax twice. She didn’t have a response. She kept needling me, but I kept my mouth shut and simply held up the CDTFA Tax Exemption form. I asked her, “If you think I got this fraudulently, then you should speak up now.” No comment. Give me my title!

[Mike_Ezginder]

@socalguy

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?

If this is the case, this is good news. CDTFA is practically stopping the 10 days clock.

[hedgefundie]

It’s unlikely they will buy it from you without an active registration. It’s technically illegal for them to even drive the car away from your house in non-OP status

[max_g]

But they can put it on a flatbed, correct?

[PatrickL]

DMV issued me a regular registration card and 2022 sticker yesterday. I assume my Non-Op submission hadn’t arrived in Sacramento yet. I already emailed them and told them to discard the Non-Op application.

On second thought, not sure why I submitted it so early, as it wasn’t due until July 8. I guess I was anticipating having the car for longer and didn’t want to have to pay the $450 reg to have it sit in the driveway.

I thought that whoever buys the car would have to register it in their name anyway, thus converting the non-op to op by virtue of them starting the transfer ownership paperwork. Not sure why a non-op would prevent them from purchasing.