California 10 day tax exempt For lease buyout

Ask the Hackrs
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41

If we consider this figuratively, I would think Carvana (or anyone else) starting the purchase process would automatically convert my non-op to their op. Unless it’s a requirement that the current owner has to convert to op before a sale, which seems weird. If I sign the title, then the new owner goes to the DMV, pays the registration, and off they go.

42

Except I think Non-Op opens up a can of worms: a prof friend of mine went on sabbatical to the UK last summer, and non-op’d his beemer and parked it in the garage and leased out his house while away. Upon return was annoyed that he had to smog check, VIN check and safety check the vehicle to get it re-registered. I think the DMV expects non-ops to be subject to mechanical or safety (collision) repairs, and wants to ensure road worthiness before fully registering it.

43

When you get a quote through carvana, they ask if there’s anything that prevents them from driving the vehicle. A non-op registration would be included on that list.

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44

I wonder if, since it’s a 2018, it’s exempt from the smog part.

45

I think his beemer is an early 2010’s, but my 2015 Jetta has never been smogged…I assumed the modem is uploading crap and keeping everyone aware of emissions condition?

46

Nope they can’t

https://www.carvana.com/help/sell-or-trade/what-documentation-is-required-to-sell-my-car-to-carvana

The vehicle registration doesn’t have to be current, unless you plan to transfer your license plates to a new vehicle. California is an exception and requires the registration to be current.

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47

DMV just called me after I opened a Virtual Case, and said that whatever I did yesterday in person at the DMV (paid for and received a registration card and sticker) supersedes what I mailed in last week, which was the Non-Operation Registration payment.

So I am now officially relieved. New title should on its way, I’ll sell to Carvana, show the appropriate documents, and off it’ll go.

49

Note that at least carvana requires a current, active registration at time of sale. I would expect that to be the case with everyone else as well.

50

You can try to sell to dealers who accepts the lessor released title (i.e. carstub). In this way you don’t need to pay for the registration.

51

I asked this very question to Carvana directly and they responded indicating that non-operational status of the car being sold IS allowed and encouraged by Carvana for Cali folks/cars. This is the response from them…

Good morning, we can still purchase the vehicle from you with non operational registration. This is what we recommend to our California customers when they do not have active registration.

52

Interesting. That definitely contradicts them saying it needs to have current registration and that the vehicle needs to be driveable.

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53

As others mentioned, if possible, try to see if any dealer accepts the title right away. I heard that Vroom does, but need to confirm with them. However, it’s going to be difficult to complete the sale with Vroom within 10 days I think. Also, check with any other dealer. I sent an email to Shift, but they haven’t responded. Also check with AutoNation if they take title like these. AutoNation somewhat gives competitive offers and sometimes match online dealers. Please share your findings here…

54

@151727 AFAIK carstub.com also accepts lessor released title. They may not be the highest bidder though.

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55

I spoke to someone from the CA dmv on the phone. They have a call back system so pretty convenient vs waiting on hold.

Anyways I asked about using the title from the leasing company to sell the car vs getting the title in your name and he said it was perfectly fine to use the title from the leasing company. No need to go thru getting a new title and using the cdtfa form.

So I am confused. Are some on this thread saying that dealers won’t accept the title from lease company? If so this contradicts what the dmv told me…

I am waiting for my title from ally and plan to sell to vroom or carmax or a private party…but don’t want a any surprises

56

This is requirement of the third party buyer. They probably had issues in the past which is why their policy is that way. Either find another buyer or get title in your name. Best confirm what the buyer’s policy is.

57

Private party won’t work AFAIK. The next buyer could face a nightmare trying to register and title the car since Ally’s title will have your name as the buyer.

Whether Vroom or Carmax etc accept Ally’s title is up to them.

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58

I asked about this specific use case to the dmv expert and he said there is no issue with private party. Just sign the title over within 10 days.

I guess we will find out when I do this. Strange we can’t get a clear answer on this.

Btw here are some things i found online:

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59

I just read the pdf form of CDTFA 106. At the bottom of the form where you are supposed to mention the reason for the request on use tax clearance, the statement is like this

“I hereby request a Certificate of Use Tax Clearance to allow completion of registration at DMV/HCD without payment of the California use tax for the following reason:”

My interpretation is that you need to go through this only if you are planning to go to DMV and register the car in your name without paying tax. I suppose that’s a long process to wait again for the new title.

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60

I just sold my Alfa Romeo to shift. They took the title from Ally without any issue. It was a month long process. Was very risky but thankfully market didn’t change much during this time. I took personal loan to do the lease buyout. Here is the timeline so it will be helfpul for someone. It all started when I attempted to sell to Autonation and they got a payoff quote of 10k more than my personal lease payoff from Ally. It was close to my lease end and I decided to go through below route.

6/8 Tue - Applied for personal loan from SoFI
6/11 Fri - Cash available in my bank from SoFi.
6/12 Sat - Prepared Cashier’s check and send to Ally through usps
6/16 Wed - USPS tracking says item delivered. Checked with Ally next day, but they said it takes a while to process the postal mails
6/22 Mon - Ally online account shows payment has been applied. Talked to customer care again on next steps. They said they will send a FedEx for me to sign and send back (Bill of sale and odo reading statement). Followed up again in coming days, but no update
6/28 Mon - Received call from their buyout dept and said they will send me the docusign for bill of sale and odo reading(No FedEx). I signed through docusign the same day
6/29 Tue - Ally rep signed the document and I received the final doc through email. I specifically requested the person to send the title through FedEx
6/30 Wed - Ally sent the title
7/01 Fri - Received title through FedEx
7/01 Fri - Received a new quote from Shift. I called customer service and ensured they can take the title. Arranged appointment same day. Somebody came in the evening, inspected the car and drove if off.
7/05 Mon - Car listed in their website
7/06 Tue - Money available in my account.

Expenses
Had to renew the registration on June-15. Shouldn’t have waited till lease end. Paid ~$500
Insurance for the above period - ~$50
Interest on personal loan for a month - ~$300 (but SoFi had a bonus offer to give $300 on approved personal loans. So this may be covered).
My best case profit is nearly 2k.

If anyone wants to use my referral link to go through similar route from SoFi with $300 bonus, PM me.
Anyways, the delay it can take and how the market will change is unpredictable. So, it’s good to think of all backup options. Use your own math and judgement to make sure it can work out for your case.

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61

I found out after I submitted my cashiers check to Ally that they have a fedex only address for expedited processing. Of course they didn’t tell me that when I called and asked for expedited and no where is it listed on the site, so I am stuck with the 7-10 business day processing at their po box :frowning: Will be happy when I get the title and will be done with ally.

Nice that they did a docusign.

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