Cross-Country Honda Lease Buyout

Ask the Hackrs Buy/Finance
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1

Hi there,

My parents’ [extended] lease on a 2018 Honda CR-V EX-L is coming to an end in October 2022. The residual value is $14,500 and they’ve put 48k miles on the car. I’m interested in purchasing it, but I live in California and they live in Georgia.

I’m happy to drive it home, but I’m trying to work out the tax implications across Georgia and California. Since Honda won’t allow a 3rd party buyout, it seems like my parents will have to purchase it and then sell it to me. My questions generally are:

  1. What taxes should I expect to pay in both Georgia and California?
  2. Would this qualify as a family transfer in California? All of the FAQs I’ve read on the CA DMV website have mentioned in-state transfers.
  3. Any concern with the GA registration / plates for a cross-country drive immediately after purchase?
2

https://www.dmv.ca.gov/portal/how-to-determine-residency-when-fees-are-due-on-out-of-state-vehicles-htvr-33/

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4

Buy it in georgia from your dad, so ca doesnt collect tax

5

Doesnt matter where you bought it if youre a CA resident.

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6

Your parents are on the lease, not you, so only they can buy it from HFS. And because they live in GA, they’ll have to pay GA sales tax.

One thing you can inquire about is if they can gift it to you and whether CA recognizes a gift from a parent as a tax-exempt transaction.

7

If he doesn’t pay sales tax for the ‘purchase’ why would CA collect use tax?
It’s similar to getting a gift right?

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CA is pretty specific about the scenarios by which a vehicle gift is tax exempt.

9

Yes, buying from a parent is one of them.
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Yes but that may or may not apply to out of state

11

Thanks all, appreciate the great insights and links.

I’ll be covering whatever sales tax my parents pay, so it seems like I should budget for TAVT in GA. Looks like the initial purchase from HFS will be taxed at 6.6% and then we can do a family transfer at an additional 0.5%.

I’ve read through the document from @forbs and it’s a great help. It seems like CA would apply use tax (given it’s under 12 months from purchase) unless I can get a family transfer exemption. I’ll reach out to CDTFA’s customer support to see if an out-of-state transfer qualifies.

Will circle back with some information from them!

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