Hello all! First time post, recently joined Leasehackr.
Looking to buy out lease immediately. In this case, does it make sense to pay taxes, title, registration cost up front, or to roll into the monthly payment. Hope this question makes sense. Appreciate any advice.
This comes down to personal preference and is almost immaterial to the main question: how are you making sure you don’t pay tax again, since you already paid tax on the full value of the car at lease inception?
I’ve read and re-read about the Virginia process. here and other places including Reddit. this is an excerpt from the DMV website. From everything I’ve seen, there’s a document I need to get from Kia that I have to use as proof of payment of the sales and use tax.
Virginia Department of Motor Vehicles
When a lease ends, the lessee can either return the leased vehicle, or buy it from the lessor.
If you return the vehicle, the lessor is responsible for any vehicle-related actions moving forward.
If you buy the vehicle, you must re-title the vehicle in your name and pay Motor Vehicle Sales and Use Tax (SUT), which is based on the residual value paid by the lessee to the lessor.
### SUT Exemption
If you already paid the SUT when you leased the vehicle, you may be exempt from paying it again, if:
*** You present proof you paid the SUT in Virginia**
*** The title includes your name on the lease and not a commercial entity**
*** You purchased the vehicle directly from the lessor, or from the selling dealer if one existed**
Note: The SUT exemption only applies when the lessor transfers ownership to the lessee as a purchase at the end of the lease agreement.
Did you contact them? Did they send it?
Clarification - I’m planning for what I’m going to do. I’m picking up the car this weekend.
Back to your point about taxes - if everything works out, in Virginia, I should be able to get this document from Kia and use it to exempt myself from double-paying taxes.
Kia is notoriously bad about providing proper tax documentation on buy outs, so stay alert
Forewarned. Thank you!
It’s super critical to avoid double taxation. As long as you do that, your costs outside of the buyout amount are title and reg (if VA changes reg in this situation).
It’s almost trivial whether you pay title/reg out of pocket or roll them into a loan and pay some interest on them.
Keep a copy of your lease document for proof when you buyout that you paid full taxes
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