I have a family member who wants to buy out my 2020 lease. It’s been the plan for a while now but now I’m trying to figure out how to do it. Honda doesn’t allow of third party lease buyouts. I was wondering if I could buy out the lease and then they can buy it from me. There would be nothing wrong with that that I can see. After I buy it out I would have to wait for the title and then transfer it over following payment. Would this be ok or would this violate the ban.
I might have the option to take the car to the dealer to facilitate the sale. They stated they would be happy to help when my family member is ready to buy the car. I’m worried they will keep it and sale it to someone else. It’s worth about 5-6k more than the purchase price on KBB. I would hate to screw over my family member and I travel for work so I have a very short window so I’m planning ahead.
If you buy it out, you can sell it to whomever you want. Once you own it, Honda is no longer involved.
You’re going to have to pay sales tax on the buyout and then, depending on your state’s laws, they may have to pay tax when they buy it. Some states make sales to direct family members tax exempt.
The dealer can certainly facilitate the sale. You just need to agree with them as to how much they’d charge to do so, then see how that compares to the potential double taxation.
As said you can buy the car and do as you wish with it.
When you purchase it you will likely be required to pay the 7% sales tax up front to Honda.
I’m not super familiar with Indiana laws but you can then sell it to a family member after this however as you said it’s essentially double taxation as the recipient of a sold vehicle is responsible for paying a 7% car sales tax on the fair market value—even if it’s sold for $1. You may be able to “gift” it to your family member which in Indiana can be up to $17k but over that amount has the small chance of being “picked” for a tax of 18 to 40% of its market value. Not sure how often your state pulls that but it’s a risk.
Not sure how the dealer can essentially title jump the car to your relative but it certainly possible. If they confirm they can it may be worth a fee. You definitely won’t be able to do that alone as Hondas financial institution will want tax up front. I wouldn’t worry about the dealer selling it from under you that would be outright fraudulent of them and seems unlikely.
You would be using the dealer to essentially title jump the car from you to your relative. You won’t be “turning it in” so to speak to sell it off their lot to your relative. This is something they should be able to accomplish in the same day. If they want to take your car to sell it I’d run the other way. That seems unlikely and I’d ask the dealer a few questions I’m sure they can amswer.
Sounds like the asking the dealer to facilitate the deal may be the best option in the interest of time and avoidance of double taxation. It takes time to get the title and that’s the main thing I worry about with my two week window. I am worried about a potential delay with the title in addition to me not being there to register the title and sign it over.
Only if they’re going to charge your family member who they’re selling it to a whole lot higher than what they buy it out from you for. Which is going to force your family member into paying extra task.
If your buyout is way less than market value, I would inquire with a dealer about facilitating selling it to your family member for your buyout (plus some amount for the dealer doing the transaction) and then have the family member pay you any equity you agree to directly.
I think Indiana has a tax exempt on family transfers as well as gifting the car… also look into putting both your names on the title and then just remove your name after, depending on how the money changes hands- if your family member pays you cash just gift them the car and done deal skip the dealer if you can cause it will cost you
skip the dealer if you can cause it will cost you