I have a Lexus RX reaching to its end of lease time frames and thinking to buy it from LFS. I also own a mazda that I don’t need anymore.
Can I trade in my mazda to buy my Lexus so I can save on sales tax?
Also can I do the transaction by a non-lexus dealers ?
I got a good offer from Carvana to sell my Mazda. However, I am not sure if Lexus dealers are willing to match that. Is it possible that I do this transaction with carvana?
The only way I see that working is if you have a good relationship with a local dealer, and they would be willing to buy your Lexus for whatever the payoff is then sell it back to you as well as take your trade.
Any dealer could theoretically do this, doesn’t have to be Lexus, but if you’re just cold calling local dealers I wouldn’t expect to get very far. But you could not do this with Carvana.
What are the values of the cars, and what is the potential sales tax savings? I’d calculate that first to see if it’s worth your time.
Even if you can find a dealer willing to do this, they will probably want at least a doc fee $500-$1000 for their time, so any sales tax savings could be easily wiped away by this.
What is on the table for Lexus dealerships to sell my leased car to me? The sale price is fixed (i.e. RV). Do they only profit from doc fee?
If a dealer bought your car from Lexus Financial for the RV, then sold it back to you for the RV, then they would be making $0 on the transaction. So charging you a doc fee or some other fee would theoretically be the only profit in the deal for the dealership.
There are a lot of moving pieces in this plan, as mentioned I would calculate potential sales tax savings first before you spin your wheels any further.
Tax saving is about $1.8k. Does lexus dealership need to buy the car from LFS at RV price before selling it to me ? Is there anything else other than doc fee on the table for Lexus dealerships that has direct business with LFS ?
IDK about LFS specifically but a lot of captives allow their own dealers to buy out leased cars at the lower of wholesale value or RV
Keep in mind wholesale values might not be lower than RV these days.
Correct, wholesale MMR value for my Lexus is way more than RV right now.
Before you get to far have you compared your pay off on the Lexus to what similar cars are selling for?
It is about $8K more. My pay off $29.5K, dealer adverting price for similar car $37K. MMR is about $32K
More importantly, what will carvana and vroom buy your car from you for?
Which one of my cars ? I want to buy out Lexus for RV price of $29.5K and sell my Mazda for about $18.5K. Carvana and Vroom both offer $18.6K for my mazda. But Lexus dealer is offering me $17.2K.
I am on the hook for $29.5K purchase sales tax when I buy out my lexus. That is about $2.9K in my county. I am hoping to save $1.8K with my Mazda trade-in credit and just pay $1.1K in sales tax.
I do not care how much Carvana and Vroom is going to pay for my Lexus since I don’t want to sell it.
You always want to make sure you’re not paying more than the market (or else you would be better off returning it). That is why we are asking but it sounds like the market price is higher than you payoff.
Personally if you are really 8k ahead I would take the money and run.
You never paid tax on the Mazda, so are you sure you would get a tax credit on it?
Yes, I am way ahead of the market value.
I have no place to run. The new car inventory is very bad right now and it is hard to hack a lease. Plus, I don’t have time to shop a new car.
I did pay sales tax on Mazda. It is not leased. I have the title.
With 8k in your pocket it’s not very hard to get to a hacker approved payment!
Agree. I didn’t say I am 8K ahead. I said the dealer is advertising similar car 8K more than my RV. So I guess I am 3-4K ahead.
Both transactions have to be done at the same dealership. I don’t picture any dealerships doing you any favors though, so whatever tax savings you are seeking will probably be wiped by the profit the dealer intends to make.
I am hoping that I can have the Lexus dealer to match Carvana , Vroom offer for my Mazda. That is about $1.4K more than they offered me ($17.2 vd $18.6K). If they can buy the Lexus from LFS cheaper than my RV, they can profit on that side too in addition to doc fee.
You won’t know until you take the 5 minute to request quotes. You might be surprised.