Lease turn in with positive equity question (taxes)

Hi, I am due to turn in my lease on Friday. The car is registered in CT. The residual is approximately $16,900; KBB values for good trade in is around $20k. I’m trying to figure out what to expect on Friday with regards to taxes. If I decide to purchase the car and sell it myself I’m assuming the buyout would be $16,900 x tax rate of 6.35% = $17,900 which still leaves me with about $2k positive equity.

Is this assumption about taxes being rolled into buyout accurate?

In any scenario should I expect the dealership to cut me a check?

Just looking for a little guidance with regards to taxes and positive equity.

Thanks in advance for the assistance.

I think it really depends on what you are going to do. Are you buying/leasing another car from the dealership? If no, they may make you buy the car and say its yours. What they will pay is not so coincidentally not going to be $20k…

My question is, how did you get into this situation? Was your payment alot? Was the residual low? Was there a certain event that caused the price to go up for this vehicle?

Have you received any offers from a dealer (independent of buying/leasing a car from them)?

This is one of many scenarios where it is difficult to extract any theoretical equity out of a lease.

Residual was low and i got a ton off msrp when i purchased (~29%), so luckily, low payments and positive equity. Also, it has 14.5k miles.

I’d carmax or vroom it and see where you are at with the numbers you have and go from there. Other than MSDs I don’t see a dealership, just cutting you a check… :stuck_out_tongue:

You’ve got some work to do…

  • KBB values tend to run high, so don’t get too excited. Contact Carvana, Vroom, and on KBB there should be a link for buyers for your car.
  • call the lender and see if they’ll release the title without collecting tax. Ask them if they’ll send the title or lien release to your buyer. Contact the agency responsible for sales tax in CT and see if there’s a provision for not being liable for the tax if you sell it quickly or can get a refund of the tax you paid.
  • ask the dealer what he’ll pay for the car and if the equity can go to you.