I agree with you but I have to buy it out definitely before maturity date (for some personal/family reasons).
Wait til maturity or as late as possible.
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I will but the question is: will I be paying sale tax again on the buyout?
Most states you’ll pay tax on the residual, I’m not sure about Maryland, but if you owe them, you’ll be paying them regardless
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No.
You have already paid the tax. But the title is held in the lenders name.
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I found this using the Google Machine.
http://www.mva.maryland.gov/about-mva/info/27300/27300-30T.htm
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Thank you all. For some reason I was not able to find this link in my search. So no double sale tax on lease buyout in MD.
Hi HMB45,
Did you find out if you had to pay sales tax again while buying out your lease in MD?
We ended up not buying the car. But from the link above it seems that you don’t pay additional tax.
Thank you. Just thinking if it make sense to buy out my lease.
You actually do pay tax again, we found this out a few months ago when we were trying to buy out the lease. If you personally buy it out, you pay tax. If the dealer buys it out, you don’t. When you call the leasing company, there are multiple rates they’ll give you to buy it out: the rate for you personally buying it out with tax including and the dealer rate without tax included.
That’s very useful information. Thank you. I assume the tax is on the residual value, not the original price. correct?
It’s State specific. As Trism pointed out in maryland you do not as long as you are original lessee.
Correct. You also have to be mindful of who your lease is through. I have US Bank on one car and Ally for another and the process is different. For US Bank, if the dealer buys it out, you’re still on the hook for all remaining lease payments, which is absolutely absurd. The dealer and I were on the phone with US Bank and couldn’t believe what we were hearing.
So you don’t pay tax again on the residual buyout price in Maryland? The MVA just sent me an email saying you do. Does anyone have an updated link that shows you don’t? That link is not working for me. Thanks!
This looks to confirm that you don’t get charged tax again…
MARYLAND VEHICLE LAW §13-810
Excise tax exemptions – Certain vehicles are exempt from the excise tax imposed. These excise tax
exemptions are found under article §13-810 Exemptions of the Maryland Vehicle Law, which is a follows:
…
(11) A vehicle transferred to a lessee who exercises an option under a vehicle leasing
agreement for an initial term of more than 180 consecutive days to purchase the leased vehicle at the end of
the lease.
Thank you. Had same question. It will make leasing then buying in MD more palatable which is what I’m hoping to do with an Acura MDX (and looks like you doing the same with your good questions on Edmunds forum).
I just bought out the lease on my BMW X5 and I did not have to pay any excise tax. Of course I did pay tax when I leased the vehicle and it was rolled into my lease payment as I did not put anything down. With the crazy used car prices it made sense to buy it as it is worth over $10k more than the lease buyout.
Edit: was able to create a new topic after posting this question here Maryland Tax & Title Company Recommendations for lease end buyout titling/registration?
Can someone recommend a Tag and Title company in MD (close to Baltimore, preferably) that can handle the lease buyout re-titling and registration? A few places I’ve called either have no idea how to handle this, or want to charge me more excise tax (the MVA has told me no excise tax should be required because it was paid up front on the selling price at lease inception in MD). I’d go to the MVA directly, but they still require appointments that are several weeks out, hence looking for a registered tag&title company.