Need help buying friends leased vehicle (this may get confusing)

Ask the Hackrs
1

I’ll try to make this as simple as possible:

  • Friend has a BMW, wants out, to break the lease it’s $40,000 which he is okay paying.
  • After lease his purchase price is $60,000.
  • Friend wants to sell me car for his purchase price of $60,000.
  • How can I buy this after he breaks lease and avoid paying taxes twice? (If he buys it outright he pays taxes, if I buy from him then I’d pay taxes again)

Thank you for any help, apologies for make it so confusing.

2

In California he won’t pay tax if he sells it within 10 days of getting title. So only you will pay the tax.

3

Have the lease transferred to you (assuming you qualify), and then buy it out yourself.

4

Literally solved my entire dilemma. Thank you for this.

5

@cruiserchuck his idea is prob an easier one.

6

Yes great idea as well, may be a bit more time consuming? I’ve done a few lease transfers with BMW and it took nearly two months.

7

Lately they have been pretty fast, I’ve seen some reports of it being done in a week. My personal experience was 3 weeks start to finish.

8

I’m confused, and maybe just being naive. But is your friend paying $40k to end lease AND $60k to buy? That’s how I’m reading what your saying.

9

I would be paying the “buy” amount myself.

10

I recall seeing some posts reporting that it was difficult to get the second transaction done within 10 days due to a delay in getting the title from the buyout.

11

Understood! Thank you!

12

From looking at this thread again, it appears that your friend would have to pay sales tax when he buys the car from BMW, and you will have to pay sales tax when you buy it from him. Your friend should be able to get a refund of the sales tax from the State if he transfers the car to you within 10 days of the date he receives title. However, some folks have reported that the State denied the refund request.

13

So your friend is going to take a $40k bath to end this lease, what on earth is the model in question here?

14

I’ve never heard of states returning taxes. Has that ever happened?? I know CA won’t atleast

15

Yes, CA, has a provision to refund taxes provided the transaction is completed within 10 days from you receiving the title. We have several threads on this subject:

California 10 day tax exempt For lease buyout - Ask the Hackrs - FORUM | LEASEHACKR

In fairness CA is the only state that has this provision.

16

Wow. Pleasantly surprised.

I once had CA DMV refuse to refund me registration fee that they charged by mistake.

17

Lease transfer may be time consuming, but probably the most straight forward approach to this problem set.