NY: Looking for Tips: 4Runner Lease Buyout then Sell to Friend?

Hi Hackrs,

Looking for some advice here. I’m currently leasing a 2017 Toyota 4Runner via Fusion Auto Finance. Last payment is due next month. Vehicle currently has 18K miles with a buyout price of $28,100.

My friend wants to buy the car as we’re both aware the buyout on my contract is much cheaper than any other 4Runner he can find for sale in the market today. Fusion will not allow 3rd party buyout this late in the lease term without having to “adjust the buyout price due to current market value”.

My plan was to:

  1. Initiate the buyout process immediately after sending in the last payment (friend will pay for all costs)
  2. Wait for release paperwork and apply for title via NYS DMV
  3. Sell vehicle to friend once title is in hand, sign over title to friend

It all seems simple until the reality sets in that NYS DMV can and will take 3 months to process a title, meaning I’ll have a vehicle I no longer want or need for that time while my friend cannot legally own or drive it. Additionally, since I’ll have to get a title in my name first then sell it to him, we would each have to pay sales tax on the two transactions.

For all the lease buyout gurus out there, is there a way I can streamline this process? Thanks in advance!

It’s worth mentioning that what you’re describing is a not a 3rd party dealer buyout, which is subject here to a market rate adjustment, but rather a 3rd party private party buy out that, at least to my knowledge, is never allowed on any lease.

Beyond that, you’re pretty much spot on with the issues. Expect a very long time for your title to show up and you’ll both be paying tax.

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Your friend will pay tax twice if he is paying all the fees. I guess he might be ok with that while getting the truck wholesale. Tax will be paid on your current buyout and then again to the NY DMV when he registers the 4runner in his name. Fusion will send you a lien free NYS title, probably within 7-10 business days and once you have a lien free title your friend must take that along with bill of sale [form DTF802 if registered in NY] and insurance to local DMV. I registered a used vehicle in the greater NYC area and it took 3 weeks to get a new title last month.

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Silver lining - your friend will get the 4Runner at a cheaper price than anything available on the market now.

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Thanks for the replies everyone!

Just write a notariazed power of attorney for your friend. Than they can drive it, insure it or sell when time comes.

No need to pay double tax.

I want a friend who will let me buy a 4Runner with 18,000 miles for under $30k.

And I want a friend with benefits too!

HAHAHA! You didn’t indicate that.

Why not finance it yourself, insure it yourself and just let the friend drive it (permissive use). Should be covered under any standard insurance policy.

Have the friend make the payment and insurance payments and you keep the equity in case the benefits go sour.

@VicontT @wantingadeal

You are aware if your ‘friend’ gets into an accident they can come after the car owner right?

I actually don’t want any liability on my end, as mentioned by @forbs. Friend also wants to assume full responsibility of the vehicle. I doubt our relationship will ever sour, but we prefer to conduct personal matters on our own even though we’re basically family.

He’s okay paying tax twice, even after everything is said and done with a title and registration in his name, it’s still much cheaper than if he were to buy a comparable preowned unit at the dealer.

I respect that decision. Was just trying to save your friend some money.

This is what I was referring to (obviously you would need to check with your policies declarations page):

What Is Permissive Use?

Permissive use in an automobile insurance policy means that you overtly or tacitly allow another person – who is not specifically covered by name or as a household member – to operate your car.

For example, if you allow a friend to borrow your car, that is permissive use. You have given your friend your permission to use your car. However, you must be aware that not all automobile insurance policies cover permissive use. Also, some of those policies that do cover permissive use might provide only limited coverage for permissive users, or require increased deductibles if a permissive use car insurance claim is made.

Sure. In practice, with mandatory liability insurance I personally would not sweat over it, but everyone is different.

At least here in NJ, from what my father has told me, when someone goes to the MVC to register a car, they ask how much the cost of the car is on the title, and if you state it was a “gift”, it becomes sales tax exempt. Just a thought.

Is it mean that OP doesn’t have to register this car on his name?
Can 3rd party dealer buy this car at that stage too, with a lien free title?

Double check wait time with Fusion. My friend is buying out his 2019 Odyssey. They told him that he needs to wait 4 weeks for an appointment becouse they are crazy busy

Solves none of the troubles that OP would face.

Such as the state coming after him for a vehicle in his name that’s not insured by him. For reg renewals, parking tickets, camera-based violations, etc. Or a third party coming after him for any accidents


I do not think any of what you mention are real problems, except for liability - but than like I said, mandatory insurance alleviates it, at least for me.

For friends and family, I would do this in a blink.

NYS allows tax exemption between 2 individuals if they are related. I gifted a vehicle to my brother in law and he did not pay any tax at the NY DMV.