On what amount do I pay taxes if trading in a lease for a purchase?

This is what Florida has to say.

Note that in the first section as to what is taxable, they differentiate between “sold” and “leased”.

In the second section, trade in tax credit is said to only apply as part of a “sale”.

Fair inference to say sales tax has to be paid in the full price of the vehicle regardless of its status before the sale. So if trading out, OP would be in the hook for the full sales tax. If they just stick to paying the lease and turning it in, then it shouldn’t be a problem.

One could possibly argue that on a lease, as you don’t own the property, you aren’t trading tangible personal property as part of a motor vehicle sale, however.

What is more interesting is that the way that is written would suggest that you could trade a non motor vehicle in and get a sales tax credit.

Who wants to go out and purchase gold and then use that to pay your cap cost reduction? Sure seems like that would be trading tangible personal property. Ha!

Maybe @mani_is_kool can chime in.

That’s a big assumption

Not really. It’s listed on their website and a family member just got that rate. I have excellent credit and historically have gotten the lowest rates publicly offered (lower in some cases when the dealer shopped around with smaller partner banks).

I looked at it again and idk what to do. It seems a little more like lease and buy are pretty similar if I only hold the car for 30 months or less. I do think that the 36k is because it’s a lease. I ran my car at vroom without telling them it was a lease and they offered 31.5k vs the 36k that the dealer and carvana offered. So if I look at it this way and assume I’ll have to pay the full amount of tax on the car in addition to the payment shown on the sheet, it seems like not as bad of a deam. The 1500 accessory is shipping on both, I am concerned about the lease acquisition fee though, I didnt pay that last time (at least not explicitly)

I may try to call the tax collector but I have a feeling they wont know for sure. Though it does sound like I’m hosed.

Based on FL assuming 7%

If you own a car $20K value, You go to buy a $40K car, you save $1400 in taxes

If you are leasing your car, buying dealer is buying the car from your leasing company as they own the vehicle. Buying dealer does not pay sales tax, they will pay dealer pay off and get the car from the bank.

Since, you were leasing that car, you paid sales tax on a monthly basis (Florida Lease) to your leasing bank. Why would you have any tax advantage since you never owned the car? And if the dealer is making you buy out the car first and then sell it to them, does not make financial sense at all.

Best for you to sell out your lease to carvana or carmax. They will pay dealer pay off and take your car here and do the new deal from out state dealer from scratch without any trade in. The likelihood of them turning this into a tax dilemma is very high (specially after what other’s said about discounts and your deal). Don’t mix in the trade with it.

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But more importantly… can I use gold as a trade-in in Florida to limit the tax liability on a new car purchase?

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Only if its a 1% deal :grin:

Alright well that’s a bummer lol. I may just lease again then. Felt like it would be good to take advantage of the low rates but…

The dealer did not suggest I buy out the lease and sell to them. The last was something I was thinking since the payoff for dealer inventory was much higher than the payoff for dealer sale (if I wanted to buy my current car). That certainly wouldnt help with taxes but…

Why dont u sell the car to carmax or carvana ?

Would that help though? I asked the dealer if that would reduce the shipping costs but haven’t heard back. Unfortunately this is the only dealer I’ve seen willing to order a car to my specs. The others all want to move their own inventory even though it doesn’t match my requirements. Since the dealers here in FL charge around 1,000 in dealer fees, the out of state dealer is cheaper in that respect to offset some of the shipping cost. Idk what it is about dodge dealers but they can have a 50k challenger or charger with everything on it except doe the premium audio. Never understand their reasoning

Help you with taxes? No.
Help you to work smoothly on your new deal? Definitely Yes.

I don’t get it, this out of state dealer is purchasing your lease, which you will have to ship to them and then you will be financing a new car from them which you will have to pay to ship down here ?

Pretty sure OP is under the impression that the dealer will ship new car to him and pickup the current car all with no cost to him. IP isn’t realizing these costs are baked into whatever deal he negotiates.

OP: For my .02 keep the transactions separate, get a shipping quote, and figure out the deal from there.

Such a complicated deal :slight_smile: What’s this mystery car?

No, the 1500 'acessories" charge is the shipping cost! lol.

That’s for them to pick up my car or do whatever they want with it and ship me the new one. I leased my current car (and traded my old one) to the same dealer in the same way (though it wasn’t 1500 bucks last time, it was cheaper).

The car is a Challenger Scat Pack, but again its special ordered because there are none anywhere near me that have the upgraded audio in my price range. They spec them out for a 50k msrp but they never put the upgraded audio, and that’s a must for me. Plus the other dealer has a 700 dollar cheaper dealer (doc) fee than anyone near me since florida has no max so dealers just tack whatever they want on to it, which for dodge dealers nearish me usually means 1000. But really again, the dealers near me are unwilling to order a car for me. They want to move their inventory but I wont budge on the audio. I dont care if they gave me 10k off sticker, two things I won’t buy are a black car (had one, never again) and one with the crappy rental car audio.

If I can sell to carvana and save on shipping costs then I’ll do it but if it’s all the same then I don’t really care. They’ll ship me my new car and let me turn the old one on once I have it.

I think I’m going to buy it. Carvana offered 36500 now for the car.

Edit: nevermind. Carvana says they wont buy a lease from Ally. What a crock

Bought the new car and traded the old one. Very confused because ally says the dealer paid off 39,XXX for my 2018 charger scat pack. That’s like 700 bucks less than I paid for it new…

Also can I really not claim any credit for the trade in? My statement calls out sales and use tax:

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