Payoff of the lease by dealership when you buy a new car - do they have to pay sales tax for it?

Ask the Hackrs
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1

Hi, I was just talking to my dealer regarding trade in of my current lease and buying a new car from him. Lets say my payoff is 40k. The guy told me in order for them to buy off the car from the bank, they have to pay the 40k plus sales tax. Is that true? I am not buying the car the dealer is buying the car, I thought they are tax exempt and just would pay the 40k? If that is true, is completely insane. It doesn’t make any sense to me.

2

What i have experienced till now is they call the bank and get a dealer payoff quote from them which is the buyout minus taxes.

They do not pay taxes on payoff atleast in New Jersey. What state are you in?

3

i am in california

4

No, the dealer doesn’t pay sales tax

5

this is what I thought but the guy is convinced they have to pay tax…

6

Is he trying to convince you that he can’t give you as much for it because he has to pay sales tax still?

7

exactly! He tried to explain that to me as if I was stupid…

8

Sounds like it’s time to move on to a new dealer.

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9

If this is for your Infiniti, I’m pretty positive it won’t be worth selling to a dealer. You are most likely very upside down.

10

Is not my Infiniti, is my In-Laws SL 550.They are paying a fortune for the car and want to get off the lease and get a GLS. They hardly drive the car and want a SUV. They have 11 month left but since the car has just 4k miles left, I am trying to have the dealer buy the car from us, I think it would be much better but not when they want to add the Tax!

11

They don’t have to add tax. But more importantly, have you gotten quotes from carvana, shift, and vroom?

12

I have put it in Carvana but their system was overwhelmed with the data, since the car had only 4k miles. They wanted to call me back. I didnt have my real information in there but I think I will just put all the info and try it there.

13

BTW: Does anybody know what the current deals on the GLS450 are? The dealer told me we are VIP and he will give us the best deal (I haven’t gone into the weeds with him yet) but with all these what he told me with the tax and trade in I don’t trust him.

14

Try Carvana, Shift and Vroom, it worth your time believe me, they will pay more than the dealer, regarding the GLS450, I know @LeaseHero is doing $3k drive off and $960 per month without MSD, $875 W 10 MSD this is his post LeaseHero's Socal Mercedes-Benz Specials (June)

You may want to check the CA marketplace for more deals.

2 Likes
15

He told me I was VIP too!! No fair.

You need to shop many dealers, don’t trust just one dealer.

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