So I just found out about volkswagens special price when buying out to a dealer. I had a deal lined up with carvana to sell my lease out and pocket a little bit of money. The dealer buyout price was a whopping 4k over my residual, which messed up that deal. So my idea was to just buy it out myself from volkswagen, then turn around and sell it to carvana once I have the title. The issue is I assume they are going to collect sales tax when I go in to purchase it, which will cut the profits in half from the whole deal. I had read that some states have a deal where you can buy it from a dealer, and if you sell it within 10 days you don’t pay double sales tax. Is this possible in this scenario? I am in Colorado if it is state dependent.
Even if I pay sales tax it’s not a deal breaker, but I’d really prefer not to pay it on a car I’ll have for a few days in between transactions. Any ideas on the best way to go about this?
Never had this issue with any other cars I’ve done this with, always been the same buyout price for whoever.
If you buy out the lease, then you’ll probably have to pay tax on the residual. Some quick googling shows that CO has trade-in tax credit, as you mentioned, but it looks similar to CT and MD (where I have experience) where you have to trade in said car into the dealership where you are buying the car, so you’d have to see if the dealer can match or come close to vroom (even if they offer less, sometimes it is beneficial to sell to them depending on how much less and how much the tax savings would be).
If you’re leasing your next car, I don’t know if that would work… Risk might be it taking longer than expected to get the title where your current offer expires and values drop before you can sell it, or the car is damaged during this time.
Probably should have mentioned, since working at home all the time now I was actually going to just go without a car for a little while, so trade in won’t really work here. Worst case I just eat the taxes, just was trying to see if there was a (legal) way not to.
Yeah, why can’t the dealership just buy the car from you? The transaction would be they give you 4K dollars and then pay off the car themselves. This shouldn’t be a taxable transaction since they are paying you for the portion of the car you already own have paid taxes on
Are you at the end of your lease? The buyout price includes any outstanding lease payments & for some companies disposition fee as well all added to the residual value. Maybe explains some of the discrepancy.
6 months left on the lease, residual is 11k, plus remaining payments is a touch over 12k, for another dealer like carvana to buy it their price is 16k. I talked to VW credit, they said basically that I’m the only one that can get that price. I get where they are coming from, but in the end they are just making me pay an extra 1k in taxes for nothing, only thing they are accomplishing is making sure I never lease a VW again.
Good idea, was going to head into the dealership today, might give that a shot. Really wanted to go carvana since the price they were offering was much better than other offers I had gotten, carmax was 13k, vroom 13.5k, carvana was 14.5k. My assumption was VW was going to lowball me like crazy.
Well, carvana is offering 14.5k for the car, if they buy it for 16k I have to pay them 2k. If I buy it myself at 12k, sell it to them at 14.5k, that makes a lot more sense for me.
