Cap cost reductions are taxed up front in CA, so you’ll pay sales tax on the trade in credit value up front just like if you were paying cash. The only way around that would be to have the dealer give you way less than the trade is worth and then give you a huge dealer discount on the new vehicle.
In CA, on a lease buy out, tax is applied to the buy out price. If you’re at the end of the lease, that’s the residual value.
No, the leased car is $30k for buy-out.
Then you will pay $3k for taxes. Your trade will make no difference.
I guess that’s what happened with my friend. He is in CA as well. The dealer must have tried hard to keep his business.
I’d be curious to see his actual contract as well. A lot of people misinterpret contracts and don’t actually get the credits they think they do.
Yeah, it seems so. We’ll ask the trade-in price. Hopefully it can be higher than CarMax etc.
So you have two leased cars now, want to trade both and get a new (3rd) car instead?
Seems like you are confusing a buyout vs a new purchase. With the buyout, there’s no negotiation or incentives. You will pay taxes on the buyout price.
A leased car X and an owned car Y. Plan to buy out X and sell or trade in Y.
If car X is an XC90, I highly recommend against it.
Because it’s not reliable, or overpriced?
The leasing cost is so high now (APR 8.3% and low RV). Looks like leasing is also not an option?
We live in the future
Guessing you haven’t had your first propulsion system warning yet? No worries with lifetime towing, but these are for leasing not for owning.
With 8.3% APR and 54% RV for 3-year/10k lease, I wonder who will lease it.
As others mentioned–no for the tax savings.
But to answer the other part of your question, yes you can trade in your lease and apply any equity (if any) as a down payment to reduce loan size or outright purchase amount with taxes and fees.
Essentially when you do the lease buyout from the dealer, it is like you’re buying a used car off their lot, but in this case the used car is the car you leased.
How are they different, between a buy-out with VCFS online and the buy-out with a dealer?
In the former case, how would VCFS handle trade-in?
Thanks!
Trade in will give you a check which is applied toward your loan on the lease buyout.
If no loan , then the trade in is just a check to you
If vcfs online, no trade in allowed
You won’t be able to trade-in doing the buy out from VCFS.
If you have a trade-in I would suggest going through a dealer to facilitate that transaction.
If you want to stick with buying out from VCFS only, then you would just have to sell your other car 3rd-Party. And since there’s no tax benefit/savings you’re probably better off doing this if the dealership doesn’t give you a strong offer on your trade-in.
And pay another doc free in the dealer facilitated transaction, right?
The Volvo can’t be sold to a third party, but many other leases could be.
Yes but in NorCal doc fee is $85.00. There would also be the $33 Electronic Reg Fee.
From what I read I think they want to buy out the Volvo lease and their trade-in is a car they own outright.
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