Trying to find an answer to this, dealers don’t pay sales tax on the buyout of a lease. But what about the payoff/buyout of remaining balance on a purchase?
For example, and completely hypothetical, buy a car for 50k and add the 7% tax in my area brings the total to $53500. Finance at 0% for 5 years would make it approx 891 a month in payments. After 2 years, about 21300 of the loan has been paid off, leaving a balance of about 32,300 but this includes the sales tax. Would a dealers buyout/trade in be this amount or is the remaining tax pro-rated or anything? Thanks in advanced!
The amount that a dealer offers to buy your car for is in no way related to your remaining loan or lease balance.
And when a dealer buys any car like this they typically not pay sales tax, doesn’t matter if the car was leased or financed, makes no difference to them.
YOU paid the tax already and it is in your loan and part of the total obligation due at any point in time. Paying interest on taxation is not good fiscal policy BTW.
Buy-out offer will not change based on your already paid taxes, HOWEVER, if you were trading in your car for another one (in many states) you will only pay sales tax on the delta/difference between the two amounts.
If you think about it, states collect multiple sales taxes on each car sold, every time it changes hands there is a new sales tax. Thankfully they put that money into good use
