Selling your lease when you can't sell to 3rd party

@mllcb42 I do usually agree with what you post, and this one is no different. It will never say in any contract that the lessor is obligated to sell to anyone except the lessee. Which is why I can’t do anything about it except buy out & sell the lease. They can’t take the car itself away from me (unless the government decides to, which actually IS written into the contract) so technically, you’re right that I don’t own the equity until I ink my name on the paper.

It’s also right on @ilike2breakthngs that HFS (lawyers) are using any advantage they can get to shove the money & cars over toward Acura & Honda dealers because they’re losing it and them.

They’re taking the money directly out of the consumer’s pocket to mitigate their losses. There’s no sugar-coating that.

Also, I think @FlHackr is missing the side note here that my MF neighbor’s 16 yr old daughter smashed my car when I was literally hours away from putting 7k toward my kids’ college fund. (You clearly didn’t finish reading in the original post). Any of y’all would be heated if that happened to you… though still - not the point of the post.

End: It’s clear I’ll need to buy & sell the car. Thanks for reinforcing that. Oh, and confirmed that CA is the only state that let’s you avoid double sales tax hits.

But they aren’t taking money out of your pocket. They’re just limiting your ability to take their money.

The issue in this debate (and not with you specifically, but with this topic when it gets posted again seemingly every 20 minutes) is that people are getting annoyed that they can’t make money by selling something that isn’t theirs. Yes, it’s annoying that in the past some banks allowed this and now they don’t, but it never was “your” equity. Yesterday’s good fortune doesn’t mean anyone was entitled to it now or then.

Rather than be upset that you’ve “lost” $7k that was never yours, think how fortuitous it is that you have a contract that gives you the ability to purchase the car for significantly under market value. That is something you are entitled to.


They own the car, so technically you’re trying to sell their property off can keep the profit. They are just limiting your ability to do that by making you buy the car then sell it off.

They are protecting their asset, remember they are a business and they are in the business of making money, so they are just enforcing their contract that if you want the equity you should e to buy it from them.


Seems like a very valid question given what’s going on in the market

For anyone with equity in their leases, I would try to line up a buyer before lease end, run the buyout through a dealer, and have the new owner give you the difference of buyout and sale price.

No tax on your part
Dealer will handle title and dmv
Dealer will issue temp plate (doesn’t apply to you in MA)
No disposition fee for you
Some fees will be built in but worth it I think

This may be hard ask for some

Brokers have an easier time with this because of the network we have so ymmv


What do you mean by double sales tax hit?

Sales tax on my purchase from HFS and then sales tax on the purchase by the third party from me. Both would bring down the overall value of potential equity of the car.

Thanks for the insight @nextlevelautobrokers :+1:

You don’t pay sales tax when a 3rd party buys from you, nor does any 3rd party dealer.

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Wait, so Carmax (or whomever) does not pay sales tax AT ALL in a private party sale???

Carmax isn’t a private party sale.

They pay no tax when they buy it from you. As a dealer buying it for resale, they’re tax exempt.

The person who buys it from carmax pays sales tax, just like if they bought it anywhere else.


Definitely did not know that! Thanks…

The lease on my Volvo XC 60 is going to end in a couple of months and my residual balance is below the resale value that was offer by Carvana. However VCFS will not let third party seller to buy it out.

What are my options here to make most out of this situation? I am located in FL.
I am also looking for a replacement SUV that I would like to lease or buy based on the pricing.

You can buy out your lease yourself and then sell it to whomever you want or you can trade it in, at a Volvo dealer, for a new Volvo. How much equity are we talking?

we are talking about $5000

The sales tax you have to pay when buying it out to resell will eat up some of that, but definitely not all

I did account for the sales tax, if not we are talking
about $8000

Hi, where can I find that laws in CA? I’m worrying Honda giving me lower offer and I have to pay it off to sell it to third party. But I cannot find the buy and sell policy for sales tax. And I dont know where to ask. DMV? If I need to sell it to Carmax, I have to put my name on the title which will definitely require the sales tax. So how does that work?

Thank you so much for all the works! That explained a lot. In my case, I was planning to sell my leased car to companies like Carmax but they told me they cannot but cars leased from Honda any more and Honda even wont give them a quote of paying off.
I heard about the sales/use tax policy in CA but wasn’t able to find it. And I emailed CDFTA today to ask but no answer yet. Then I saw your posts.
After checking your research, I found it would probably be very hard to me because I asked HFS and they said it would take 5-7 days to mail me the original title and I’ll need to go to DMV for a title with my own name, by when I should be asked to pay for the sales tax. And without a title with my own name, companies like Carmax wont buy it. So the chicken & egg problem is a hard “no” in this case. So unless I can go through the tax refund retroactively you mentioned, I probably need to find a personal buyer. I’ll probably keep asking CDFTA about this because buying from lessor and selling a car to Carmax is definitely “a sale for resale”.
Thank you so much and could you please share me the email thread with CDFTA please. I left my email in the doc.

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