Sending a lease early: Selling vs turning into dealer

Ask the Hackrs Buy/Finance
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Leased a 2022 Kia Telluride EX Nightfall edition for $3k over MSRP in May, total $53k.

Turns out that we will need to separate from the car — the 2nd row has captain seats and we are going to need a bench for a few car seats…

Not opposed to leasing another Telluride bc we love the car but it’s likely we would want to test the market a bit with other options since we can.

What are our options? Is this list accurate? And more to consider?

  1. End lease early for a new lease from dealer
  • Is this the worst option in terms of financial outcomes for me?
  1. End lease early via selling car (they buy out lease)
  • I know someone who wants to buy this from me but curious what’s involved. They live in NC which complicates a transaction in terms of tax, I assume.
  1. End lease early via purchasing car (I buy out lease, possibly sell immediately after)
  • financial outcome? Pay NY sales tax on residual value?
  • what if I sell immediately after? What additional costs do I need to consider?
  1. Transfer lease
  • CULA lease via Hudson Valley Credit Union. Can’t really tell what’s involved from website or lease contract.

Any help appreciated. Especially if something should be obvious bc I’m new to leases!

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Not necessarily, but you should consider the transactions separately as possible to maximize the amount you get for your trade and the best outcome on the new car. If this involves doing the transactions separately, that is something we may advise, if it gives the best outcome.

They won’t be able to buy out the lease, Kia has some rules disallowing non-Kia dealers doing that, and people usually aren’t allowed to do that. You’d pay sales tax and then they’d pay tax on what they buy it from you for.

If you sell directly to a Kia dealer, no sales tax. Additional costs may include buyout fees on your contract, etc that I cannot comment on without seeing it.

Well this changes what I said earlier, CULA does not charge different payoffs and allows 3rd party sales, so you will be able to trade it in without the kia restriction. I’m not 100% sure if CULA allows for lease transfers, but I wouldn’t bank on it.

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OP I will simplify your options for you:

  1. You sell the car directly to a dealer, Carvana, CarMax, etc. You pocket any equity.

  2. You buy the car out yourself then sell it directly to your friend. This is the only way to accomplish selling it to your friend. In spite of you and him both paying tax it still may be the best option (NC tax is only 3% btw).

  3. Lease transfer; Call the credit union to see if this is even an option.

The first step before you do anything is to get quotes from the online buyers, compare to your payoff to see how much equity (if any) you have.

As Hershey mentioned, keep all of the above separate from shopping for the new car.

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