Thanks! On the phone VW credit said it takes about 4-6 weeks. I’m getting rid of a Tiguan with around 5k in equity if I pay it off. But if sold directly to a dealer I’m 2k in negative equity. 7k swing in price.
I did not. I called the DMV and they said I don’t need to because use tax is only due when the vehicle is registered. Since it wasn’t going to be registered in CA, it wasn’t necessary in my case.
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Just wondering if this can be done to any dealer as well? Or only a private party can be the buyer for this 10 day rule?
Doesn’t matter if the buyer is a dealer or private party.
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Thank You. One more question - Do we have to apply for CDTFA-111 if it’s a dealer? The context here is that if a dealer buys directly from my bank, they are asking higher price. So, I am planning to buyout and sell to dealer within 10 days. So, just checking if CDTFA is required even if sale is to a dealer.
The tax is due on the buy out not the sale. If you buy out the lease, you need to apply for the CDTFA-111; doesn’t matter who you sell it to.
If the dealer buys it directly from the bank, you don’t need to apply because you’re not involved in the purchase of the vehicle.
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@lease_buyout Thanks for this super informative thread! I wonder if Option 3) from the Google Doc would be different if I payoff the lease and sell it to a 3rd party dealer like Carmax or Carvana?
I have a BMW lease due on Jun. 30. Given BMW is suspending 3rd party buyout, I wonder if I can just payoff the lease the then sell it to Carvana. Thanks!
It’s worth checking with these dealers about the type of title you will receive from your bank(Lessor). As far as I heard Carvana doesn’t take such title. It has to be in your name to sell it. But, someone was mentioning that Vroom does. CarStub in SoCal does. So, check with dealers beforehand. Also, dealers might be changing their policy if they really want the car. So, even if it is heard that they don’t, it’s worth checking with them if they changed their stance.
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Hi All,
So in my case I am the potential buyer of a former leased vehicle. The seller has bought out his lease and is applying for a use tax exemption to get a clean title. When I buy the vehicle he says I will be responsible for the use tax. Does that mean I have to pay use tax AND sales tax?
It sounds like the seller is mixing terms. You should only be liable for sales tax on the purchase amount.
Ok, I was getting really confused thanks!
I just thought I’d share my experience having recently gone through this with Audi and their lease buyout/transfer process.
I tried to shop around my Audi as it presumably had about 10k of equity in it, after learning Audi charges dealerships almost market value I decided to buy it out myself which took about 40 days from sending check in to getting title in hand.
I then shopped that around to all the online dealers, Carmax, Carvana, Vroom, Shift - no one would take the Lessor Title. I did try CarStub but they don’t service the Bay area. My Car Auction was a low offer but would have taked it I think - never followed through with them.
After a quick visit to the DMV they told me private sale is ok, but the dealers don’t generally take it. So I simultaneously listed in on CL.
I completed the sale with a private buyer within the 10 days (9 days from the bill of sale date from Audi), we both went to the DMV, I signed my title which they took and then the buyer filled out an application for title or registration which the DMV gave him. We both filled out bill of sale. He paid the tax and all was done.
Not sure if I still need the CDTFA exemption form since it I didn’t have to pay tax a the DMV, I presume not since I never officially transferred the title to me or registered it in my name.
Hope this helps others… and if anyone has an answer on the CDTFA form please let me know - the DMV didn’t have an answer for that.
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Does 10 day window start after getting the title(which took 40 days) ? In that case, once I get the title, can I sell it to vroom or carma?
I’m trying to help a friend with their Mercedes, which no longer allows a third party buyout of the lease. Has anyone done this with a car that doesn’t allow third party buyout? Companies like Shift say they can work with that, but then when I go to do the estimate, it says they can’t. I know about the 10 day sales tax timeframe in CA, but I’m confused if there’s an easier way around the issue than buying out the car and rushing like all hell to get the title over to a buyer.
Currently I am in the limbo mentioned above and wanting to avoid getting taxed twice. With VW Credit being named on the title, but signed over to me, do other known options exist besides a Private Party or CarStub?
Mycarauction, they’ll take it
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My experience from companies that accept leaser titles in Southern California:
- Mycarauction - $26,000 initial offer - didn’t proceed
- Carstub - $27,300 initial offer - Their staff was nice and they came out to my house quickly. Once here I got complimented for the condition of my car and then they proceeded to offer me $26,000 in person, didn’t proceed
- Shift - $27,000 initial offer ($26,800 + $200 bonus credit) - Made an appointment and received a call to make sure I came prepared. No tricks got played and I got the initial offer.
When scrambling for ways to get the higher quote from Auto Nation I realized I could get the title in my name faster through AAA. Due to being out of town next week for work travel, it wasn’t worth risking the tax hit.
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Can you place an ad before paying off the lease? To have a buyer lined up when signed title arrives from bank. Or will CDTFA deny tax exemption if ad is placed before signed title is in hand?