I’m in SoCal. I have a 2018 Chevy Traverse on a 3 year lease which is up in January. I was gonna buy it and keep it, but now my brother needs a car, so I’m going to let him buy it and I’m going to get a new lease. Buyout/residual on the car is very good vs. car value.
Can you advise on easiest way to do this transaction? E.G. Can we go his bank if he gets a loan there and ask them to help with the transfer paperwork, and let them payoff GM Financial directly?
Are there costs I will incur that I need to figure out (taxes or other fees, etc.)?
Thanks for your help. Sorry, I’m sure this is a common question but I didn’t find the answer on forum searches.
You will definitely pay tax on the residual amount. Unless you send GMFinancial a check for the resale payoff, you’ll likely incur some minor additional fees associated with purchase (dealer doc fee as one). I would assume, however, a private bank can submit a final payoff check if your brother is approved.
AFAIK no state allows a financial institution to sell directly to a private third party individual like your brother. Only the lessee (you) has the option to purchase the car per the lease agreement.
You’ll have to buy the car from the bank (GM Financial?) and then sell it to your brother. Luckily CA has a 10-day exemption to avoid both of you paying sales tax. You can google this.
For now. Once used car values go back down to their pre-shortage levels, your brother will be underwater, possibly massively
Yeah, @max_g is right here. I wasn’t thinking when I suggested a third party bank could send a check for your brother. Only you could send a check or arrange financing for yourself to pay it off, and unless you can write a check, even that would likely require a visit to a dealer to ground it first. Your brother would have to go to a GM dealership to handle the transaction, and it would involve grounding the car and buying it from them, unless you pay it off and have him buy off you. You’ll still pay tax on the payoff amount regardless. If you’d get it sold to him within 10 days of that, he wouldn’t have to pay tax again.
There are signs pointing to used values dropping again, so Max is also correct that he could end up in the hole quite a bit. GM products aren’t known for high resale values. If that would happen, and by how much is anyone’s guess at the moment, however.
I heard about some dealers that will buy / sell you the car in the same day / dealer.
Aka you sell the car to the dealer, he marks it up a certain amount , and your bro buys it from the dealer.
Thanks, all. The CTDFA exemption in CA makes it clear that as long as I resell in 10 days to my brother and I don’t put any miles on during those 10 days, I don’t have to pay the tax. Don’t need to place an ad, etc.
Buyout on the car is lower than lowest Carmax offer at this point, so I’m not worried about him getting underwater.
Really now we’re just looking how to workout the paperwork and if we can get someone to do it for us to avoid and DMV visits. Looks like we may be able to pull it of on DMV Online at this point.
