So I have a 2020 Volvo XC60 lease, I’ve made 21 of 36 payments, my husband and I have decided to drop to one car, his as its a hybrid and gets much better gas mileage. Of course their are no third party buyouts of Volvo leases, but if I understand correctly I can go to a Volvo dealership to buy it out.
I called my local Volvo dealer and they are telling me that they have to pay PA sales tax on the buyout- but I thought dealers are considered resellers and as such don’t have to pay sales tax? Am I wrong on this?
Car has 16,100 miles - payoff is $38k - excellent condition, they offered me $42k which seems low to me - your thoughts?
Edmunds trade value $44,541
Private party value $47,571
Dealer Retail value $51,318
None of these are meaningful in your comparison so forget they exist. What will the car buying services pay for your Volvo once you buy out your Volvo and pay the tax on it?
Thanks @Ursus and @jeisensc for your replies. So I was told by Volvo Financial that they don’t charge the sales tax, just the buyout of the car. So at what point do I pay the sales tax, if VF issues the title in my name, why can’t I just sell it to whomever and have them pay the tax at the transfer to them?
VF doesn’t issue titles. They can sign over their title with your name in the “buyer” field. You’d need to take that to the DMV to get the state to issue a title in your name.
Hi Central PA here! Sooo, with a VFS lease you’d send the payoff amount to Volvo, then owe 6-9% (depending on your county of residence) to the DMV when you go to transfer the title into your name.
Because you haven’t yet gotten the title, they just signed their part to transfer ownership, and you’re getting close to a crime called floating a title. Did we chat in July 2020 about this?
In recent times, Volvo does not allow leases to be purchased by Volvo dealers unless in a trade - so your Volvo lease you have only one option to take advantage of that equity; purchase and pay tax on the lease buyout then resell to anyone you please. I recommend getting a quote from Carmax, skip Carvana and Vroom IME.
Hi @HersheySweet yes we did talk about this, you suggested I contact Keystone Volvo and that is where I got my car (thank you very much). It really is a great car, we just don’t need two cars with us both working from home and my husband out of the country for long stretches of time. So I’m trying to figure out the process to get out of it.
The best offer I have received is from “Driveway” have you heard of them?
I’m confused. Based on my reading, I thought that I have to pay sales tax on the payoff number if I buy out my lease early. But VCFS just told me that my “payoff” number (Illinois, at month 33 on a 36) includes all sales tax. I pushed back hard and she repeatedly confirmed that the payoff number includes all sales tax and that I will not have to pay anything to the State.
FWIW, in IL, lessees are now taxed only on the value of the payments unlike years past when we were taxed on entire value of car (like TX).
Let me clarify. I know that sales tax is owed on a lease buyout. I did not think that the VCFS offficial “payoff” number included sales tax. But VCFS claims that it does and that I won’t owe any additional sales tax to the state.
I’d like to know whether the VCFS rep is correct before I pull the trigger.
I just paid off my Volvo. I downloaded the payoff form from the Volvo financial site and it states sales tax is included. It may vary from state to state but in Florida its included.
Have you gone to the site and downloaded the form to pay it off?
So for NJ, tax is already part of buyout? When you receive the title and go to update the title, the DMV will not ask for the sales tax as that is already collected?
Yea, they will see that taxes were already paid. I’ll let you know if anything different happens, but that is what Volvo told me. They broke down the entire amount with taxes included.
