It doesnt. Thats the problem. The tax charged is based on the remaining payments including rent charge. The rebate is only the unearned rent charge. It doesnt also include tax.
How much is your monthly payment? How much is the monthly payment is interest?
Sometimes the way they do accounting is convoluted but it works out correct in the end. If they actually overcharged you on payoff, they would have done that to many others. I can see a class action lawsuit coming.
More of the contract was posted in a different thread. The accounting does not work out correct on this one.
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You have made the first month’s payment then
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Nevermind I’m an idiot, I was looking at the tax instead of the rent charge amount
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Yes transferred title and paid the full amount. VWC provides a title release and bill of sale, they do not provide the dmv form indicating taxes withheld on purchase.
Rebates are taxable so it’s correct tax math if the rebate is correct
The issue is should they do a rebate? Have folks agreed to full payment and a rebate back? No absolutely not.
Weird, the paperwork they gave me did detail the amount of tax paid and was considered by DMV. But I’ll have to dig up my old paperwork to say with 100% certainty.
Yeah if you’re saying you paid $25 less tax than you expected it could be tax / DMV fee schedule got updated?
Not exactly what I meant, but I’ll double check my paperwork and confirm how they did it.
How much additional tax was paid to the DMV upon transfer title? 7.75% of the Residual or 7.75% of the payoff? I’m very curious how this plays out because I’m considering doing the same thing with my Audi and they’d be overtaxing me by $813 if I also still owe full sales tax on the residual.
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You get a Bill of Sale, and pay sales tax on that full amount at dmv
Yep you’ll end up paying hundreds in extra sales tax on the buyout because of their weird “rebate” tactic. You may want to provide feedback on what you think about them doing so
Exact same thing happened with my friend’s CA VW buyout.
They filed a note with the CFPB and CA-OAG. And CDFTA. And possibly failing that will go ahead with small claims or arbitration route (seeking the difference plus filing fees)
As another poster noted in the other thread, this is clearly not their only option since others don’t do the rebate nonsense and just charge you what’s outstanding.
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I just double check my records. The Bill of Sale amount is the Residual Value minus the rebate. That’a what I got from Audi when I pay off. When I went to DMV, the tax was calculated based on the Bill of Sale value. So, it all worked out correct in the end.
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Interesting so I guess you didn’t get a credit towards taxes paid but the buyout value is just lower (and if MF/term is high enough the sale value is zero?).
And that’s the amount you should put on the title transfer form instead of the residual.
Of course, none of it is refundable under the CA 10 day lease buyout and sell tax refund period, so it’s strictly worse than the alternative (the bill of sale is for the Total Payoff and no tax is collected) where the tax amount would be the same BUT refundable.
Yes. The back of the title received from Audi Financial Service has (residual - rebate) as the sales value. I paid tax on that when I went to DMV.
I see your point about the other scenario would be better for you if you are not buying the car.
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