Lease buyout question

[95Viper]

OK, don't yell at me because this specific examples is not of a Viper. It is a general type question that could apply to a Viper so I thought I'd still throw it here.

Question: How to buy out lease from a friend.
I have a friend driving a BMW lease that is due in March. It has such low miles that the payoff in the lease paperwork is a steal. I want to buy it from him. How do I do it without him buying it (paying tax), then selling it to me (tax again).

 

[2000GTS]

Have you asked the leasing co. if they allow this. Some do. If not then have a dealer buy it (no tax), then sell it to you (tax). Many dealers are willing to do this if you throw then a couple hundred bucks their way. The leasing companys often sells to dealers, usually when someone trades a car in, and won't think anything of it.

Bill

 

[chickenwarrior]

Depends on the state, but couldn't you do a "title only transfer" As long as you aren't the owner as of Jan.1, you wouldn't owe taxes unless registered. That's how it works here. Every state is different though, so these opinions won't matter much.

 

[CitySnake]

I do think the rules will change state to state, but they won't make it easy. The leasing company has little incentive to sell the car below market. Invariably, with the few experiences I have had with this situation, in the end, if you're not the actual leasee, it won't make economic sense. You'll get a better deal in the general marketplace. Hope I'm wrong.

 

[cayenne]

Yeah..I was a little puzzled over this too...sales tax on a used car bought from a private individual? I don't recall ever having to do that before...

 

[Dv8tor]

If I buy from a private party, I still pay taxes when I register the car in Florida, right? If so, how does the DMV assess tax amount?

 

[DodgeViper01]

I believe you can transfer the lease. That is what LEASE TRADER does as a business.

 

[Big Medicine]

They will charge you whatever the sales tax rate is for your address in FL. Then they will assess any other annual use taxes (excise), if any, on top of the sales tax along with registratyion fees & titlework charges.

Believe me, they have a system.

 

[Bugeater]

F355 is correct . Transfer the lease. Dont wait to buy and sell. Some leases are easier than others, some dont allow it! Check with the leasing co.

 

[Brad04Mamba]

You guys must deal with the wrong leasing companies. I lease, and have leased, all my vehicles for the last 15 years. I have sold many of them before the lease expired, last april I sold my 2000 GTS a month before the end, and in August sold my 2004 Mini Cooper after only 9 months of ownership. You have to realize, when they determine a residual value they have build in a profit for when they resell it, so the residual will usually be below market (even though sometimes they make mistakes and take a bath).

You just need to notify your lease company, they will get you the paperwork to do this. Your friend can call and get the payoff amount just like he was purchasing the car. It should be very smooth and easy, but maybe thats just a California thing.

If you have any questions PM me.

 

[95Viper]

Called all around. Called DMV, Lansing Treasury and BMW. They said the leasee needs to payoff residual(using my cash). BMW will send title with payoff proof to leasee. Leasee needs to take this to DMV to obtain clear title.

This is where I thought leasee could sign over to me and I would pay sales tax and obtain clear title. DMV said no. Lansing said no. They said leasee had to pay tax then sell to me and I pay tax again!

I called dealer manager. She said this is a joke and she would agree to buy vehicle when it is at end of lease from BMW for residual. She pays no tax as dealer. 10 days later when she has title, I come to her and buy for same price. She will charge me $160 processing fee and she will coordinate title, plates, etc.

 

[CitySnake]

I thought so. Nice that you've got an understanding dealer.

 

[rcdice]

Taxes. I hate taxes. For $160.00 I'd take the dealers expertise and run. Enjoy the Bmer.