Lease buyout +resale in CA - anyone ?

Deschodt · 08-12-2020, 08:30 AM

Wondering if any of you has *direct* experience in CA buying out your lease and immediately reselling the car. I understand there is a 10 day grace period on tax, meaning that you, the buyer, have 10 days to resell the car and not have to pay tax on the lease buyout, the final buyer does basically (section 6277 or something)... Unfortunately the understaffed DMV had me on hold for 90 minutes before I gave up... unclear how they'd know when the 10 day start, as the title can take a long time to get to me...

Long story short, due to covid (very low miles and complete lack of use) and fed credit, I'm in a position to buyout my 2019 E-golf with 4 digits miles for $15K and change (30+ new), and pass it on to a friend for the same amount (normal price at dealer with more miles is $20K!) - I am willing to help him out as long as I don't get $%#$% with taxes on the buyout - otherwise I'm simply returning it early and letting the dealer feast on the margin. (lease is so cheap my insurance costs more)

Steve Carlton · 08-12-2020, 11:02 PM

If you sell it to your friend, have him payoff VW Credit as part of his purchase process. If he's financing it, his lender can handle it. I wouldn't recommend buying it yourself and starting the 10 day clock and risking paying the tax if you don't make it. Check with VW Credit to make sure what the payoff is. Some lenders have different payoffs for different buyers, most notably US Bank and Ford Motor Credit.

You can also get bids from Carvana, Vroom, and Shift and you might be stunned. I'm selling my leased S60 today, they're paying off the lease and handing me a check for $2K. I got a good deal as a Volvo dealer employee, but having equity 1 year into a 3 year lease is rather bizarre. A dealer could buy the car for more than the payoff as well, but those companies are paying the most these days. You could also check CarMax, but I don't think they're being crazy.

Deschodt · 08-13-2020, 08:43 AM

Thanks Steve... VW will not let my friend buy the car from them, they don;t transfer leases either, they're weird... Good tip on carvana etc !!! Not good for my friend but maybe for me...
Weird to have equity ? Maybe but I think it's due to the fed credit and desirability of the car with low miles... All I know is my payoff is 15000 ish, dealer sells the same car with more miles for 19-20K. There's definitely a margin there..

Tobra · Tobra's Garage

Can't you just write up a contract and stipulate that they pay the taxes and what not if there is an issue?

Steve Carlton · 08-13-2020, 06:09 PM

I didn't mean for VW to sell your friend the car. If he (or anyone) buys it, they pay you something (hopefully) and pay off your lease to VW with a cashier's check. I can't believe VW wouldn't work with that. When you sell the car and send the payoff to VW, you know you're within 10 days and not waiting for delays that could put you in a taxable situation.

VW should do lease transfers - they're on swapalease. Depending on what's on there (and more importantly the current eGolf lease market), you might get some cash in addition to transferring the lease. Just make sure you're not secondarily liable if the transfee flakes on the payments:

https://www.swapalease.com/lease/Volkswagen/e-Golf/search.aspx

My transaction with Carvana completed today, nice and smooth. A guy showed up, looked over the car, had me sign some papers, and handed me a check. Just go to Carvana.com and plug in your info- you'll get an instant quote. Do the same for Vroom.com and Shift.com - you never know which one is going to step up. Potentially much cleaner and easier to sell than transfer.

Steve Carlton · 08-14-2020, 03:04 AM

Looks like you'd still be liable if the person who takes over your lease screws up. That should be a non-starter.

https://www.swapalease.com/help/lease-company/volkswagen-credit

Vipergrün · 03-23-2021, 03:06 PM

I have 2 years left on a Mazda CX-30 lease, after reading another thread I checked out Carvana. I was shocked! I will actually make $700 bucks on the deal AFTER paying off payments and residual. Works in my book. Just finalizing details. No hassles...yet. Was going to do Swapalease, but with Carvana I'll be done done. I bought a Tundra last October and I could sell it right now to Carvana for 1500 more than I paid. Crazy