Strategy for buying car coming off lease

wildthing · 09-02-2017, 01:34 PM

So I am in touch with the guy who is leasing a car. I think I have two options:

1. He buys it from the leasing co, waits for the title, then sells it to me. In CA, if you do this within 5 days (I think) he doesn't pay sales tax.

2. In case he doesn't have that much cash, he may take my cash and pay them (sorry, not that trusting), but I can certainly pay the leasing company directly. That means I will know the residual or buy-out price. So if I am shrewd, I don't have to offer him anything beyond that.

Couldn't find any good info on the web, and I trust the Pelican OT brain trust, do we agree on price first, then I pay the leasing company in case of #2 and pay him the rest? Or do I pay the leasing company and offer him $1K or $2K above. (Car needs tires. Yes it is a '15 Macan S.)

Thanks!

Steve Carlton · 09-02-2017, 06:02 PM

He can pay off the lease without paying the tax if he resells the car within 10 days. If he's using your money, it's a guaranteed sale. You'll know his payoff because that will be the amount of your cashier's check. Don't begrudge him a markup from that. He could find a different buyer if he wants to. It's possible the lender won't do this knowingly, as they're keen to get more than the payoff if possible. A Porsche dealer will know, especially if the lender is Porsche.

Steve Carlton · 09-02-2017, 06:04 PM

If they're easy to work with, you could have an understanding with the lender to send you the title directly. Who is the lender?

wildthing · 08:10 PM

It's with Porsche Financal Svcs.

So how does that work? When do I take possession of the car? When I give him a check for the buy-out price? Then I give him the rest on receipt of title?

Steve Carlton · 09-02-2017, 09:55 PM

It will hinge on what Porsche Financial allows. If they're cool, they'll let you payoff the lease and send you the title. You could hopefully satisfy the seller that you've got a valid cashier's check that can't be stopped payment on (your bank should be able to convince him) and you can both watch the check and paperwork go into a FedEx box headed for Porsche Financial. Since you've paid for the car, you should be able to take it at this point and just wait for the title, and you should feel secure paying him any equity above the payoff. If Porsche Financial is not cool and wants to jack up the price, then it gets complicated. I can call a friend who is a GM at a Porsche dealership and hopefully get an answer from him. Your seller could call Porsche Financial and ask, and give them permission to talk to you about it.

I'm assuming your seller can cover his payoff with your check and not need to contribute one of his own. If he were to return the car to Porsche Financial, they may ding him for well worn tires, any abnormal wear and tear, and a disposition fee. He will need to trade the car in for more than the payoff or sell it himself to cover his payoff. You should be getting a good deal here.

Being that you're in the bay area, I'll expect some visitation rights with the new baby...

wildthing · 09-03-2017, 07:35 AM

Thanks for the detailed reply! Well, the visit hinges on him accepting my offer. Of course, I can visit you with my old 911, just not during these hot days. My temp gauge was 1mm below the 120deg mark (top white line) yesterday, and I was on the freeway!

Steve Carlton · 09-03-2017, 07:48 AM

Ambient temp was almost 120 yesterday!

wildthing · 09-11-2017, 02:46 PM

Ok this didn't pan out... But I am looking at a Cayenne that has a lien. Seller claims that the fastest way his Credit Union advised is for him to pay off the loan to get a title. (Apparently it's one of those newfangled ELT where they just advise the DMV electronically that Lien has been released.) According to the seller that takes 3 weeks for the CU to process... If I wanted to take possession of the car this Friday, what sort of paperwork do I need?

According to the CA DMV website, I need a Title -OR- Application for Duplicate/Paperless Title, Signatures of Sellers and Lienholder... And it also says I have to do it within 10 days, but if the CU can't file that electronic release in that time, then does that mean I wait?

Thanks again!