JensBoo

Hi everyone, I have a question and was wondering if anyone had any experience with this.

I am in the process of selling my car as a private party sale and my lease is up this month. In Arizona, the buyer doesn't have to pay sales tax on Private Party Sales. My question is, because it is a leased vehicle would my buyer have to pay sales tax in that instance? I am so confused.

Thanks for any advice!

516IS

iTrader: (12)

I think tax will be collected by the local DMV once vehicle is registered by the new owner instead.

JensBoo

That is typical in most states, but Arizona doesn't have private party tax.

khoab88

iTrader: (5)

I have bought 3 lexusee with the same situation.

The remaining of the lease/payment gotta be paid off in order for Toyota/Lexus Financial to release the interest on the vehicle. There should not be any sale tax on the pay-off. Usually the sales was added up in the beginning when you first got the vehicle. So now you just pay off the remaining. Once the title got in the mail, just sign it off to the buyer and s/he go to DMV again to transfer. No sale tax will apply on the buyer, assuming AZ has no sale tax; but beware of use tax as there may be.

Hope this help!

EJC

My guess.

1- you are going to buy the car from Lexus - there will be sales tax on this transaction - the new guy will buy it from you - no sales tax.

2- you bring the seller to Lexus, he buys the car from Lexus and pays the sales tax.

tex2670

I would agree with this. It's not really a "private sale" transaction. Lexus Financial is the owner of the car, not you.

edgeucated

iTrader: (4)

Tell the guy to give you some money before hand to payoff the car. Once the title is in your hands, sell it to him so he can avoid the sales tax. Also write a bill of sale stating that you will sell him the car afterwards so that the buyer does not feel like hes just handing you money and not getting anything in return

tex2670

There's no way I'd do this if I'm that buyer. Just because your seller gives you a receipt doesn't mean he's not going to take off with your money--Bernie Madoff's victims all got quarterly statements....

But--this just sticks the seller with the sales tax. During the term of the lease, you are paying tax on your monthly payment--not on the residual. Once you buy out the lease from Lexus Financial, you owe sales tax on the residual value of the car. There's no "avoiding" the sales tax--there's is merely a shifting of who is paying it.

Your buyer is only going to pay what you negotiate with him. If your buyout from Lexus Financial is higher than your buyer's purchase price, you should have him buy it directly from LF, and you have to kick in the extra money, which will likely include sales tax. If your buyout is less than the price your buyer is paying, then go thru the added hassle of taking title to the car, and pocketing the extra.

Again--it's not a "private" sale, because the car must be purchased from Lexus Financial. If AZ also exempts lease buyouts, then you won't need to pay sales tax.

JensBoo

Hi guys, thanks for the responses. I got the run-around from Lexus financial on selling my lease. I basically have to buy it out and then sell it to the third party because her bank won't issue a check to me since I don't actually own the car yet.

I found out that I have to pay the sales tax on the vehicle which bites, but getting some money out of the deal is better to me than turning it in and than Lexus price gouging someone else for a perfect car.

Do you guys know if there are any bank fees when taking out an auto loan? I just submitted an application through Bank of America. I am hoping that I can just finance it and then pay it off when the girl buys my car.

EJC

I hope your getting a good price for the car!

You are going to have the Residual price
Arizona sales tax 6.6% + local
Remember your going to have to reregister your car, it is now registered to Toyota= DMV Fees
Your financing the buyout at least 1 months interest.

JensBoo

She offered me $25k for the car and my buyout is just a hair over 23k with tax included in that amount. Even if I only end up with $1,000 in excess, it's still better than turning the car in. I wouldn't have a problem re-registering the car. Once I cancel it, I would get most back.