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Advice when Trading a Leased VW/Audi

Discussion in 'Model 3: Ordering, Production, Delivery' started by VLTWGGN, Aug 15, 2018.

  1. VLTWGGN

    VLTWGGN Member

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    So I traded a 2016 eGolf lease when I took delivery of my P3D. When doing the trade profile, they asked for the payoff quote, so I put in what VW credit quoted me which was actually about $1000 better than what Tesla ended up offering me.

    After Tesla sent the payoff check in the correct amount, VW turned around and said that if a dealer is buying the car the buyout is higher - almost $2900 higher. Had I known that, and had Tesla done their due diligence in checking the quote amount for themselves before buying the car from me/VW, I would have purchased the car myself and then sold it to Tesla.

    At this point, I don't really care anymore and will just make the payment myself to VW so they can release the title to Tesla, but I learned a lesson and was hoping to pass it on to anybody else thinking of trading their VW or Audi.
     
  2. chillaban

    chillaban Active Member

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    Really? Is that legal? It seems like Tesla would've drawn up a contract with you stating the amount you owe for the trade in. If they discover that the payoff is now higher than they expected, I don't see how you should be on the line for it...
     
  3. VLTWGGN

    VLTWGGN Member

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    Apparently totally legal according to several threads around the internet...

    That said, I need to see if Tesla can cancel that check they sent to VW and then allow me to purchase the car/title from VW, and then re-draw the contract and have them pay me for the trade. I honestly have no idea how Tesla or VW plans to proceed as I haven't heard a peep from either almost 12 days later. Will keep folks updated.
     
    • Informative x 1
  4. neroden

    neroden Happy Model S Owner

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    Consistent recommendation is to *never* trade a non-Tesla car in with Tesla; always sell it yourself first. The amount you save will probably cover the cost of taking taxis while you wait for your delivery....
     
  5. chillaban

    chillaban Active Member

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    Except for a deeply subsidized lease like a traditional EV, you take on the risk of not being able to undo the buyout.
     
  6. Kandiru

    Kandiru Member

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  7. VLTWGGN

    VLTWGGN Member

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    I tried that but VW Credit requires the original lessee to continue on the lease in case the new lessee doesn't make payments...I'm still on the hook for the payments AND the damages in this case.

    Interestingly enough, had I sold the car privately I would have come out about 2k over the lease buyout. I simply travel too much to make that happen though, so I've almost always traded my cars in and taken the hit in value. I've never had this issue where the dealership payoff quote is higher than the customer payoff quote though.

    Lesson learned: #1, Don't lease from VW/Audi, #2, Buy the car first before you trade it. Life moves on, the sun will rise tomorrow.
     
    • Like x 1
  8. chillaban

    chillaban Active Member

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    Agreed, the jointly + severally liable language for “swapping” a lease with VW makes it a terrible idea unless you really trust the next person.

    But this is so unpredictable an outcome that I think it’s hard to expect anyone to prevent. Thanks for warning the rest of us. Hindsight is always 20/20.
     
  9. Jard

    Jard Member

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    I'm going through this now with BMW but it's very clearly stated in my payoff documentation that the quote on the website and in the document only applies to me and not to a 3rd party dealer.

    I will most likely buyout the car and then trade it a few days later after I get the clean title.

    YMMV, RTFM, etc.
     
  10. notAnExpert

    notAnExpert Member

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    Here are some things I learned this week when evaluating buyout of our 2016 VW e-golf SEL lease to replace it with a Model 3 by yearend to maximize the federal tax credit.

    leasetrader.com and swapalease.com said that they won't take on a VW lease that has less than 12 months left. They claimed that VW doesn't allow them to. Not sure how true this is as I never cross checked with VW.

    VW's payoff quote says "To complete a third party sale: Go to the Department of Motor Vehicles to have the title transferred into the other person's name. At this time, you (our customer) and the other person may have an obligation to pay the state sales tax on the purchase amount. VW Credit, Inc. is not able to sell the vehicle directly to a third party."

    CA DMV says if I buy the car from VW and sell it to a third party within a week, I will not owe them sales tax on my payoff amount.

    Center for Sustainable Energy (the organization that manages the CA Clean Vehicles Rebate Program) says that if I availed the $2500 rebate for the e-golf, then I'd owe them a prorated portion of that amount back to them if I sell the VW in less than 30 months. The amount owed would be (rebate amount)/30 * (30 – months leased so far). They claimed that they run periodic DMV reports to see if the car is still registered in our name. If it isn't, they will demand the whole $2500 back, not the prorated amount. So they recommend that we do the voluntary prorated payback.

    Tesla's trade in offer was about breakeven with my payoff amount + pending lease payments. vroom.com wasn't much better. But carvana.com offered about $2500 more. I have never used them before, but they seem like a reputable firm. They provide an online offer and schedule someone to come and pickup the car. Seems like a no-hassle operation.

    @OP
    How many more months of lease do you have left?

    I am confused that VW Credit says "no third party sale" in my case, but are offering to do it for $2900 additional fee in your case. Are you able to cancel the trade in transaction with Tesla and try something like carvana.com? I know you said you are too busy to do all this, but assuming you also get about $2000 more than Tesla's offer from them, plus not having to pay an additional $2900, that's about $5K to be saved. I guess the biggest hassle is to coordinate with carvana.com to pickup the car within a week of VW Credit selling the car to you.
     
  11. VLTWGGN

    VLTWGGN Member

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    Yes - I'm actually asking for the vehicle back and will just hang onto it should they be able to void the trade. My delivery advisor is thoroughly useless though and doesn't respond to emails or calls, so I'm waiting for this to bite Tesla first so they can proactively reach out.

    The car is stuck - I can't drive it and Tesla can't sell it. VW has the title.
     
  12. VLTWGGN

    VLTWGGN Member

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    #12 VLTWGGN, Aug 16, 2018
    Last edited: Aug 16, 2018
    Update: This was bothering me since nobody knew what to do over the phone and my delivery advisor vanished.

    I marched down to the delivery center during lunch and just requested my car returned, so they voided the trade agreement and I'll reacquire the car since they weren't able to auction it as of yet.

    Hope this was a useful FYI for anybody thinking of trading a lease thru VW/Audi Financial (or other brand for that matter). Thanks for the help!!
     
    • Informative x 1
  13. MXWing

    MXWing Active Member

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    In California, there is no advantage whatsoever to trading in a vehicle to Tesla. Get rid of it by any other means. Normally you try to bring down principal and reduce sales tax but no good in California.
     
    • Like x 1

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