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Buying out friend's lease - Double sales taxation?

Discussion in 'Model S' started by twonius, May 4, 2016.

  1. twonius

    twonius Member

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    My friend's lease is coming to an end and fortunately for me he lives in Michigan, which hates Teslas so he's not planning to keep it. He still loves the car and wants to see it stay with his friends, family though (lucky me).

    Anyways the lease residual on his car is a screaming deal, but if he takes it, and then i buy the car from him would we end up with double taxation? (sales tax in MI is 6%)
    Or does the weird nature of the early leases mean that he doesn't have to pay sales tax?
     
  2. cwave1

    cwave1 Member

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    If you coordinate this with the leasing company, they should be able to transfer ownership directly to you (instead of him) when he pays out the lease and then you just separately pay him what you agree upon.
     
    • Helpful x 2
  3. mike-415

    mike-415 Member

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    You may need to transfer the lease to your name before the end of the lease. If you do that, you can buy it at the end. Call the leasing company and ask if you can assume it, and then it will be in your name so there's no double-taxation.
     
  4. Fusion

    Fusion Member

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    I was told that when the lease is paid off, he could give you the pink slip and you register it and pay tax only once. It has to be done within 10 days. I'm in the same situation and trying to find the best way to do it also.
     
  5. SDRick

    SDRick Member

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    Make sure to check with state laws and the leasing company. When you get an answer, let us know.
     
  6. whitex

    whitex Member

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    I did it once. Had a lease with Toyota. I told them I am selling the car to a new owner, they told me exactly what needed to get done. Unfortunately I don't remember the details on what paperwork needed to be filled out, but I do remember it wasn't that complicated. In the end, the new owner wrote me a check for the difference (I sold it for more than residual value), write another one to Toyota, and he received the title directly.
     
  7. twonius

    twonius Member

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    #7 twonius, May 6, 2016
    Last edited: May 6, 2016
    Update; Originally they quoted him his Resale value guarantee but then a day later came back with a trade-in offer which was $10k higher. I guess they really want this car since it has extremely low mileage (<20k) .

    I'm happy for him that he can get a better deal on of his lease out of this but for that price it's not the car for me. He's still getting the final detail but I'd advise him to take that offer. I can keep watching for deals on higher mileage cars. It's not like these cars are appreciating.

    Being a very low mileage early car I'd definitely need to add on extended warranty coverage since he almost hasn't had any trip to the service center or any of the common failures (drive unit, door handles, contactor) but those time bombs may still be ticking.

    So in the end everyone may be better off for this. He gets more money, Tesla gets a trade-in they seem to really want, and I get to keep wasting time on the internet :).
     

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