End of Lease Situation - 2016 Model S

[SIFutbol]

My lease ends Oct 1, 2018 and I have someone who wants to buy my Model S.

I have called Tesla to inquire about my options and they are insisting to collect tax from me on the lease end buy out. I have never heard of this as all my previous lease buyouts with other Auto manufacturers have not included sales tax because my intent is to turn the title over to a buyer (who would pay taxes at DMV when they go to register).

I feel like Tesla makes it very hard for one who wants to buy out the car almost to the fact that they want you to turn the car in...

Has anyone successfully worked with Tesla in not including California taxes in their lease end buy out?

Any help is appreciated!

Thanks

 

[Grisik]

I think you will have to pay the tax. What you are trying to do is “jump titles” which the state considers illegal. Unless Tesla will sell the car directly to the buyer I think your SOL. Best of luck

 

[Zorg]

Put both names on title.

 

[rob968]

I’ve seen the situation one time where the dealer took the leased car in and agreed to sell it to the car owner’s friend without markup. They did charge a dealer fee of some sort and insisted on a safety inspection and fixing anything they found. My guess is you won’t have that option here.

When you are leasing, you are only paying tax on the portion of the car you’re “using” during the lease (if I recall correctly). If the car is $100k, your total lease payments are $30k, and the buyout is $70k, then you only pay sales tax on the $30k during the lease term. If you buy it out, you pay sales tax on the remaining portion. At least, I believe that’s how it works in NJ.

 

[SDRick]

I believe there is a 10 day rule in California that applies to your situation. Do a little searching and you will find it. If I remember correctly, the taxes will be refunded to you if the car transfers within 10 days to another buyer.

 

[SIFutbol]

I believe there is a 10 day rule in California that applies to your situation. Do a little searching and you will find it. If I remember correctly, the taxes will be refunded to you if the car transfers within 10 days to another buyer.

Just so that I am following, IF I pay the taxes when I do the lease buyout to Tesla, California will refund me if they see the title was signed over to the third party?

THX

 

[SDRick]

This is what I was thinking of, I'm not sure if it will work in your situation

Transfer of a vehicle to a lessee by a lessor—as a sale for resale The sale of a vehicle to a lessee by a lessor may be considered a nontaxable sale for resale. If the lessee transfers title and registration to a third party within 10 days from the date the lessee acquires title from the lessor at the expiration or termination of a lease, the sale will be presumed to be a sale for resale. Transfer of title and registration occurs when the lessee endorses the certificate of ownership. As the lessor, or seller, you may accept a resale certificate from a purchaser who intends to resell the vehicle. Assuming that the purchaser is not engaged in the business of selling vehicles, as defined in Regulation 1595, Occasional Sales—Sale of a Business—Business Reorganization, the purchaser must include on the resale certificate a specific description of the vehicle, including the serial number (vehicle’s identification number (VIN)). For more information on resale certificates, refer to Regulation 1668, Sales for Resale, and Regulation 1610, Vehicles, Vessels, and Aircraft

 

[SIFutbol]

So, I ended up turning my lease in.

Does anyone have any experience with Tesla Financial End of Lease? When and how do they actually bill you for mileage overage and $395 lease turn in fee?

I turned my car in a week ago when I took delivery of my new model S and have not heard anything.