Trade In a Leased Car
- Thread starter Carlos Danger
- Start date
Assuming your leased SUV is a non tesla, if you have positive equity in it from the offer that tesla is giving to you, they would apply that to the new car purchase as a down payment (if you are getting a loan) or cap cost reduction (if you are leasing your new tesla).
Thats the default for them (and every other car dealership when you trade in a vehicle with equity on it, either positive or negative). It gets applied to your new vehicle, either negative equity or positive equity.
Thats the default for them (and every other car dealership when you trade in a vehicle with equity on it, either positive or negative). It gets applied to your new vehicle, either negative equity or positive equity.
Do you know how the sales tax offset works? Would the sales price of my car be offset by the trade-in amount or only by the positive equity?
thefortunes
Active Member
In Illinois you get the full trade-in amount as a reduction in the purchase price of the new vehicle for sales tax purposes. This actually changed January 1, 2022.
A lot of car brands are not allowing third parties to buy out leases anymore so you may not be able to trade in to Tesla directly. Check with your current lessor.
If that’s the case you will need to pay it off on your own and obtain the title first, then trade it in to Tesla (or sell it elsewhere).
If that’s the case you will need to pay it off on your own and obtain the title first, then trade it in to Tesla (or sell it elsewhere).
I'm currently going through this process myself, trying with Tesla as well as Carmax (and maybe more options because of all of the difficulties I'm running into). What I'm finding out is what others are saying above. I'm dealing with Audi, which at least is supposedly still allowing third parties to buyout leases. However, if I call them I can get the lease buyout info (my buyout info) immediately via their automated system. However..., that is not the buyout that the third party gets - Audi, and a lot of other manufacturers now, are charging additional fees (sometimes thousands of dollars more) to a third party to buyout the lease. For Audi Financial, the third party calls an automated system and enters some info and waits for a faxed buyout packet to come through. Carmax has been waiting 4 days, Tesla has been waiting 3.5 days. Not sure if they will ever get one. They say this is all because they want the inventory back themselves. But then when I contact Audi dealers and tell them I'm looking just to sell outright vs trade in for a new vehicle they are selling, they don't get back to me either. I have positive equity in my lease, I have half the miles on it that it should have. Carmax would love to take the car but can't get the info from Audi to buy it from me. It's almost impossible at the moment to get rid of it, even to trade it in. Hopefully it changes soon as my MYP is on it's way to the delivery center now.
Thanks so much. You are exactly in our situation. We are buying a MYP and trading in a leased Audi Q5. We also have positive equity. I had no idea Audi charged dealers or third parties more. Given the above, it seems we are best served to just pay off the lease and get the title and then trade in to Tesla or sell to Carmax
I had no idea either until I went to Carmax. And I still don't understand why it takes so long to respond even with he policy. But yes if you're in a position to just buy it out yourself that will save you time, money, and headaches for sure.
Most major dealers are putting hurdles in there to lease buy outs from other dealer brands. They cant stop you from buying it (unless its a tesla model 3 or Y that you have leased, which does not have a owner buyout provision), but they can make it so that third party dealers either cant buy it, or make it so difficult they dont want to deal with it.
The "easiest" is to buy it yourself and then sell it, but then you have to deal with whatever tax implications that come about in your state from that. Thats what I did in Dec of 2021, I bought our X3 off lease (we had quite a bit of positive equity in it), and then I sold it in March of this year.
Takes longer that way, and you have to deal with taxes etc, but then you own the car so can do whatever you want to with it.
The "easiest" is to buy it yourself and then sell it, but then you have to deal with whatever tax implications that come about in your state from that. Thats what I did in Dec of 2021, I bought our X3 off lease (we had quite a bit of positive equity in it), and then I sold it in March of this year.
Takes longer that way, and you have to deal with taxes etc, but then you own the car so can do whatever you want to with it.
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Would I have to pay sales tax on the residual if I sell to Carmax? They appear to be OK with buying out an Audi financed lease.
Im sorry that I cant provide any information about how tax is handled etc as that is a state by state thing (and I am not in the industry). In CA where I am, there are no (none) tax credits from the sale of an existing vehicle toward a new one, nor is there any break on taxes (we pay tax on the residual here as well).
Carmax may say they can do it, I would look into it to see how successful they have been recently, if it were me.
Carmax in my state had a list of companies they could no longer buy back from. Audi they still can. For my situation they have been waiting on Audi Financial since Wednesday for the dealer buyback info. Not sure if this is just my luck or they are reacting this slowly for everyone now. But both sides say it can happen - Audi is just not responding yet to allow it to complete. Hopefully your situation is not similar. Very frustrating.
Just wanted to follow up with you on my experience with Carmax. I finally received the dealer buyout from Audi Financial - they added an additional $10k to my buyout for the one they sent to Carmax, in essence raising my buyout by 30%. Putting me underwater significantly. I then called the Audi dealer that I go to for all of my service and they are taking it back break-even. I know if I were to sell it on my own, or buy it out myself I could potentially make a little bit, but I'm out of time at this point and I am not in a position to buy it out on my own especially with the time to get the title etc. Just a heads up that Audi Financial is not our friend at the moment so you may want to start pursuing this other option in parallel to save some time. Tesla came in almost $7k below Carmax's offer as an FYI for a trade option so that was out from the start (they received the same buyout number that Carmax did).
Thanks for the update. Apparently, although Carmax buys out Audi leases, it appears Audi is not playing nice. So my options are:
1) Buy it myself and pay tax on the Residual amount (about $2000)and then sell to the best deal Carmax and net $8200; or
2) Trade-in to Tesla and save sales tax on the new car(clear about $8000); or
3) Sell to an Audi dealer to avoid paying tax on the Residual (called them and they'll pay me $6000).
While it would be easier to trade into Tesla I'm not sure if their offer is contingent on the Audi buyout being the same as I would pay.
Wanted to provide my two cents as until a couple hours ago I was in the same situation.
My lease was with VW Credit (same company as Audi, Porsche Financial). Sometime last year they changed the game and you can only sell the car back to them (any VW, Audi, Porsche dealer) for the residual and a couple minor fees if you’re at the end of the lease.
On my previous leases I first went to Carmax to get a quote, sometime I had equity, sometimes I didn’t. As the market is now, I had equity of a few grand. VW dealers know this and their offers are extremely low. The payoff on my car was $18K, Carmax was offering $27K, all VW dealers were giving me just $21K.
The trick for me was that I found a non VW dealer (Honda in this case) that was part of a larger dealer network with a VW dealer in Chicago that would take care of the paperwork with VW. They offered me the most ($25.5K), still not the KBB instant cash offer I had with them of $28K (dealers are scum) but better than the VW, Audi, and Porsche dealers.
Before Tesla I was ready to get a Golf R, S3, or ideally RS3. The cars are nowhere to be found, and the few that are in the US have markups of $10K to $15K. VW lost a 15 year customer always getting two cars as I always leased a CC (Arteon now) or Passat for my parents. Now I got a Tesla picking up on Wednesday and and Honda in my parent’s driveway.
Try looking at big dealer chains with VW, Audi, Porsche dealers even if they’re out of state and check with VW and Porsche dealers too as they can buy your car for the lower price.
My lease was with VW Credit (same company as Audi, Porsche Financial). Sometime last year they changed the game and you can only sell the car back to them (any VW, Audi, Porsche dealer) for the residual and a couple minor fees if you’re at the end of the lease.
On my previous leases I first went to Carmax to get a quote, sometime I had equity, sometimes I didn’t. As the market is now, I had equity of a few grand. VW dealers know this and their offers are extremely low. The payoff on my car was $18K, Carmax was offering $27K, all VW dealers were giving me just $21K.
The trick for me was that I found a non VW dealer (Honda in this case) that was part of a larger dealer network with a VW dealer in Chicago that would take care of the paperwork with VW. They offered me the most ($25.5K), still not the KBB instant cash offer I had with them of $28K (dealers are scum) but better than the VW, Audi, and Porsche dealers.
Before Tesla I was ready to get a Golf R, S3, or ideally RS3. The cars are nowhere to be found, and the few that are in the US have markups of $10K to $15K. VW lost a 15 year customer always getting two cars as I always leased a CC (Arteon now) or Passat for my parents. Now I got a Tesla picking up on Wednesday and and Honda in my parent’s driveway.
Try looking at big dealer chains with VW, Audi, Porsche dealers even if they’re out of state and check with VW and Porsche dealers too as they can buy your car for the lower price.
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