Yeah, I'm probably just bring greedy...but I'm curious.
September 28, 2011 3:22 PM Subscribe
Selling my car to a private party before lease term expires, how to maximize potential profit and deal with sales tax issues?
I've been thinking about potentially marketing my 2009 VW Jetta SE to sell to a private party prior to my lease term expiring in June 2012. I'm motivated by the fact that I'll have roughly 24,000 miles total on the car at the end of lease term and even the most conservative estimates of value (Via Edmunds, ClearBook) at that point for this car are $3,000-$4,000 more than the residual at the end of lease term due to this lower mileage. I would also note that I do maintain my cars in excellent condition, so I'm positive that it's in above average condition. Basically, I'm trying to maximize any profit possible since I've maintained low miles/excellent condition of the car throughout the lease.
Although I've read a bit about this through various links and I know it can be done, is there a manner to avoid paying double sales tax? Meaning that if I found a buyer and we agreed upon a price, I would first need to pay off the car through the leasing company (VW Credit) with their funds and then retitle/transfer the car to the private party? Would I/we need to pay the sales tax to the leasing company and then my buyer would need to pay sales tax to the Maryland MVA the same day?
Has anyone here done this or could recommend how the details would work out and/or have more specific sources of information that I could use as a reference for this process? Is this even a good idea or am I being silly?
I've been thinking about potentially marketing my 2009 VW Jetta SE to sell to a private party prior to my lease term expiring in June 2012. I'm motivated by the fact that I'll have roughly 24,000 miles total on the car at the end of lease term and even the most conservative estimates of value (Via Edmunds, ClearBook) at that point for this car are $3,000-$4,000 more than the residual at the end of lease term due to this lower mileage. I would also note that I do maintain my cars in excellent condition, so I'm positive that it's in above average condition. Basically, I'm trying to maximize any profit possible since I've maintained low miles/excellent condition of the car throughout the lease.
Although I've read a bit about this through various links and I know it can be done, is there a manner to avoid paying double sales tax? Meaning that if I found a buyer and we agreed upon a price, I would first need to pay off the car through the leasing company (VW Credit) with their funds and then retitle/transfer the car to the private party? Would I/we need to pay the sales tax to the leasing company and then my buyer would need to pay sales tax to the Maryland MVA the same day?
Has anyone here done this or could recommend how the details would work out and/or have more specific sources of information that I could use as a reference for this process? Is this even a good idea or am I being silly?
I don't know how it works in your state, but in the state I live in, the buyer pays the sales tax when they register the title at the DMV. So if I buy a car, and then sell it, I only pay the sales tax once.
It is probably worth calling the DMV in your state and finding out how it works.
posted by 517 at 6:22 PM on September 28, 2011
It is probably worth calling the DMV in your state and finding out how it works.
posted by 517 at 6:22 PM on September 28, 2011
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posted by politikitty at 4:05 PM on September 28, 2011