SprocketS

Hi... I'm leasing an '04 RX330 in Southern California through US Bank (had a better MF & residual than TMCC at the time). I want to get out of it, and I've found a buyer that is willing and able to buy the unit at the early termination price. However, US Bank will not sell to a 3rd party; i.e. directly to my friend, only to me, and will not allow a lease assumption within CA.

No problem, EXCEPT - their policy is to collect CA sales tax on the sale, even though I will re-sell it within the 10-day "window" where no CA tax is due, according to the state's own Board of Equalization document.

So, I will pay $2K sales tax to buy it from US Bank, and then my buyer will have to pay another $2k on the purchase from me, in order to title it. Ouch.

The US Bank person, familiar with the various leasing companies, suggested that I try to get my Lexus dealer to assist - BMW dealers will do the paperwork on a flip like this, essentially taking the leased car in as a "trade" (no tax due) and then reselling for the payoff amount to the prearranged buyer. They typically charge $100 - $200 to do the paperwork. A call to BMW Financial Services confirms this.

My Lexus dealer (not exactly the most helpful souls) flatly refuse to do this - unless of course I purchase a new Lexus as part of the deal. I offered to pay a higher fee - make me an offer - but they won't help - not enough profit in it. Shucks.

I can't convince my dealer to help (she says that Lexus Financial never charges sales tax as part of the payoff so they don't understand why US Bank would), and I can't convince US Bank to release the title without collecting that tax!

Anyone know of a Lexus dealer in Southern California that could assist in this US Bank lease buyout, to help avoid double-taxation? Any advice or other ideas are most welcome, and thank you in advance!!

FlintRX

I think you should talk to someone else at US Bank. I was in a situation a couple months ago where I needed to sell my RX, and I called US Bank and asked about selling vs. assuming the lease. They have no problem with someone else assuming the lease in CA, the new buyer just has to be pre-approved through US Bank. They also have no problem selling to a 3rd party, as long as you satisfy the requirements of your lease contract. Also, US Bank cannot collect sales tax if you pay off the car early - the sales tax from the sale of the car was already calculated into your lease payment for each month. Your payoff amount is a calculated total of the remaining lease payments plus the residual - it's clearly stated on the back of your contract. Therefore, you will pay the sales tax on the purchase of the car when you pay the full payoff amount. Something sounds really wrong here.....

joako

So it seems alot of dealers are using USBank? Same thing happened to me, as I had an RX330 through Lexus Finance and when the lease was up they did my RX330 through USBank.

I don't claim to know everything about leases, but when the bank assumes the title to the car, is sales tax not paid for the full amout at that time? Honestly I would just say you sold the car for $0 when your friend goes to register it... unless CA is one of those states which charge you tax based on the value of the car... not the sale price. Legaly just make whatever he is paying for the car your "fee to process lease termination"