chocaholic

I currently have an 06 GS 300. Paid cash for it used ($39k) a few months ago. I'm thinking about upgrading to an 07 or 08 GS350 or possibly an M35/45. Here's my question. Can I trade in my GS 300 and lease the new car with little or nothing down? Essentially, I want to pull my cash out of the 06 and lease (or finance) the new car. Need to access the cash for another project (non-automorive).

Just not sure if the dealership will write me a check for the value of my trade at time of lease.

Any thoughts? Selling it myself isn't practical since I don't have the time or inclination to mess with it and I live in a rural area.

Thanks,
Mike
06 GS300 Nav/ML

brianevans

I don't see why not. Worst case - have the dealer do two transactions. Have them buy your car - and write you a check. Then buy the new car.

lexuslover

yeah those are 2 diff transactions, and for sure you will get more money from a 3rd party vs. a dealer.

as for the lease, most are very little money upfront. i usually just make my first payment + DMV fees and that's it.

if you really need the cash maybe you can see if a bank will finance the current car since it's fairly new. you will lose quite a lot of value by selling it back...

chocaholic

I thought about that, but I would then owe sales tax on the entire purchase price of the new car (7%) rather than on the difference in value. Right?

lexuslover

sales tax offset varies by state. in CA you cannot recoup any sales tax.

BUT, for leasing, you usually pay sales tax only on the portion you "use", i.e., tax on the monthly payment and that's it. so you don't pay tax on the residual unless you buy it out later.

BurgBoxstr

lexuslover-

A lot of states are changing how they tax leases. For instance, I think both TX and NY make you pay sales tax on the full capitalized cost of vehicle being leased. In PA where I live, you only pay tax on your "usage" portion, but you pay it at a higher rate - std tax (either 6 or 7%) plus an extra 3% (so could be either 9 or 10%). The lawmakers know they are 'missing' out on initial tax revenue (lease vs sale) and they are adjusting the laws to get it. Sure is nice of them, huh?

doug_999

At least here in IL you pay tax on the full price of the car. The state sees it as the Leasing Co buying the car (and the Leasing Co is not going to eat the sales tax).

So.... if you decide to buy your car at the end of the lease - yes, you guessed, it you pay tax on the purchase of the used car - so you are double taxed!!! (remember, the state sees it as two different car owners).

With regards to the OP question -
Yes, the dealer will write you a check
No, you won't save any sales tax as you own your current car and the leasing co will own the new one.

brianevans

Buy your car from a South Carolina dealer. In SC, they have a $300 cap on sales tax for cars. So if you buy a $10,000 car or a $100,000 car, the most sales tax you have to pay is $300.

chocaholic

Brian,

That doesn't work. As soon as you register it in your home state, they send you a bill for the balance due before you can get your title. SC collects the first $300, and GA bills you for the rest.

brianevans

damn - that sucks.

autig1982

How much are you looking for chocoholic? I am in atlanta and am still in the market for '06 GS300. I will send you a pm and we can talk if you are interested. I can probably beat the trade in offer from a dealer. Take care.

chocaholic

Sent you a PM. Located about an hour NE of Duluth (off I-85).