Purchasing a Leased Vehicle

[JohnF]

I have a friend who leases a new pickup every three years with his business. He drives it like a car (hauls almost nothing) and keeps it garaged. 2 1/2 years ago I told him I would like to purchase his truck when the lease expires. He agreed even let me pick out some of the options so we would both be happy with it.

My plan is to allow him to return it to the dealer and then immediately purchase it from the dealer. Has anyone done this before that can give me some advice on the transaction? How will the dealer set the price? Should I let them detail and service the truck or can I save money by just taking it as is?

Thanks,

John

[Crusader]

I would deal directly with the lease company, leave the dealer out. You can negotiate the price with the lease company.

[Rugged Brown]

I would purchase the vehicle from your friend before he returns it. It's not the dealer that owns the vehicle but the leasing company. This way you will only pay the buyout amount, which is most likely the wholesale price rather than the dealers retail price. You can still finance through the leasing/finance company. There maybe a small fee for the financing though.

[DDC]

You can buy it from him at the buy-out price, the dealer will only up the price so they get their cut, I've done this before where I was the person leasing and a friend bought it.

[JohnF]

The problem with purchasing from him is that he will have to pay sales tax on it. That could add another 1,800 to the price. Then I would have to pay sales tax on the new price.

[Rugged Brown]

Originally Posted by JohnF

The problem with purchasing from him is that he will have to pay sales tax on it. That could add another 1,800 to the price. Then I would have to pay sales tax on the new price.

Any transfer of ownership, either through dealer or private is taxable where I live. Maybe different for you. I suspect a dealer would resell a lease return at a greater markup than $1800 though.

[NorminN.B.]

John, he has already paid the sales tax in his lease payments. When I sold my leased truck, the new buyer and I went to the dealer, he paid the buyout price to the dealer, plus his sales tax and was on his way. The leasee (me) didn't pay a cent. I sold it for more than the buyout, so the buyer had to cut me a check, but didnt have to pay sales tax on that, only on the buyout amount. Hope this makes sense and is helpful.

[jtstromsburg]

Originally Posted by NorminN.B.

John, he has already paid the sales tax in his lease payments. When I sold my leased truck, the new buyer and I went to the dealer, he paid the buyout price to the dealer, plus his sales tax and was on his way. The leasee (me) didn't pay a cent. I sold it for more than the buyout, so the buyer had to cut me a check, but didnt have to pay sales tax on that, only on the buyout amount. Hope this makes sense and is helpful.

Yup, did that with the dw's mini van. Paid my buddy a couple hundred extra for his generosity....:O I paid the buyout and tax and he just got some cash from me.