Should I buy out lease?
12-27-2013, 07:46 PM
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Should I buy out lease?
I have a 2011 Q5 Prestige on lease( Quartz Gray metallic, excellent condition, 33K). My lease is almost due, and I have an SQ5 coming. My buyout for the car would be about 26K. based on asking prices for used Q5's similarly equipped, and TMV value, it seems like I could buy my present Q5 and sell it for a reasonable profit? Opinions would be appreciated. Thanks.
12-27-2013, 09:40 PM
#2
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You have to pay tax on your buyout so it may not do much for you. Your Audi dealer should give you trade value so if that is less than buyout, you will get equity and no tax if the car goes to the dealer. Also, some dealers will mark lease "trade ins" as trade ins and you can get tax credit on your SQ5, so something to ask about.
12-28-2013, 03:31 AM
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You have to pay tax on your buyout so it may not do much for you. Your Audi dealer should give you trade value so if that is less than buyout, you will get equity and no tax if the car goes to the dealer. Also, some dealers will mark lease "trade ins" as trade ins and you can get tax credit on your SQ5, so something to ask about.
12-28-2013, 09:08 PM
#4
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Ellwer-
You need to compare the buy-out value with the price you could get selling the car, and the time and effort that might take. If you have a CARMAX location near you, stop by and ask them what they'd pay for the car, just tell them it is yours. That's a real number (and usually a quote good for ten days) rather than some estimate from Edmunds or KBB as to what a private sale might bring. If there's no CARMAX around...use those two web sites, see what a private sale for your car, your mileage, your condition and area might bring.
In general if you have significantly less mileage than what was allowed on your lease, yes, you can make money by buying the car out, and then selling it again, or trading it in on the new one. Bear in mind that if you buy it out, you DO pay sales tax on that balance, so even though trading it in reduces the taxable price of the new car, you're still going to be paying sales tax on the buyout as well. And possibly a title and registration change fee twice, once on the buyout to put it in your name, then again on the new car. In some states that's trivial, it others the title fee can be $500.
You need to compare the buy-out value with the price you could get selling the car, and the time and effort that might take. If you have a CARMAX location near you, stop by and ask them what they'd pay for the car, just tell them it is yours. That's a real number (and usually a quote good for ten days) rather than some estimate from Edmunds or KBB as to what a private sale might bring. If there's no CARMAX around...use those two web sites, see what a private sale for your car, your mileage, your condition and area might bring.
In general if you have significantly less mileage than what was allowed on your lease, yes, you can make money by buying the car out, and then selling it again, or trading it in on the new one. Bear in mind that if you buy it out, you DO pay sales tax on that balance, so even though trading it in reduces the taxable price of the new car, you're still going to be paying sales tax on the buyout as well. And possibly a title and registration change fee twice, once on the buyout to put it in your name, then again on the new car. In some states that's trivial, it others the title fee can be $500.
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