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lease takeover question
Hello,
I'm interested in a 2004 3-series w/ 37K on it. The guy is asking 29,900 or taking over his lease of $415/month for the remaining 15 months (22,000 residual at end of lease)
I'm considering the lease takeover option and wondering what risks/things I should be aware of upfront? The guy said he's paying all costs, transfer fee's etc.
If my calculations are correct, leasing it then buying it at the end is cheaper than the asking price (415 * 15 = 6225 + 22,000 = 28225), but would I have to pay tax on the end amount?
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Quote: Hello,
I'm interested in a 2004 3-series w/ 37K on it. The guy is asking 29,900 or taking over his lease of $415/month for the remaining 15 months (22,000 residual at end of lease)
I'm considering the lease takeover option and wondering what risks/things I should be aware of upfront? The guy said he's paying all costs, transfer fee's etc.
If my calculations are correct, leasing it then buying it at the end is cheaper than the asking price (415 * 15 = 6225 + 22,000 = 28225), but would I have to pay tax on the end amount? | 1) How many miles are left on the lease? If the car turns out to be a piece of crap, and you decide to turn it in (one of the benefits of a lease assumption), you don't want to get hit with a bunch of mileage charges to do that.
2) If your intention is to actually buy the car, have him find out what the buyout number is right now... If he is willing to have you take over the lease, he should sell it to you for whatever the buyout number is... Which should be less than the $28,225.
regards,
kyfdx
| | Reply » lease takeover question |
Quote: | If my calculations are correct, leasing it then buying it at the end is cheaper than the asking price (415 * 15 = 6225 + 22,000 = 28225), but would I have to pay tax on the end amount? | Yes, you've to pay tax on the end amount. Just curious, won't you've to pay tax on his asking price as well?
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Quote: | Yes, you've to pay tax on the end amount. Just curious, won't you've to pay tax on his asking price as well? | I'm not sure, I thought it would be considered a private sale, no tax
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Tax is all dependent on the state you live. Each is different.
In CA you have to pay a tax when you go to register the car. so when you get a loan to buy the car it will not be included in the purchase price.
| | Reply » lease takeover question |
Quote: | Yes, you've to pay tax on the end amount. Just curious, won't you've to pay tax on his asking price as well? | The seller likely has taken into account the taxes due on his buyout in his selling price. I thought that private sales in Ontario are still subject to PST? If this is the case, for sure you should try to work on paying out BMWFS directly through a dealership, otherwise you will be paying the PST twice.
You are not obligated to purchase the car for his buyout, and he is not obligated to sell at that figure either. It only determines (if you are paying out the car) whether the seller has equity or not......
Make sure that it is a BMWFS lease. If it is not, you are likely looking at an open end agreement, and you are guaranteeing the buyout. You should definitely make sure that you request and receive a copy of the original lease. It will tell you km allowance, and excess km charges, confirm residual (which is definitely taxable) at lease end.
Also ensure that you are clear with the other party who the security deposit goes back to at lease end.
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lease takeover question