Buying out a leased car

[Acorn]

The lease on my daughters car is coming up on my daughters car. My wife and I are considering purchasing it. My wife co-signed the lease since my daughter was just out of college and had no credit history.
If we buy the car can we buy it from the dealer being my wife is on the note or does my daughter have to buy it and we buy it from her?
If we buy it is the price what she was told would be the buyout or what the value is now being the used car market is so hot right now?
Sorry if it sounds stupid but I’ve never dealt with this before.

 

[hittman]

You should ask a lawyer with contractual experience just to be safe. Experience in your state or whatever state the contract was executed in.

I’m not one.

Seems since your wife and daughter are co-debtors that either or both of them can lay claim to purchasing it.

The price should be based on the lease agreement …… doubt that agreement states “fair market value” but you wont know until you read the agreement.

Be interesting what your lawyer says.

 

[Acorn]

IIRC the buyout was around $16–17K but KBB shows the value at $23K here in Pa. sales tax is collected on the selling price (7% in Allegheny Co.) so if she had to buy it and sell it to us the state would collect double the tax unless s he was charged tax at the beginning. I wasn’t there so I don’t know.

 

[RSIno1]

IIRC the buyout was around $16–17K but KBB shows the value at $23K here in Pa. sales tax is collected on the selling price (7% in Allegheny Co.) so if she had to buy it and sell it to us the state would collect double the tax unless s he was charged tax at the beginning. I wasn’t there so I don’t know.

Check your state rules on inter family transfer - CA it's only the $10 transfer and no tax or smog check. Most states charge a sales tax monthly on your lease fee. When it gets sold there will be sales tax on the current value. Leases are weird - They don't just let you hand them back the car. It needs to meet their specs for "normal" wear & tear. When there is a glut of cars the dealer will nit pick every extra mile and stone chip to drive up the price you need to pay to have them take it back so you decide to buy it. Some leases do have an escalation clause where they can bump your buy out price if the market has changed or the car is in really great shape. Bottom line with leases the dealer always wins.

 

[Hawk-in-Wi]

I just went thought this , I had a 2018 F150 Ford red carpet lease , with Ford, the buy out at the end of the lease is good for the lessee and or the Ford dealer ship where it was purchased , so at the end of my lease i would have had to pay Ford, the buy out price plus a final disposal fee of about $400 plus sales tax on the total of those 2 ,,

Because of the shortage of trucks, My Ford dealership asked me to sell them back the truck, Instead of me keeping the truck, plus ( no sales tax due if done before you hit the finale 3 months of the lease , or any more payments ) so I took my truck into them , they gave it a quick look see and I walked out free and clear of my lease and with a check in hand that made me smile all the way to my bank

 

[SamV]

I have only leased once, a few years ago. My lease stated exactly what the purchase price would be at the end of the lease. In my case, the actual value of the car was actually a few thousand dollars more than the contract price, and I should have bought it and turned around and traded it on another vehicle, but I stupidly did not do it. A couple of weeks later I bought another car. It would have been nice to have another two or three thousand dollars down.

In a great deal, my brother in law had a new company provided Ford Expedition on lease. After about six months, he got a promotion and had to take a different vehicle. The company had prepaid a significant amount on the lease, and he was allowed to purchase it for the buy out. So he did for less than a third of its value. He let his dad take the deal.

 

[Captain America]

What we would do is a courtesy trade, your daughter will pick out her new car and "trade" her lease on it(the dealership is buying it), when she does the deal you'll need to be there, they will then sell you the car as a used car. When we do this there might be some fees from the lease company or if the customer wants the used car to be certified then there will be a cost to run it through the shop. You will only have to pay taxes once on the purchase. In PA she pays 9% of the lease payment as tax every month.