How to purchase Grandmother's Leased Car

[Landsman]

My grandmother is currently leasing a car and doesn't plan to drive when her lease is up. I'd like to purchase the car when her lease is up because the car has been garage kept and has less than 4,000 miles on it after almost 3 years of driving. Given the low miles, the car is worth more than the lease end value.

Is there a way for me to purchase the car directly or does she need to purchase the car, then transfer it to me? Any ideas on how best to do this would be appreciated. The car is a Honda Accord in case that makes a difference.

[bluetrekrider]

The lease contract has a purchase price within it. This price represents the cost to buy at lease end. You simply write a check to your grandmother or to the dealer; whatever they suggest. The dealer should take care of the transfer of title, registration, etc.

[JustBill]

You need to read the lease agreement. It's quite possible the lease company will want notice a certain days from lease end that your grandmother intends to purchase the car. Likely the purchase transaction can/will take place without a dealer being involved. That's got to be worth something.

[Landsman]

Thanks for the replies.

I'll have to call the lease company with my grandmother to see what we can do. I briefly looked at the lease agreement and thought it said something about the leasee being the only person that can purchase the car at lease end, but then I saw posts here from folks that sold their leased cars to a third party. Dealers around me are selling that car for $2 - 3k more than the lease end value and her car has significantly less miles on it, so I don't want to pass this up.

[ohiost90]

Might want to offer grandma a grand or so more than lease purchase? Just saying...

[Jay69]

Not sure what state you are in but in our state every time the car is sold the state gets its 6.5%. Somthing to keep and eye on.

good luck

[OAG]

Not sure what state you are in but in our state every time the car is sold the state gets its 6.5%. Somthing to keep and eye on.

good luck

Some States have a "close relative" or some such exemption - Something else to keep an eye on.

[rob]

I would call the lease company and see if they have a better offer (I did this once a long time ago).... The last thing they really want is a car to deal with so they will sometimes make an offer that is lower then the lease purchase option - especially if it's a type of car that is lower in value then they projected like maybe an SUV or alike.

[averageJoe]

You can have Grannie buy it at your/her price (you will have to pay sales tax again even though that was paid up front in the lease...if your state has sales tax) and then you buy it from Grannie for a buck and cost of paperwork, title etc.?

[Landsman]

You can have Grannie buy it at your/her price (you will have to pay sales tax again even though that was paid up front in the lease...if your state has sales tax) and then you buy it from Grannie for a buck and cost of paperwork, title etc.?

Yes, at the worst I would give her the money to purchase the car, then have it transferred to me. I didn't know if there was an easier way. I certainly don't want to pay PA's sales tax twice. I'll give the lease company a call next month to see what we can work out.

I would call the lease company and see if they have a better offer (I did this once a long time ago).... The last thing they really want is a car to deal with so they will sometimes make an offer that is lower then the lease purchase option - especially if it's a type of car that is lower in value then they projected like maybe an SUV or alike.

It's a Honda Accord, so they hold their value pretty well. I don't know that they will come down off the lease end purchase price. It's already about $2 - 3k lower than what this car is selling for at the local Honda dealers.

Thanks for the responses.

[Cherokee8215]

I'd be careful with the sales tax issue. Typically only the original lessee can buy out the car per the contract, at least with the major manufacturer's financing arms. Either you buy it from her at the lease buyout price and both pay your state's sales tax, if any, on that value, or say she instead agrees to buy it out and sell it to you for $1 (you slid her the actual value in cash under the table). In my state (PA), when you transfer a car title, the DOT checks the sales price vs. "book value". If your sales price is lower than book value by a considerable amount, and you don't have a decent excuse as to why it's so cheap ("it rolled off a cliff and a bear lived in it for a year, here are the photos") they will charge you the full sales tax anyway. So you can't pull a fast one.

In other words, grannie is going to have to pay tax when buying from the leasing company, then you will have to pay it when buying from her, both amounts based upon the full vehicle value. The "double sales tax" may lower the appeal of buying this low mileage car off-lease.

[Landsman]

My grandmother is currently leasing a car and doesn't plan to drive when her lease is up. I'd like to purchase the car when her lease is up because the car has been garage kept and has less than 4,000 miles on it after almost 3 years of driving. Given the low miles, the car is worth more than the lease end value.

Is there a way for me to purchase the car directly or does she need to purchase the car, then transfer it to me? Any ideas on how best to do this would be appreciated. The car is a Honda Accord in case that makes a difference.

I'm in PA also. If my grandmother purchases the car (with my money), then we transfer it to me. Can't we transfer for $1 as a gift to avoid the double sales tax or would PA still expect sales tax based on the full value of the car even though it was sold for $1?

[sscritic]

I'm in PA also. If my grandmother purchases the car (with my money), then we transfer it to me. Can't we transfer for $1 as a gift to avoid the double sales tax or would PA still expect sales tax based on the full value of the car even though it was sold for $1?

If it's a gift, why would you pay $1? That proves it is not a gift. You even call it a sale yourself (having trouble making up your mind?). And if she is using your money, how is it a gift from her to you? And if you sign a contract that says I will give you a gift of $xxx if you use that $xxx to buy a car and also give me that car as a gift, how are there any gifts at all? I don't see two gifts and I don't see one gift; I see a contract. But maybe it really isn't a contract as you are not paying granny anything for all her work. I think a contract needs consideration. Hmm.

Oh, got it. The $1 you pay granny is the consideration. That definitely makes it a contract (I think).

[sscritic]

And granny will file a gift tax return, right? Maybe the car isn't worth $13,000 (this year) or $14,000 (next year). Just tell granny not to send you anything for Christmas or your birthday if she is close to going over her annual exclusion amount.