CayenneBlack

Has anyone purchased a leased car from a private party. The lease is through Porsche Financial. I am looking at a car that is out of state. I would love to hear your experience.

Some questions that come to mind are:
1. Can I buyout the car outright from the leasing company? If so, do they send me the title in my name right away?
2. Has anyone used the dealership to handle this type of transaction? Are there additional cost?
3. Are taxes and/or other fees collected at the time of buyout from the current state? I know I will need to pay taxes when I register in my state.
4. Will the Porsche dealership tell me all the service\warranty history of the car even if I don’t own the car?
5. What else should I watch out for?

Cheshi143

Yes and no, the lessee can purchase the vehicle at the end of the lease from PFS for the residual on the contract, the lessee can also purchase the vehicle from PFS prior to the end of lease. The lessee can then sell to you. Typically the titles are electronic these days.

Yes, a dealer can assist you with the transaction to include inspection, service and financing. There will be a cost associated with those services. 5% commission would be a reasonable amount plus whatever the service department charges for a pre-sale inspection.

This will vary from state to state. Typically on a leased car, the sales tax is collected monthly on the lease payment. On a purchase it is collected on the sales price of the car.

If the current owner authorizes they should. If you pay them for a pre-sale inspection I would absolutely expect it.

This route may not necessarily get you the best price possible, it all depends on the original sales contract and what the payoff for the car is. I'd use an escrow account for the money since you have mentioned an out of state transaction.

MikeL31

porsche fs wont let you buy the car out from the original owners contract. they would have to get the pay off amount (any remaining payments left + residual) and buy the car from pfs and pay sales tax. once the owner gets the title and sells/transfers it you, you would have to pay sales tax again in the state you're registering the car in. im not sure if pfs allows it, but i know bmwfs does, you can transfer the lease to you for a fee and then buy the car. this route doesn't really benefit you but it will save the original owner on the sales tax.

CayenneBlack

Learn something new everyday. Thanks for the info Cheshi143 and MikeL31. Looks like the best option is for the seller to pay off his lease first and then transfer ownership to me.

SH2

That’s correct however, it’s likely the current lessee has no idea he or she must pay sales tax before selling it to you at which time you’ll then have to pay sales tax as noted in prior post.

CayenneBlack

Yes I’m afraid of that and I have asked the seller that question. .

Thinc2

It seems like your options are:
1) Take over a lease, in which case this seems like a possible good opportunity.

2) If you want to buy a car, buy it from someone who already owns the car, unencumbered. That means this person would have to pay off their lease payments and then buy the car outright (incl sales tax), before selling it you.

From the sound of it, the seller wants to get out of the lease, and option 2 seems unlikely to be the right fit here. All this complication is something the seller should deal with. As a the buyer, you should look at cars that the seller owns outright (unless you plan to take over a lease). Lots of cars out there without these sorts of complications...

sr5959

Seems like the best option here is for OP to transfer the lease into his name, then pay the buyout price to Porsche.

goldduster

+1 for Thinc2. By the time you get done, You'll be better off buying a car directly from a local dealer. You'll save by; 1-seeing, touching and driving it. 2-probably won't be any more costly. 3-You may get a CPO.

MikeL31

thats definitely the best option for the seller/current leaser. bmw fs charges around $500 to transfer a lease to someone assuming they qualify. im sure pfs will charge something similar if not more. unless the seller is willing to eat that cost and give me some kind of incentive to transfer the lease to me so i could buy it, i personally wouldnt do it unless it was a unicorn spec'd car that i absolutely wanted. alot of people on lease trader or swap a lease will cover the transfer fee and throw an extra $2-5k to lower the monthly payments when they want to get out.

onedae

Unless they have recently changed their rules, PFS does not release the original lessee. They will transfer the lease to a new buyer but the first lessee is still contingently on the hook. For pretty much anyone that is a deal killer.

CayenneBlack

Yes I’ve come to that conclusion as well. I called PFS and they said that I can buyout the car, but the title will be issued to the lessee regardless. Then it would be up to me and seller to transfer titles. There is no way I’m doing that!

CayenneBlack

Based on that reasoning, I could see why one would want to sell it rather than have some takeover the lease.

salayc

FWIW regarding the tax question: California has a law (I'm sure it's intended for dealers) that allows the resale of a lease buyout within 15 days and no sales tax is paid. I went through this a few years ago. I just stumbled upon the law, and was able to take advantage of it, although it was not an easy process. It involved a few sit downs with the CA Franchise Tax Board, and some printouts of the law to get them to agree.
Other states may have something similar.

CayenneBlack

Even though it is out of state, if PPI and everything else goes well, I would still drive it before buying it. I would have to fly there which is a little inconvenient. But then again, I get to drive it back and really get to know the car. Also, I always wanted to do a real long road trip (~16 hrs for this trip)