Alan Smithee

For those that have sold a leased car through Porsche FS before the end of the lease term...once the payoff has been submitted, do they release the title 'blank', so it can be sold directly to a third party? Or must it be sold to me, the lessee, first? PFS customer service has been no help, other than to say they will not release the title to anybody but the lessee.

Thanks in advance.

Likemystoppie?

Title goes to you, then you in turn sign it over to the new buyer. PFS is difficult to deal with...

Alan Smithee

Thanks, Chris. Not sure how titles work in Ohio or other states...but is it released 'blank', without an assigned buyer, so that I can designate the buyer? The CS person led me to believe the purchase transaction is strictly between me and PFS, which doesn't make sense...I'd then have to register it in my name and pay taxes on it (which I'm obviously trying to avoid) before selling it to a third party.

ELUSIVE

i've run into that same problem with Audi Financial in the past.
They don't do third party sales.
The buyer of your car must either be you or a dealer. It sucks.

Likemystoppie?

That might be the case, which if in fact it's true- sucks. You might ask your local P car dealer - see if they'll do a quick 'flip' for you as a courtesy. But the dealer must be in YOUR state for it to work.

sandwedge

Just went through an excercise like this with Porsche FS. As far as I'm concerned they're arrogant bastards who I'll never do business with if I can help it. If you're not an existing customer, forget about talking directly to anyone there about the transaction. I ended up having the leaseholder go to a dealer friend of his who guranteed the title through his auto dealership. I then paid the seller for the car and the funds were forwarded to Porsche FS. They in turn held the title for 2 weeks after the lease was paid off, then sent it to the dealer who had to take interim title before he finally overnighted it to me.

jcnesq

Even if PFS gave you title in blank (don't know whether they will), I believe they will have to charge you sales tax on your "purchase" of the vehicle from them (which I assume is why you are asking these questions), and at least technically that is a taxable sale and your sale in turn is taxable. I think finding a friendly dealer (maybe one of those independent used car places would be more amenable to helping for a small fee-??) as an intermediary is the best solution.

Alan Smithee

The CA DMV collects sales tax when registration is transferred, so PFS won't collect any taxes regardless. But, yes, I'm trying to avoid the time and hassle of having to register and pay sales tax on a car that I'm going to turn around and sell to somebody else.

I once purchased a used BMW from an individual with a loan through BMW FS, and BMW FS had no problem releasing the title directly to me. Doesn't sound like PFS works the same way, but I'm hoping somebody that has experienced this in CA can provide a definitive answer.

ELUSIVE

I leased a Subaru one time through Chase and was able to find a buyer for the car and Chase sold the car directly to them. I was out of the lease and they sold the car. It was great.
I've tried to do this same thing with Audi (twice) and failed miserably.
Just call up PFS and ask them if they do 3rd party sales on leased vehicles. If they say no, then you're probably stuck paying registration and sales tax on the purchase price just to sell it to someone else. I'm not sure why these companies have these policies...but they suck.

jcnesq

Not true - with a lease, PFS is selling to you - they are required to collect sales tax as they are registered as a seller in the state and the transfer to you is a retail sale. A dealer can use the resale exemption to avoid that, but you can't use it, so that is why I suggested a friendly dealer intermediary.

Re the used BMW, there was a loan, not a lease, so the prior owner had paid the sales tax up front and there was no issue when the lender released it.

Paul523

Is the PFS lease transferable? maybe attack it that way- if it's too close to the end of a lease sometimes they don't allow lease assumptions but check it, your buyer could assume lease then invoke buyout option as soon as the lease is assumed into their name... work out a subsidy or refund to the buyer separately...

Alan Smithee

Jim - That doesn't seem right; a 'registered seller' handles DMV paperwork and taxes, and doesn't release the title (as I'm told would happen if I submitted the "payoff amount" to PFS). But if that is in fact the case, does the "payoff amount" then include sales tax?

As ELUSIVE stated above, I don't think this is a lease vs loan thing. I dont see any reason why PFS can't sell the car directly to a third party (other than try to force me to trade my car in for another in order to get out of it).

jcnesq

Alan - if PFS accepted your instruction/release and sold the car to the third party, THEY would collect the sales tax and transfer title to the third party; DMV wouldn't collect the use tax because a sales tax was paid.

PFS holds title in their name. A lease is treated as a "continuing sale" under California sales and use tax law; that's why you pay sales tax on each lease payment (if you made any capital cost reduction on purchase, you would have paid sales tax on that amount at the time). It's sort of like selling the car piece by piece. When you terminate the lease, PFS has to transfer title to someone and they either have to collect sales tax, or they have to have a resale certificate (as is the case when a dealer takes a leased car in trade and pays off the leasing company).

Technically, if PFS closes out your lease and transfers title to you, that's a taxable sale, and if you then transfer to someone else even immediately thereafter, that's another taxable sale. I think you are thinking "why can't I get the pink slip endorsed over, and then I can just slip my buyer in and have him register it" - but I suspect the paper flow (and sales and use tax flow) probably won't work out like that. PFS could do it if they wanted to, but they are probably inflexibly bound up in their own procedures and I doubt they will cooperate; but you are right, PFS could sell the car to the third party and avoid that double tax.

Downforce

Alan Smithee: It is simply for Porsche to make more money and less liability and hassle on their part. If you need someone to handle the title of a transaction to avoid taxes I can help you out. My partner has a license and is located in Los Angeles.