Automotive

Lease is coming to an end...

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  • Nov 19th, 2017 4:15 pm
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[OP]
Sr. Member
Jul 22, 2015
551 posts
165 upvotes
Ontario

Lease is coming to an end...

So hubby's lease is coming to an end in January. He has a residual of approx $15,000. A family member is wanting to purchase the car.

Has anyone gone through this that can give me any insight on how this works? Do we buy the car from the dealer and then sell to our family member or does family member buy directly from dealer (note: they want to pay the residual amount, plus tax)? I'm meeting with the dealer next month and I want to sound like I know what I'm doing...LOL!
10 replies
Deal Expert
Aug 2, 2004
31323 posts
5538 upvotes
East Gwillimbury
I suggest you call finance company directly and ask them for the procedure. The car is owned by the leasing company, not the dealer. They only facilitate the paperwork.
Deal Addict
Jan 15, 2017
2904 posts
2256 upvotes
Call the leasing company quickly. The family member may need to take over the lease and then go through the buy-out process (pay the tax and fees). Some leasing companies do not allow lease transfers in the last month of the lease, as the lease is actually paid in full. So, there may be a small window in which to take over the lease.
Deal Addict
Aug 29, 2011
4736 posts
2126 upvotes
Mississauga
Depending on how well you know/trust your family member, the easiest option would be for your husband to buy it out then sell it to the family member.
Deal Expert
User avatar
Jul 30, 2007
25726 posts
10769 upvotes
Toronto
but the family member will have to pay the taxes 2x per se (orig. paid once and need to recoup that from that sale to the family member, depending on the relationship of this family member).

You can transfer ownership without paying the retail sales tax when receiving a vehicle from a:

spouse
parent or step-parent
grandparent or step-grandparent
son or step-son
daughter or step-daughter
grandson or step-grandson
granddaughter or step-granddaughter
son-in-law
daughter-in-law
father-in-law
mother-in-law
sibling
half siblings (siblings with a common parent)
adopted siblings (siblings with a common parent through adoption)
Deal Addict
Jan 15, 2017
2904 posts
2256 upvotes
The issue is double taxes. Your husband cannot sell a car that he doesn't own. When you lease a car, you don't own it. So, the first step is that your husband has to buy the car from the leasing company. This will require paying a buy out fee, the residual and the taxes. Then, when the family member buys it (unless it is one noted above), taxes will be paid again.

Is your husband planning to lease from the same dealer again? There is a chance, depending on the dealer, that if your husband was leasing again that the dealer would be okay with selling the vehicle to the family member at residual plus fees and taxes. The dealer may simply charge an admin fee for the transaction. The dealer is not obligated to do this but depending on the vehicle and the estimated reconditioning costs, and your hubby's relationship with the dealer, the dealership may.

Transferring the lease now is your best bet. The family member will have to pay the last lease pmt, lease transfer fees, and then buyout the car and pay the residual, lease buy out fees and taxes. Make sure that the family member is aware of this so they know how much this car is actually going to cost to buy.
[OP]
Sr. Member
Jul 22, 2015
551 posts
165 upvotes
Ontario
Thanks everyone for the advice. I will definitely call the leasing company tomorrow to see what they say!
booblehead wrote: but the family member will have to pay the taxes 2x per se (orig. paid once and need to recoup that from that sale to the family member, depending on the relationship of this family member).

You can transfer ownership without paying the retail sales tax when receiving a vehicle from a:

parent or step-parent
The person buying the car would be my husband's father. So it's best for my husband to pay the approx $15,000 + tax + fees and then transfer ownership to his father who would pay us exactly what we paid the leasing company. He then would not pay tax a second time since he is a family member. This would be the best way to do this? Thanks for your advice!!
[OP]
Sr. Member
Jul 22, 2015
551 posts
165 upvotes
Ontario
skeet50 wrote: The issue is double taxes. Your husband cannot sell a car that he doesn't own. When you lease a car, you don't own it. So, the first step is that your husband has to buy the car from the leasing company. This will require paying a buy out fee, the residual and the taxes. Then, when the family member buys it (unless it is one noted above), taxes will be paid again.

Is your husband planning to lease from the same dealer again? There is a chance, depending on the dealer, that if your husband was leasing again that the dealer would be okay with selling the vehicle to the family member at residual plus fees and taxes. The dealer may simply charge an admin fee for the transaction. The dealer is not obligated to do this but depending on the vehicle and the estimated reconditioning costs, and your hubby's relationship with the dealer, the dealership may.

Transferring the lease now is your best bet. The family member will have to pay the last lease pmt, lease transfer fees, and then buyout the car and pay the residual, lease buy out fees and taxes. Make sure that the family member is aware of this so they know how much this car is actually going to cost to buy.
Thanks for the advice!! There is a good chance that my husband will purchase or lease his next vehicle from the same dealership...well not the same dealership, but the same make and model from a different location since we moved and prefer a dealership that is closer. I'll look into what you suggested. Thanks!
Deal Addict
Aug 10, 2013
2582 posts
1854 upvotes
I did a father to son transaction last year....was free and no taxes paid.
Smash that like button!
Deal Addict
User avatar
Jul 26, 2007
4565 posts
2180 upvotes
Toronto
6mthatch wrote: I did a father to son transaction last yedar....was free and no taxes paid.
Don't forget the hassle of going into MTO, 2hr+ and oath commission fee +-$40 and registration paper $10.

Might be easier and save $50 and your time not stepping into MTO by transferring the lease unless the crummy dealer wants $500 for doc fees...
Deal Addict
Aug 10, 2013
2582 posts
1854 upvotes
Uh there is none of those.
Go first thing in the am so you don't wait 2hrs. There is no oath fee. You go in with the person.
There would be fees for transferring the lease over. The cheapest way is for son to purchase vehicle at end of lease and transfer as gift.
Smash that like button!

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