DWP

Not the cap cost, just on the amount he pays. He has already paid tax on every lease payment. And I believe Larry's explanation - makes perfect sense that if you resell within "x" days, its only the 2nd buyer who pays tax on whatever price he pays for the car.

ya know, this makes so much sense, I am amazed the DMV allows it!

LMGotts

Sample scenario:

- I pay off (buyout) the car from AFS for $50K
- I resell the car in 4 days for $44K
- My buyer pays sales tax on $44K to the state
- State misses out on $6K of potential taxable sales

??

Twelve Rings

...guess we all have our methods of madness when dealing with analysys of the unknown, and/or comprehension of the unfamilar. As a new-car-only buyer, and having little history of private selling, I guesss I've learned something new here with regards to a DMV grace period. Whatever...glad you could help him out.

Twelve Rings

Another Q- How does the state know how much your buyer paid for the car?

phred

When you sold the car, you were supposed to transfer ownership AND report the sales price to the state. But it came down to whatever number the two parties agreed to write on the form.

I'm sure many cars were sold for $100 for a long, long time.

Twelve Rings

...some time ago, I know that the amount listed on the pink was typically dictated by the purchasing party/omitted by the seller. Hence, the buyer had the liberty of listing the purchase price at whatever amount they saw fit (i.e., were willing to pay 8.25% on). Now, my understanding is that the DMV will dispute sales prices that seem overly out-of-whack (RS6 with 12K miles reported sold for 30K, or something like that), but it does underscore another flaw in the system -- using Larry's scenario, assume the buyer list his or her purchase price at $39K, even though he paid $44K to the seller. Given the soft market, not out of the realm, and now the state's not just "losing" their percentage of 6K in tax, but 11K in a taxable asset flip...it is strange, to say the least. But we know they find other less intrusive ways to get their share. ; )

LMGotts

We're all honest, right?

It can actually be another "selling point"...if the seller agrees to say that it was sold for a lesser price...one would think that it's not a terribly difficult paper trail to discover for the state though, if they want to work at it.