Here's what you do: After finding a buyer, get him to mail a check for the buyout amount to the leasing company. Once you receive the title (the leasing company will only send it to the person leasing the car), sign it to release your interest in the vehicle and give the title to the buyer. The buyer can then register the car and pay sales tax at that time. Be careful here, however. If the buyer waits longer than 10 days, the state might try to charge you both sales tax, which would wipe out your profit.
A way to prevent this, according to the Auto Club of Southern California, is to pay the sales tax and DMV fees as soon as possible and then return to conclude the deal with the title in hand. This transaction is called a "lease buyout transfer." Contact your state's DMV for more details.
3. Make a down payment on your next car. In this scenario, the equity in your current car becomes a cash down payment for the new one. Once you know you have equity, you can take your car to any dealer to begin a new lease or sales contract. Negotiate just as aggressively as you normally would. Not all dealers will offer you the same amount for your leased-car buyout, so you might have to shop around for the best offer. It should be close to the Edmunds.com trade-in price. Weintraub says you might get more money if you are going "brand to brand," meaning selling a Toyota to a Toyota dealership, although any dealership can handle the transaction.
It's still important to make sure all the numbers add up, however. Agree on the exact amount of equity you will receive and look for that amount in the down payment box on the contract. Alternately, you can also use the equity to pay the "drive-off fees" to begin a new lease, rather than pay that money out of pocket.
A Reason To Consider Leasing?
In the past, some experts criticized leasing as being too expensive and restrictive. But with high used-car values and a leasing market that has gone from dead to dynamic in the last couple years, it might be time for a second look.