Trade in of X5 on a new lease in Illinois

armitagemike

We own an X5 that we want to trade in/sell and lease a new one. It's worth between 27 and 30K. We don't want to buy a new X5 and would rather lease. I've read on the forums that we should put as little money down as possible on a lease for a variety of reasons.

1) Should we sell the car outright to the dealer and take cash from them?
2) Selling the car to a private party is less desireable with the amount of money involved.
3) Are used car dealers (like a CARMAX) a better option for selling high value cars?
4) Does anyone know the tax ramifications if we sell the car to a dealer vs. private party?

Thanks!

Michaell

armitagemike said:

We own an X5 that we want to trade in/sell and lease a new one. It's worth between 27 and 30K. We don't want to buy a new X5 and would rather lease. I've read on the forums that we should put as little money down as possible on a lease for a variety of reasons.

1) Should we sell the car outright to the dealer and take cash from them?
2) Selling the car to a private party is less desireable with the amount of money involved.
3) Are used car dealers (like a CARMAX) a better option for selling high value cars?
4) Does anyone know the tax ramifications if we sell the car to a dealer vs. private party?

Thanks!

1. Yes
2. Correct .. plus the time and effort necessary to sell private party
3. You can use CarMax to get an offer that you can take to the BMW dealer so they won't low ball you. I did this a couple of months ago when we traded in my wife's Mazda for a new Subaru Outback. CarMax offered $13,000 to buy the Mazda outright; the Subaru dealer initially offered $10,500 in trade. When I showed them the written offer from CarMax the Subaru dealer bumped the trade value to $12,500
4. It depends on what state you live in.

We absolutely recommend getting the cash value for the trade in, less any up front costs for the lease of the new car (first payment, acquisition fees, dealer fees, etc.).

armitagemike

Thank you very much for your answer. Sorry for not being complete here. - we live in Illinois. If we trade in the car to the dealer do we have sales tax to pay if we get money back?

Michaell

armitagemike said:

Thank you very much for your answer. Sorry for not being complete here. - we live in Illinois. If we trade in the car to the dealer do we have sales tax to pay if we get money back?

I don't believe so.