Lincoln Lease

kstros4kstros4 Member Posts: 1
edited February 1 in Lincoln
I leased a Lincoln Navigator in 2018. My lease was coming due in January of 2021. I contacted LAFS (I think they are the same as Ford financial) in December 2020 and told them I was trading my Lincoln in and they said OK and sent me the Lease Buyout amount. I then traded in my Lincoln to for a new Cadillac.

A month after the transaction was complete the Cadillac Dealer called me back and said I can't trade the Lincoln in and I was only allowed to purchase it which would require me to pay sales tax before I could trade it in. I know of several people who have traded in leases before they expire, so I am a bit confused.

I talked to Lincoln Financial who said that is incorrect and I can trade in my vehicle. They asked me to contact the originating dealer, and they said the same thing the Cadillac dealer is telling me.

Something feels weird here and ANY help would be greatly appreciated.

Comments

  • stickguystickguy Member Posts: 41,705
    you can trade in a lease. Maybe the confusion (and I am sure that this varies state by state) is the tax credit.

    I am in NJ. Last year I looked into trading in a lease early. They had no problem taking the car, but I would not get credit against the sales tax on the new one (if you trade in a car you own, even with a loan against it, you net the trade in value against the sales price and only pay tax on the difference). So trading in a lease, you get credit for any equity you have, but pay full sales tax on the purchase price of the new one.

    if the leasing company is willing to do it, then there really is no reason it can't be done (there are some lease companies I believe that won't allow it, meaning you would have to buy it out yourself first). You would get hit with sales tax on the purchase of course, but get a credit (if your state offers that) on the purchase of the new.

    long rambling way of saying, the tax implications might get weird, but trading in a lease should be no different mechanically than trading in a car you have a loan against. They get the payoff number from the finance company, you sign papers, they pay it off, done.

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  • au1994au1994 GAMember Posts: 2,086
    I’ve traded in leases as well. I am in GA and never had a problem. The finance company and dealer should know about the tax ramifications for your particular state. Sounds like somebody missed something, likely the dealer didn’t realize that the pay off didn’t include and tax, and is looking to you to make them whole.

    As long as your paperwork is in order, I wouldn’t worry.

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  • qbrozenqbrozen Member Posts: 29,098
    I does not matter one whit what the originating dealer states. Lincoln Financial owns the vehicle, so the only valid claim on the matter is from them.

    My position if this were me: I’d call the Caddy dealer and explain they are incorrect and Lincoln Financial is perfectly willing to let them buy the vehicle, and if they still find themselves unable to complete the transaction, then they can unwind the deal, take back their Caddy and give me back my Lincoln. Oh, and their new Caddy now has 2k miles on it (you say that even if it does not).

    ‘21 Camaro LT1, '07 ML63, '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '14 Town&Country Limited. 54-car history and counting!

  • stickguystickguy Member Posts: 41,705
    au1994 said:

    I’ve traded in leases as well. I am in GA and never had a problem. The finance company and dealer should know about the tax ramifications for your particular state. Sounds like somebody missed something, likely the dealer didn’t realize that the pay off didn’t include and tax, and is looking to you to make them whole.

    As long as your paperwork is in order, I wouldn’t worry.

    I do know that the dealer does not have to pay sales tax on the buyout. Only a retail purchaser does.

    2020 Acura RDX tech SH-AWD

  • kyfdxkyfdx Moderator Posts: 187,616
    As noted, the ability to trade-in is controlled by the owner of the vehicle.

    US Bank is a big pain, when it comes to that.

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