Originally Posted by Pcardad
She will owe the remaining payments on the lease plus the lease termination fee plus any charges for mileage or excess wear and tear. She gets no credit for sales tax as a lease is a rental not an ownership. If she buys the car for the residual and then trades it against the JK she will only pay sales tax on the difference between the trade and the JK TO THE DEALER but she will also pay sales tax on the residual purchase price of the leased car as she has purchased it. If it is simply an early turn-in she will pay sales tax on the entire amount of the new car.
Not entirely true; in NY if the dealership you trade to buys out the lease and retains the car to sell on their lot or sell off to wholesale, you only pay sales tax on the difference between purchase price of the new vehicle and trade in of the old. For example, in January I traded our 2012 Grand Cherokee Limited in for a 2015 Toyota Sienna. We had a 39 month lease, which had 8 remaining payments. The dealership took it on trade for 24,500; my 8 remaining payments and the residual value totaled approximately $22,750. We purchased the Sienna for a negotiated sale price of $39,300; I walked away with $1,750 in equity towards the Sienna and only paid sales tax on $14,800.
Although it is possible to get out of a lease the way I did (and have done two other times in the last), in MOST cases the dealership would rather you pay the remaining lease balance, plus any applicable fees and then they hand the car over to the leasing company as a lease return.
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