limsilas

Hi all, the lease on my 2015 S4 is up in a month, and because it's relatively low-mileage (16K) I took it to CarMax hoping to get a good offer. However, they offered me $3K BELOW my buyout price. Now, I know that my buyout price is different from CarMax's buyout price, but because it was a Saturday, they couldn't call Audi FS to obtain their buyout price. To get that information, they said I would have to bring the car back on a weekday.

Is it safe to assume that CarMax's buyout price is going to be higher than my buyout price? Or if, for some reason, CarMax gets a lower price, there's no way it'll be $3K lower, right?

superswiss

CarMax will appraise the car and offer what they think it is worth in the current market. The buyout price has nothing to do with it. The residual on your lease was a guess by Audi FS at the time for how much they think the car will sell for at a wholesale auction at the end of the lease. If the CarMax appraisal is lower than the residual on your lease, then you'll be upside down and will have to pay the difference out of your pocket. Now keep in mind, depending on your state, your buyout price may include tax on the residual of the car, so it will be higher than the buyout for CarMax, because as a dealership, they don't have to pay sales taxes when they buyout the car from Audi FS.

limsilas

Thanks for your reply, but I think you misunderstand my question. The buyout price printed in my lease contract only applies if I or an authorized Audi dealer wishes to purchase my vehicle. However, Audi also permits third parties to purchase the vehicle directly from Audi, i.e., to buyout the contract--but such third parties are forced to pay a different buyout price. There are at least two other members of this forum who have reported the third-party buyout price to be no more than a couple hundred dollars different from their own personal buyout price. My question is whether it is safe to assume that the third-party buyout price will be greater than mine.

The end game here would be to sell the car directly to CarMax, have them deal with Audi FS themselves, and simply cut me a check for the difference, if, of course, their offer is greater than their buyout price. But given that their offer is $3K LESS than my buyout price, I just don't see that happening.

superswiss

Well, there may be additional cost that Audi forces on a third-party buyer, so yes it could be possible that CarMax's buyout will be slightly higher than yours.

limsilas

That's what I was thinking. But there's no way that CarMax's buyout would ever be LOWER than mine, right? Because that doesn't make sense to me.

superswiss

Well, that goes back to my point on the sales tax. I'm not sure exactly which buyout price you are looking at, but in most states your actual buyout price includes sales taxes. Only in states where sales tax has to be paid on the full amount of the car upfront will it not be included in your buyout price. Where are you located? I think Texas is one of the states where a lease requires the full tax to be paid, but for example here in CA, we only pay tax on the monthly principal, but then at the end if we wish to buyout the car, we have to pay the remaining tax. So you should really call Audi FS or check their website to determine your actual buyout price. If your buyout price includes sales tax, then CarMax's buyout price won't, so it will be lower. Audi dealership and third-party dealerships don't have to pay sales taxes when they buyout a car. It's also possible that CarMax can negotiate a lower buyout if they have leverage, so long answer short, yes their buyout could be lower than yours.

limsilas

I'm in CA, and Audi FS told me that my buyout price does not include sales tax. So you're right, if I were to buy out the car myself I would have to pay sales tax on top of the buyout price; but I think CA has a 10-day grace period where, if I resell in that time, then I don't have to pay that sales tax. But if CarMax buys out the car directly from Audi, they also don't have to worry about sales tax since they have a dealer's license.

At least, that is what I was told. I'm trying to compare my buyout price, which doesn't include sales tax, to CarMax's sales price, which also wouldn't include sales tax because they're a dealer.

superswiss

Yep, that's correct. So if they gave you the before tax buyout price than you are comparing the right one. And yes you are correct in CA you have 10-days to resell the car to avoid the sales tax. I forgot what the transaction type is called, but you would have to correctly initiate that with Audi FS, otherwise they would be obligated to collect the sales tax from you. So, my guess is CarMax doesn't want the car for their lot, so they offered you wholesale minus some profit for them and are going to auction it off, hence their appraisal ends up quite a bit lower than your buyout. It's probably unlikely that their buyout will be $3000 lower than yours.

limsilas

Thanks! This is exactly the opinion I'm looking for. Obviously the only way to know for sure is to go back down there on a weekday, but I don't feel like taking the time off work to do that.

If anyone has firsthand experience comparing a third-party dealer's buyout price to their own buyout price, that would be greatly appreciated!

superswiss

Not only that, but to make this worth your time and actually get a decent amount of cash out of this, their buyout would have to be more than $3000 lower than yours, otherwise there's nothing in it for you. Best option would be to find a private buyer in the next month, who is willing to pay more and then buyout and transfer the car within the 10 day window.