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LEASING A VEHICLE IN VIRGINIA

Posted on October 11, 2011 at 11:42 PM
 
 
 
 
 
 
 
 
If you are leasing a vehicle in Virginia or are considering doing so, this segment provides comprehension of the titling and registration aspect of leasing a vehicle in Virginia.  In addition to that; light will be shed on some challenges that can transpire when leasing a vehicle in Virginia.
 
 
 
When you are leasing a vehicle in Virginia, that vehicle is subject to Virginia's vehicle titling and registration laws (even if the leasing company is out of state).  In regards to titling and registration the lessee doesn't own the vehicle, the lessor does.  With that being said, the lessor (the leasing company), is responsible for allowing the lessee to get the vehicle titled and registered in their designated state.  Please be advised that as the lessee, you should use due diligence, to ensure that the leased vehicle is titled and registered properly. 
 
The following entails areas that you should be mindful of when leasing or transferring a leased vehicle in Virginia:
 
  • The leasing company sometimes assume responsibility of the costs of the vehicle registration (alleviating you from costs of paying for decals every year, two years, etc.)
  • As the lessee, you are not the vehicle owner, so on the title, you will not appear as the "owner'.  On the registration card, the same matter applies, however you will be listed under the lessor, along with your address and the garage jurisdiction of the vehicle.
  • As a lessee, you don't have to pay property tax in Virginia, because technically you don't own the vehicle.
 
 
The following are challenges that sometimes occur when you are leasing or transferring a leased vehicle in Virginia:
 
  • Dual payment of sales tax may be collected (PLEASE DON'T CONFUSE SALES TAX WITH PROPERTY TAX).  For example, when the lease was first taken out, you may have paid sales tax and then if you buy the lease out, you may pay sales tax again.  The sales tax is transmitted to the DMV. 
  • If your leased vehicle was originally titled out of state and you are transferring the vehicle to Virginia, you may have to pay sales tax (depending on the situation and how long you've been leasing the vehicle)
  • If the leased vehicle isn't titled and registered properly, a property tax mishap might occur; alarming you that you owe property taxes for the "leased vehicle".  Note: once again, you don't own the vehicle, so you don't have to pay property taxes.
 
 
 
Wisdom & Authority Titling Solutions is committed to assisting you with any titling and registration concerns that you may have with your leased vehicle in Virginia.  If you are transferring your leased vehicle to Virginia; you owe it to yourself to be in the know and Wisdom & Authority Titling Solutions  will show you how.
 

Categories: LEASING A VEHICLE IN VIRGINIA

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224 Comments

Reply Shanel
12:39 PM on March 6, 2012 
Thanks for your feedback! Your comment is so true. If a person is staying in Virginia for only a short period of time, then leasing a vehicle would make sense financially to them. The military,business people from out of the area, etc. would really benefit from this.
Reply Dan
2:40 AM on July 15, 2012 
Hi,

I am assuming a lease that the lessee lives in Va and paid the sales tax upfront. when I go to register it in Va will I have to pay sales tax? I am assuming not because the lessor stayes the same.

Also, I might be moving to Georgia, if I register the car then in Georgia will I have to pay sales tax again?
Reply Shanel White
2:55 PM on July 15, 2012 
Hi Dan,

I hope I understood your question carefully pertaining to sales tax and a leased vehicle. There are two scenarios involved and you should fall under one of them.

1. If you aren't the lessee and you bought the vehicle from someone who was leasing the vehicle and they sold it to you, then you will be required to pay sales tax in Virginia or Georgia (whichever state you will be getting the vehicle titled into), because you are taking ownership of the vehicle and you didn't pay the sales tax, the other party paid it.

2. If you are referring to yourself as the lessee and you already paid sales tax and you relocate to Georgia, then you won't have to pay the sales tax again. However, you will be required to show proof of the sales tax that you paid. I hope this helps. If you need further clarification, don't hesitate to contact me!
Reply Zach
6:22 PM on October 6, 2012 
Feel that I should mention that not paying property taxes on a leased vehicle is a half truth.

The leasing company will pay the tax, and include the charge in your payment to them.
Reply Shanel White
2:57 PM on October 8, 2012 
Zach says...
Feel that I should mention that not paying property taxes on a leased vehicle is a half truth.

The leasing company will pay the tax, and include the charge in your payment to them.

Hi Zach,

Thanks for your comment, it's greatly appreciated. The leasing company will pay the property tax on the vehicle, even it's ballooned in the payment.
Reply Shanel White
12:10 PM on January 21, 2013 
Hi,

If you are seeking assistance in vehicle title services, please send me a service request, stating the type of title you are seeking as well as a brief description of your situation.
Reply Shanel White
12:56 PM on February 5, 2013 
I'm glad that you found my post informative. Please feel free to visit again!
Reply David
10:26 PM on February 28, 2013 
The lessee is DEFINITELY responsible for the personal property tax on the leased vehicle. The personal property tax is separate and not included in the lease payments. The lessor/owner does not have anything to do with the personal property tax.
Reply Shanel White
11:12 PM on February 28, 2013 
David says...
The lessee is DEFINITELY responsible for the personal property tax on the leased vehicle. The personal property tax is separate and not included in the lease payments. The lessor/owner does not have anything to do with the personal property tax.

David,

The lessee is responsible for the PROPERTY TAX for a leased vehicle only if they buy out the vehicle from the lease. When leasing a vehicle you don't pay the personal property taxes because you don't own it. However, you might want to check with your leasing company because there are cases in which they will factor in certain payments into your contract. If you paid personal property taxes, then perhaps maybe it was stated in your lease. Thus, if your leasing company states that you will be responsible for paying the personal property taxes, then you will be expected to pay them. Please note, that this situation strictly rests upon the leasing company.
Reply Shanel White
3:58 PM on March 12, 2013 
I appreciate your encouragement and feedback. I hope that you enjoyed every bit of my posts. Come back for more insights!
Reply mkurapati
8:07 PM on April 1, 2013 
If I swap a lease from a lessee, with a year left in Lease, do I need to pay sales tax in VA, on entire car value or just the lease amount.
So if I transfer lease of a car for 350 per month for 11 months, should I pay tax on 35k (original car value) or just on 350*11=3850$? This is for Virginia state. Please suggest.
Reply Ed Carrasco
2:20 AM on May 2, 2013 
Hi Shanel, thanks for the information! I have a few questions. On May 2012, I leased a car here in VA but what the dealer did was to swap the License Plate and TAG from my previous (traded in) lease. Now, I am afraid that I will have to get a new title for the new car when I go to renew the tag. I checked my car registration and the title slot for the new car is in blank. Does this mean that I will have to obtain a new title for the new car? Also, Will I be required to pay sales tax before getting the new title?

I was checking my paperwork and in the amount for the sales tax shows an N/A. Are dealers in VA allow to lease a car without paying the sales tax at the moment of the lease?

Thanks in advance for your help.
Reply Shanel White
3:17 PM on May 2, 2013 
Ed Carrasco says...
Hi Shanel, thanks for the information! I have a few questions. On May 2012, I leased a car here in VA but what the dealer did was to swap the License Plate and TAG from my previous (traded in) lease. Now, I am afraid that I will have to get a new title for the new car when I go to renew the tag. I checked my car registration and the title slot for the new car is in blank. Does this mean that I will have to obtain a new title for the new car? Also, Will I be required to pay sales tax before getting the new title?

I was checking my paperwork and in the amount for the sales tax shows an N/A. Are dealers in VA allow to lease a car without paying the sales tax at the moment of the lease?

Thanks in advance for your help.

Hi Ed,

Please check your email regarding my response to this situation.
Reply justme73
3:29 PM on May 8, 2013 
Ed Carrasco says...
Hi Shanel, thanks for the information! I have a few questions. On May 2012, I leased a car here in VA but what the dealer did was to swap the License Plate and TAG from my previous (traded in) lease. Now, I am afraid that I will have to get a new title for the new car when I go to renew the tag. I checked my car registration and the title slot for the new car is in blank. Does this mean that I will have to obtain a new title for the new car? Also, Will I be required to pay sales tax before getting the new title?

I was checking my paperwork and in the amount for the sales tax shows an N/A. Are dealers in VA allow to lease a car without paying the sales tax at the moment of the lease?

Thanks in advance for your help.

When I leased my vehicle I wanted personalized plates. So, I went to DMV and got a replacement registration (paid the $6 fee or whatever it was) and the new registration had the title number on it. From there, I was able to do everything online.
Reply justme73
3:31 PM on May 8, 2013 
David says...
The lessee is DEFINITELY responsible for the personal property tax on the leased vehicle. The personal property tax is separate and not included in the lease payments. The lessor/owner does not have anything to do with the personal property tax.

I have been sent a property tax bill from my leasing company. I've had to pay it every year, to the leasing company, not the state.
Reply justme73
3:38 PM on May 8, 2013 
Shanel White says...
Hi,

If you are seeking assistance in vehicle title services, please send me a service request, stating the type of title you are seeking as well as a brief description of your situation.


I'm fighting this right now. I bought out my lease and when I went to DMV to change the title over, they charged me sales tax on the amount of the buyout. I'm not quite sure why. If you trade in a vehicle at the time you lease or buy a new car, you are given sales tax credit for the value of the trade-in in many states. But, DMV is not doing that, they are charging me sales tax for another 55% of the total cost of the vehicle. Basically what I'm saying is that I already paid sales tax on $47,000 and now I'm being forced to pay sales tax on another $28,000. I didn't pay $75,000 for the car so why am I being charged sales tax for that amount?
Reply Shanel
8:20 AM on May 9, 2013 
This is an unfortunate but true situation. Unless you show proof that you paid the sales tax on the lease upfront, you will be charged for the sales tax again, in the event you do a buy out.
Reply Shanel
8:25 AM on May 9, 2013 
Some leasing companies are different and if they sent you a property tax bill, it's most likely that they have paid the personal property tax on your behalf. If that's the case, you should ask for proof of this.
Reply Jennifer Branch
11:03 AM on October 3, 2013 
Hi! I leased a car in Pennsylvania in January of this year and I have moved to Virginia. My pennsylvania sales tax is rolled into my lease payments. Will I have to pay sales tax up front upon registering and transferring the title to virginia?

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