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I don't see what the problem is.
He's buying used.
If he buys at a fair market value, and then 4 months later sells at a fair market value, the loss should be minimal.
It's a hobby, and hobbies are expensive. This is no different. More power to him.
I love cars. So much so that I like to have the experience of driving everything. When I like something, I buy it.
On average, I own a car maybe 4 months. The XLR is the exception; it's discontinued. I've owned my current car (CTS-V) for two months. Mulling over trading it in for a V Coupe or CL63.
My SO thinks there's something wrong with me. I call my behavior completely normal. Who's right?
you are what is known as an autoholic. kind of like an alcoholic except you dont have to attend any damned old meetings, and you dont have to worry about driving under the influence(unless you also drink or do drugs).
Not sure how hyour state works, but in mine they charge you sales tax on the cars, so 8.65% on each purchase price upon registration........ puts your 60K purchase at $5200 of expense every 3 months. so about 20K per year never mind depreciation.
Hey if you can do it and it only cost you a few K, great, I wish I could do that
The sales tax in most states is on the net purchase price, so assuming the OP is trading at a dealership rather than selling private party the sales tax hit wouldn't be that extreme.
The sales tax in most states is on the net purchase price, so assuming the OP is trading at a dealership rather than selling private party the sales tax hit wouldn't be that extreme.
Don't you pay sales tax when purchasing a car? Even if you purchase a used car from a private party, in my state you have to pay tax on it when you go to register. So assuming OP purchases $30k car, say 4x a year with sales tax 5-8%, that's $6-10k for just taxes.
And then there's the loss when trading into a dealer.
Perhaps what you're doing is a bit extravagant, but maybe it needn't be. My dad used to do that, but he made money at it. He had a dealer's license, so he didn't have to pay sales tax, and he seldom sold a car at a loss. Sometimes he did, especially if he kept the car too long, but it was a money making hobby for him. It also allowed him to go to dealer auctions. Sometimes he'd have an order from someone and go to the auction to buy the car expressly for them. Or sometimes he'd take them to the auction with him as his "driver," and they'd just pay him for his time.
My ex FIL always traded at least annually, but he always traded with the same dealership, they knew him well and how well he cared for his cars, and they gave him a heck of a deal each year. (I know that wouldn't work with you.)
For years I traded my personal cars every two years, which meant a car for me one year and a car for my wife the next, and since we normally had four cars, there were other trades going on as well. (I always had the road car plus an SUV or pickup; my wife had some kind of summer sports car plus a 4x4 for winter.) I never considered it abnormal at all. Then I got a car that I really liked and kept it for 10-12 years. I've had my current truck for 12 years now. I like it just as it is, and trading "up" wouldn't really get me anything much different. 2012 F250s aren't much different than 2000 F250s.
My son's wife just surprised him last night with a "new" 2011 Corvette. Lucky guy!
Yes. My point was that when you trade at a dealership you only pay sales tax on the difference so the sales tax expense isn't as extreme as the previous poster suggested.
In other words, using Chrisk327's illustration of buying a $60K car and a sales tax of 8.65%, the tax would be $5200 only if the car was purchased outright. If the OP got, say, a $50K allowance trading in his previous car - which is entirely possible since he trades very frequently - the sales tax would only be charged on the $10K difference, so it would be $865.
Not saying that it shouldn't be considered, just that it's pretty negligible compared to the overall cost of trading so frequently. And as I said, it doesn't apply if you sell your car outright.
Yes. My point was that when you trade at a dealership you only pay sales tax on the difference so the sales tax expense isn't as extreme as the previous poster suggested.
In other words, using Chrisk327's illustration of buying a $60K car and a sales tax of 8.65%, the tax would be $5200 only if the car was purchased outright. If the OP got, say, a $50K allowance trading in his previous car - which is entirely possible since he trades very frequently - the sales tax would only be charged on the $10K difference, so it would be $865.
Not saying that it shouldn't be considered, just that it's pretty negligible compared to the overall cost of trading so frequently. And as I said, it doesn't apply if you sell your car outright.
Ah ok. I'm in CA ... we don't have that consideration.
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