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So I am thinking of getting a newer set of wheels and possibly trading in my older vehicle. If the sale price is established at $20,000 for the newer car and my trade in car is worth $5000.... Does the deal go down like scenario #1 or #2?
So I am thinking of getting a newer set of wheels and possibly trading in my older vehicle. If the sale price is established at $20,000 for the newer car and my trade in car is worth $5000.... Does the deal go down like scenario #1 or #2?
Is this negotiated both ways? Or does the dealer try to go #2 to "clear" more money? Any feedback back on your experiences would be helpful.
I guess it would vary by state. Where I live, provided the seller is a licensed dealer, the trade-in allowance is deducted before calculating the tax. If you're looking to negotiate the total cost as in "I want to pay X out the door including tax title and license" then you'll need to figure out how the sale will be taxed in your jurisdiction before walking in the door.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by Drover
I guess it would vary by state. Where I live, provided the seller is a licensed dealer, the trade-in allowance is deducted before calculating the tax. If you're looking to negotiate the total cost as in "I want to pay X out the door including tax title and license" then you'll need to figure out how the sale will be taxed in your jurisdiction before walking in the door.
That's surprising. Here ans other states I have lived in, the trade is considered down payment, the tax is based on the price, in this case $20,000. Add any additional fees and subtract the trade (#2).
In MN, the new car buyer pays tax on the difference. Since used car purchases are also taxed, the state theoretically makes up the rest when the trade-in is resold.
Dealers here like this because it gives people a lot of incentive to trade their old car instead of keeping it and selling it themselves.
That's surprising. Here ans other states I have lived in, the trade is considered down payment, the tax is based on the price, in this case $20,000. Add any additional fees and subtract the trade (#2).
How nice of those states to double-dip, taxing the full value of the purchased car and then doing the same thing with the trade-in when it's sold too.
How nice of those states to double-dip, taxing the full value of the purchased car and then doing the same thing with the trade-in when it's sold too.
That's been floated a few time in the past here to close budget gaps. The auto dealer's lobby usually puts a quick stop to that and it's dropped... Until the next biennium, of course.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I'm not in favor of more taxes, but it is a sales tax here. That means a percentage (about 10% now) of the sale price. The buyer pays it on the price of the new car, and the buyer pays it on the price of the used car.
Whether you have a trade or not doesn't matter.
Specifically, in California has someone dealt with this? The edmunds chart says they will hit me for tax on the $20,000. Just wondering. I have walked away from many deals when I felt like they were adding junk fees to the final price of the vehicle.
Many dealers will offer you a big dollar trade in to get you to come in and sign the papers and then and only then after you have decided you really want the car that the TRADE IN PRICE is being deducted from the regular list price of the car. A scam
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