[GioM2Comp]

If I want to buy a car for say 50k and the trade in is 30k, do I only pay sales taxes on the 20k difference?

Also if I sell private for say 30k, and then buy a car for 50k, will I have to pay sales tax on the the 50k?

If this is accurate, it looks like that it's best to trade in the car for 30k instead of selling private unless I can get at least 33+ on a private sale to offset the sales tax difference?

I live in NJ by the way. Thanks

[STOOF]

I believe the answer is yes to all 3 questions.

[vasi_M3]

You're statements are correct. When you trade in you pay tax only on the difference between the MSRP and trade in value of your car.

[Frozen]

Yes you are correct that is how it works in most states, but I've heard it's different in California. Anyone know if it's different in Cali?

[MalibuBimmer]

Originally Posted by e90m305

Yes you are correct that is how it works in most states, but I've heard it's different in California. Anyone know if it's different in Cali?

It's different in California.

[BMWM5NYC]

Taxes are paid on sales price.in NY If it is 50 k and you are BUYING it not leasing it, sales tax is on the price of the item. Down payment makes no difference. Car costs 50000. Does not matter where money comes from to pay cash or cash trade combo. State still wants cut from 50000.

[BEM-S4]

Check w dealer I've spoken to some in the past that told me if you sell car, not to them but to Carmsx or whatever, they can take that paperwork and net against purchase so taxes work the same as if you traded in and bought all at one place. This was a while ago and nothing I ever fully investigated but you should check into it if it's a scenario you are considering. Not sure on sale to private party.

[FriskyDingo]

In many states, you can use the bill of sale from selling your car outright for a tax credit against sales tax on your new vehicle.

[WHL102]

Originally Posted by bmwm3nyc

Taxes are paid on sales price.in NY If it is 50 k and you are BUYING it not leasing it, sales tax is on the price of the item. Down payment makes no difference. Car costs 50000. Does not matter where money comes from to pay cash or cash trade combo. State still wants cut from 50000.

Are you sure? For calculating taxes, a down payment is not the same as a trade-in in most states.

The following states do NOT offer a tax credit on trade ins: California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia.

And the issue is moot in Oregon, which has a 0% sales tax.

[Beartato]

Hooray for living in a state with a tax credit for trade ins, saved me $1500 on taxes.

[FriskyDingo]

There IS a distinction between money down and trade-in. Example-

1)You buy a $50,000 car. You trade a car with a 20K value. You pay taxes on 30K.

2)You buy a 50K car with 20K down. You still pay taxes on the full 50K.


Reason being, is with the trade in, you already paid taxes on that vehicle. If they didn't give you credit for it, you'd essentially be paying taxes twice. It's a sham.

[M3Bimmer77]

Here's how it goes.

If you buy a $20k car and your trade in is $10k, then you pay taxes on $10. Dealer is basically selling $10k not $20k. Dealer will charge taxes When selling your trade in.

Another story is if you sell yr car to a private party and then go and buy a $20k car. Dealer is selling $20k. So taxes will be on $20k

[hgtran21]

im not sure if thats correct or maybe im wrong. Im from cali and if we buy a car at 10k our trade in is 5k were still paying taxes on the 10k amount.

[kent11202]

Originally Posted by hgtran21

im not sure if thats correct or maybe im wrong. Im from cali and if we buy a car at 10k our trade in is 5k were still paying taxes on the 10k amount.

That's because we are in the People's Republic of California and have a LOT of people to support whether they are here legally or not - that's the way the Mercedes Benz out here.....

[hgtran21]

stupid california lol

[kent11202]

Originally Posted by hgtran21

stupid california lol

But at least the weather is usually nice.

[eluded]

Depends on the state. In the People's Republic of California you pay sales tax on the new purchase, pay sales tax on the used car, and there's no discounts. Oh, it's not a sales tax, it's a use fee.

yet in another country, like say, Arizona. If you trade your car in for 30,000 at the dealer for a $50,000 car you only pay sales tax on 20 grand

[eluded]

are you in utah? I rather pay 10 times the taxes and fees than live in that state.

Originally Posted by Beartato

Hooray for living in a state with a tax credit for trade ins, saved me $1500 on taxes.

[drewnel22]

Originally Posted by kent11202

That's because we are in the People's Republic of California and have a LOT of people to support whether they are here legally or not - that's the way the Mercedes Benz out here.....

Its the same way in Virginia...sucks

[kent11202]

Originally Posted by eluded

are you in utah? I rather pay 10 times the taxes and fees than live in that state.

What are the fees/taxes in Bulgaria? I had a friend from Sofia and we never got around to that subject.

[eluded]

Originally Posted by kent11202

What are the fees/taxes in Bulgaria? I had a friend from Sofia and we never got around to that subject.

I'd rather not talk about those fees. Licensing a car in Europe, the EU, & even in Bulgaria it's extremely expensive compared to the states.

[Beartato]

Originally Posted by eluded

are you in utah? I rather pay 10 times the taxes and fees than live in that state.

Someone's mad jelly.