Trade in Value

[noncom23]

Wholesalers are backing off on gas guzzlers also. With the increase in gas prices, demand is down.

[X5FX]

Originally Posted by broknlgs24

if he's selling it, where does sales tax come into play? the buyer is responsible
for that, aren't they?

When you trade-in a vehicle at a dealer you only pay sales tax on the difference as opposed to sales price on the full purchase price...for example:

$70,000 new vehicle
$30,000 trade-in
-----------
$40,000 (actual sale amount)
$3,600 9% sales tax
-----------
$43,600 total cash price of vehicle

-VS-

$70,000 new vehicle
$6,300 9% sales tax
-----------
$76,300 total cash price of vehicle



TAX SAVINGS= $2700 (if you traded in)
So when factoring the cost difference of selling it your self vs trading-in the used vehicle add roughly $2700 to the dealers offer to get a fair comparison.

Option 2- When you buy your new X...as a final negioation tell your dealler he has a deal if they will give you a "Courtesy Trade".
This means when you sell your older vehicle, the dealer will handle the transaction (on-paper only) and show your sale as a trade-in so you retain this tax saving even though you didnt actually trade-in.

[broknlgs24]

interesting bit of info. X5FX. i've never thought of that. i've never heard of
ur Option 2 either. that would be real cool if they could do that.

[X5FX]

Originally Posted by broknlgs24

interesting bit of info. X5FX. i've never thought of that. i've never heard of
ur Option 2 either. that would be real cool if they could do that.

I have used option 2 several times, it is very common.

[X5 Guy]

KBB on my car was $25,000 and the dealer first turned me down since they had so many already.
Then made some calls and offered me $17,800.
Carmax took 2 hours and told me $18,500.
I sold it on craigs list for $22,500 in a week.

[PersonaNonGrata]

KBB is notoriously optimistic for trades. My dealer goes by what is happening at auction. You can expect to get hosed. What's ever more F'd up is that there is no taking into account the options of condition of your car. For example, I went in to me dealer on Monday and asked them what they'd give me if I traded in my '06 330i that is almost loaded and in pristine condition with only 7600 miles. The average price at auction for ALL '06 330i's was about $32,000 with a high of $33,---. There was no addition for navigation or premium package, etc. The dealer's appraisers would use the auction average as their price and maybe add a little for the options but it was still extremely low. Just FYI the private party price for my 330i would be about $42,000.

The biggest screw job is when they give you bottom dollar for your trade and charge you top dollar for the new car. It's typical of most dealers, as others have already stated.

[X5 Guy]

Ya... So unless your desparate or have to unload it immediatly.... sell it on your own and your sure to make more.

I like to see what the rip off places offer and then ask for something in between that and KBB. You will normally get some bites. I actually had some people offer me Carmax price as if I was desparate.

When I sold... I was just happy to get more than the dealer offer.

[X5 Guy]

Originally Posted by X5FX

When you trade-in a vehicle at a dealer you only pay sales tax on the difference as opposed to sales price on the full purchase price...for example:

Not sure this is true. What state do you live in?

The dealer is going to apply your trade-in as a "down payment" and the taxes will be calculated from the full retail amount of the vehicle.

The state is going to lose money and would NEVER permit that to happen. Many people used to sell a car for $1.00 but it was actually worth $30,000 thus keeping the tax payment low for the buyer.

Now most states if not all... calculate the tax on the sale price or the true value of the car, which ever is greater.

[Maximman]

Thanks for all the great info. I'm in no rush to unload it so if i end up doing anything i will sell it myself. I live in mass where they will take the amount of trade and minus it from the sale price so you only pay the difference in sales tax

[X5FX]

Originally Posted by X5 Guy

Not sure this is true. What state do you live in?

The dealer is going to apply your trade-in as a "down payment" and the taxes will be calculated from the full retail amount of the vehicle.

The state is going to lose money and would NEVER permit that to happen. Many people used to sell a car for $1.00 but it was actually worth $30,000 thus keeping the tax payment low for the buyer.

Now most states if not all... calculate the tax on the sale price or the true value of the car, which ever is greater.

Not in Louisiana, I also doubt most states do this...its called double taxation. You have already paid sales tax on the first vehicle.

EDIT:
Actually looks like MOST states DO ALLOW this to happen, as I originally stated:
http://www.michigan.gov/documents/485_72279_7.pdf
http://www.safecarguide.com/gui/old/disposing.htm
http://www.window.state.tx.us/taxinf.../tx96_116.html

the list goes on...just try google.

looks like Virginia is one of the few states that does not do this, but its likely because you only pay 3% tax whereas most states charge 7-9%