Is this a good price? Need some Quick Answers!

"Is this a state by state case, as far as the taxes and how they're applied"


Taxes 101, the final tax you pay is on the negotiated price (before down payment or trade in), your down payment/tradein have nothing to do with the taxes paid....taxes collected are on the PRICE you negotiated prior to any funds applied for the down payment...


Think of it this way, say you pay cash for the whole darn truck, you still pay taxes on the full price you negotiated prior to payment...it does not change because of tradein or down payment prior to financing, you got to pay the whole wack...


Your down payment/tradein will determine you final amount to be financed, but you will be paying taxes on the full price before any type of down payment...


Just sayin'

 

That's not the way it works in the states where you do not pay sales tax on the amount credited from your trade-in. (So the car costs $20k, you get $7k for your trade in, therefore you pay salestax on $13k.) In those states you need to consider the sales tax impact of a trade-in offer, which can tip the scales towards trading in sometimes.

 

(BEFORE TRADE IN)

 

Which states? I would be curious....all states I have lived in you pay taxes on the full price before down payment or tradein...


States would be losing chunks of sales tax $$$ if this is true....a tradein is essentially a cash down payment/credit, and I know you do not get taxes waived for paying cash....


Please enumerate on the states that do this, in the meantime, I will do some research on the interwebs to enlighten myself..


Edit, I stand corrected...copy and paste to follow:


States Without Credit

Six of the 50 states do not have a trade-in sales tax credit policy. Those states are California, Hawaii, Maryland, Kentucky, Michigan and Virginia. The District of Colombia does not have a net sales tax policy, either. In these states there is no sales tax savings with a trade-in, and you pay the full tax amount on the cost of a new vehicle. Sales tax is not an issue in New Hampshire, Montana and Oregon, since these states do not have a sales tax.


I have only lived in California and Virginia, so my answer was based on my personal experience..


I have been enlightened...meculpa...50 lashes with a wet noodle...

 

In Texas they subtract the value of the trade in before you pay taxes.

 

Looks like we all got a little tax lesson on states today! But yes, I even checked my paperwork/quote the dealer gave me and the tax was strictly on financed amount. As stated, this can definitely be a kicker for trading in.

Either way, I found out tonight that the truck sold after all so no more contemplating for me. That's what I get for dragging my feet, but maybe also a good thing.
Thanks again all!

 

Reading comprehension fail.