Question on trade-in VS selling to Carmax.

I remember someone mentioning that if I’m offered the same amount of money on a trade-in vs just selling to Carmax, it would be cheaper to do the trade because I’d pay sales tax for selling the truck. I’ve never sold to Carmax nor traded any vehicle. Got offered 31k at Carmax and 31k on a trade-in.

Would I be taxed if sold at Carmax?

 

Idk your market, but that’s a looooow ball offer for around here. Tacomas are going for blood money around here.

 

I don’t necessarily disagree, but she’s got a few dents from off-roading. Even worse, someone poured sugar down my gas tank. Got it fixed but started developing a knock. Figured I’d cut my losses and move on whil I still can.

 

Not sure about CA, but in my state you only pay sales tax on the difference between new vehicle and your trade in value. If Carmax and trade in were equal, I'd choose trade in for the tax savings.

 

Ahhhhhhhh, that’s what they meant. New vehicle purchase would have to be a custom order. I don’t think it would apply in my case?

 

That should'nt matter; you trade it in the day the new one comes in, everything should be the same.

 

Yep, if you trade it in, you're only paying sales tax on the difference between trade in value and new truck. If you sell it outright, you're paying sales tax on the total new truck - basically $20k vs $50k and CA sales tax has got to be a killer. Probably save yourself $4k in sales tax.

 

There is no tax benefit in CA regarding the trade in. Also you don’t pay tax when you sell but you pay full tax upon purchase regardless of trading in or not. So for your scenario it really comes down to who offers more money or convenience.

 

Post some photos of the truck in question