Sales Tax on a New vehicle

[Bear Charge]

Do you pay sells tax on a vehicle if you take a loan?

[CabezaBlanca]

6.25%

[6.5 shooter]

Yes.

[ColinR]

Yep, sales price minus trade in value is the amount you are taxed on. So when someone says I’ll give you the same amount the dealer is offering in trade is not as good of a deal. If your new vehicle is 70k and your trade is worth 50k, if you trade it in your only going to pay tax on 20k. I’d you sell your vehicle outright for 50k and use that as a down payment you will be taxed on the full sale price of the new vehicle at 70k.

70,000 x 6.25% = $4,375
20,000 x 6.25% = $1,250
—————
Difference of $3,125

So you would need to get at least $3,125 more selling outright than trading in in this scenario.

[Bear Charge]

Yep, sales price minus trade in value is the amount you are taxed on.

Thanks

[Texas276]

Also be careful when trading in a car. I was told that they would give me Xx value for my trade.They they were inflating the number they wrote down for trade value to include the tax savings I would realize by trading in. I have never had that happen before. These guys were shady af on other stuff if you can imagine. I walked out eventually.