JFScheck

Wow - now that's a nice deal - use your trade in - reduce the price of the car and pay tax on the remaing amount...

Phil G.

In PA, sales tax is 6% - amount you pay is purchase price less trade in. If you sell your car privately and buy a new or pre-owned car from a dealer, some dealers will allow you to transact the deal through their dealership, so you save on the sales tax. I've done that previously with an out of state sale.

1999Porsche911

In Illinois, in addition to only paying tax on the difference between the new car price and the trade in, you are allowed to sell (transfer) any car to a family member, tax free, regardless of the value of the car.

E55AMG

In NY you can use the trade to reduce the tax paid on the new car. Makes it tough to sell privately sometimes as you'll need to find someone to pay enough to make it worth while to you.

Ucube

Same sales tax credit in Texas too.

JohnnyBahamas

trading in a car on a car decreases sales tax by approx. $1000 in tax for every $20,000 in trade in value. Example, when I bought the wife a 335xi as a DD I traded in a C4S which was worth so much as a trade in that I paid no sale tax on the brand new 335xi.

In retrospect, I should have paid the sales tax and kept the C4S because I haven't thought twice about the sales tax but I miss the C4S EVERY DAY!!

Nevada. Open carry state, too.

GSIRM3

In North Carolina, you only pay sales tax on the difference in value between the selling price of the new car and the trade allowance on your current car. If new car selling price is $80,000 and trade value on your car is $50,000, then you pay sales tax on $30,000. If you buy the car without trade, you pay sales tax on the full $80,000.

So, in NC, there is some incentive to trade. The current sales tax on cars in NC is capped at 3%, so in this example you would save $1,500 on the sales tax by trading. In addition to the sales tax, we also have to pay personal property tax on autos, but that is based on the value of the car and is independent on whether you trade or not.

Da Hapa

What's insulting is that they get you on the way out in CA as well because you pay sales tax on the purchase of a used car too (except in a few family transfer type situations).

So you're taxed on the money when you earn it. The govt. gets tax on the car when it is sold as new. And then it gets additional tax when/if the car is sold used.

Gotta love it!

akim47

wow... sounds like i am screwed one way or another.... 9.3% state income tax to boot...

has anyone in CA successfully purchased a car in OR or AZ and brought it into CA? do they catch you when you try and register the vehicle? i think i recall the CA income tax return has a section where you are supposed to report and pay any sales tax you owe if you bought goods out of state (i.e. buying my TV over the internet)... does the same apply? so that means i will pay the sales tax only upon audit.. hmmmmmmmmm....

mal28

In Ohio, you are taxed only on the difference between the new car and the trade in, saved my thousnads

jcnesq

In California, a lease is subject to tax on each lease payment (and up front on any capital reduction payment made), so there is a definite savings with leases.

When I traded my 5 month old 996 for the 997S (in a very weak moment), I got killed on the sales tax loss. And when the dealer resold the 996 a few days later, the state got another almost full sales tax on it.

California sales tax is all based upon decades old law that probably had nothing to do with cars when it was enacted.

Putt-Putt

I think think today it's pbly more based on free healthcare for illegals and global warming. Thanks Govenator.

Da Hapa

Nothing is impossible but between CA's draconian registration process and their very strict smog certification rules, it is very, very difficult to get away with this.

AP997S

When you register a car (no matter what state you bought it in) the CA DMV needs to see a bill of sale. That's what they assess 'Use Tax' on which is the equivalent of sales tax depending on the county you live in. Now, a dealer won't give you a 'fraudulent' or lower value bill of sale but a private party might. It happens everyday on used car registration in CA. I've been told if the bill of sale value is way out of line the CA Franchise Board will come after you for a clarification (ie. car needed lots of repairs) and/or more money.

Be carefull dealing w/ Franschise Board; they can make your life sh*t if your not aware of the consequences.

akim47

good advice....i dont wanna mess with the FTB... i used to do a lot of work with executive comp and stock options where executives would move out of state and excersise their options without reporting their income back to CA... end of the story... they can run but they can't hide... received notices for VERY large assessments and penalties...