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For Sale: 911 GT3 for sale 2005 Model
03-09-2007, 11:16 AM
#5
Nordschleife Master
If you require the purchase to be through your dealership so that you might get the tax break I would highly rec'd having your dealer CPO the car for the new owner to add the additional 2 years of warranty. That would be a HUGE selling point. Best of luck with the sale. 
03-11-2007, 02:32 PM
#7
Nordschleife Master
Dave, see my post above yours. The seller can get a serious tax break since he essentially "trades-in" the car and the dealer agrees to sell it to the new guy at that price without markup. In turn two things can come of this. The dealer, if a good one that the seller has a nice relationship with will CPO it for the new buyer (2 exra years of warranty) and the seller gets about 6K in tax credit. The beauty of this as well is the seller can lower his price substantially and do very well since he is essentially already starting with ~6K in his pocket at private party sale.
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03-11-2007, 03:02 PM
#8
Dell ... thanks. I can understand the advantage of having the CPO. What I don't follow is how is the $6K tax advantage (in your example) created? And which party benefits from the tax advantage?. Sorry for my ignorance.
03-11-2007, 04:03 PM
#9
Rennlist Member
the seller does.
the purchaser has no advantage, or even a disadvantage if the state has higher taxes on dealership sales than personal sales like here in BC.
the purchaser has no advantage, or even a disadvantage if the state has higher taxes on dealership sales than personal sales like here in BC.
03-11-2007, 04:08 PM
#10
Rennlist Member
Dave,
The 6k comes about because the sales tax on a vehicle is the price of the new vehicle minus the trade in allowance. So around 84k of this transaction will not be taxed, hence a few thousand will be saved by the seller. This tax savings is allowed in some states.
The 6k comes about because the sales tax on a vehicle is the price of the new vehicle minus the trade in allowance. So around 84k of this transaction will not be taxed, hence a few thousand will be saved by the seller. This tax savings is allowed in some states.
03-17-2007, 10:03 AM
#15
Rennlist Member
When purchasing a new car (from a dealer), the sales tax on the new vehicle in some states is calculated based on the difference between the price of the new vehicle minus the value of the trade in.
So, if the new car is 100k, and the trade in allowance is 84k, then the taxable amount is 100k-84k = 16k. So instead of paying sales tax on 100k, the buyer of the new car only pays sales tax on the difference 16k, which at 6% is $960 vs. 0.06x$100k = $6000. So you can see the seller of the GT3 can save 5k on the new purchase, some of which he could deduct from the price of the car he is selling to make the car more attractive to potential buyers without actually loosing any money while doing so.
I hope it is clear that the seller of a car pays no sales tax on the car being sold. Further I hope this clarifies the strategy LVDell suggested for being able to sell the car at a lower price due to tax savings without loosing any money.
My apologies to Ran for hijacking the thread. I hope he can see this little detour as a few free bumps.
So, if the new car is 100k, and the trade in allowance is 84k, then the taxable amount is 100k-84k = 16k. So instead of paying sales tax on 100k, the buyer of the new car only pays sales tax on the difference 16k, which at 6% is $960 vs. 0.06x$100k = $6000. So you can see the seller of the GT3 can save 5k on the new purchase, some of which he could deduct from the price of the car he is selling to make the car more attractive to potential buyers without actually loosing any money while doing so.
I hope it is clear that the seller of a car pays no sales tax on the car being sold. Further I hope this clarifies the strategy LVDell suggested for being able to sell the car at a lower price due to tax savings without loosing any money.
My apologies to Ran for hijacking the thread. I hope he can see this little detour as a few free bumps.