taxes and trade in value

I'd guess that no tax would be due and the dealer would give you a check for the balance between the trade and the new car. But, I bet the dealer lowballs you on the trade. They're not accustomed to scratching checks to an owner for trades.

 

No tax is due, as long as you will register and title the car in a state where the trade-in credit exists.

No, you don't get paid by the state for the difference in tax.

 

Yes, that changes things dramatically.

You will have to actually PAY the ENTIRE tax on the car that you are trading in, if you are turning in the leased car before end of term. In other words, get ready to write a big check.

You should then get a tax credit on the new car that you are buying, but I can't say that for sure, because that varies from state to state.

 

I can't answer that question, since I am not part of the deal. You will have to find out the particulars from your dealer.

 

It is all by state....

 

More than likely, you will receive no tax benefit from the lease trade in.... As you are not really trading it in and the leasing company really owns it.

Why bother assigning your lease residual buyout to the dealer for no compensation?

Some states like MI give you no credit for trade ins..

 

oh, my bad. buy out amount from leasing co....

i was thinking the lease end residual amount. at which point you just walk...

 

How could that be? U don't own it. The leasing company does. That is a sweet loophole

 

I would double and triple check that with the person at the dealership.

To buy out a lease there are 2 ways due to the fact that you do not own it.
-One is to make the remainder of payments and give it back.
-The second is to buy it out which would include the price of the vehicle PLUS taxes.

Doing that later would mean that you now own the vehicle.

Unless this dealership is being sneaky with the paperwork you cannot trade in a vehicle and receive tax benefits on a vehicle that you do not own/bought out from the leasing company. They could just be moving the numbers around to make you THINK you are getting a better deal then you are.

 

Because the dealer is making the buyout they do not have to pay taxes. So the ownership would go from the leasing company to them. Then, from what it sounds like you will be paying the full amount of tax on the new vehicle that you purchase from the dealer.

 

sounds like someone messed up..... id consider yourself lucky

 

I believe you because you said so, but it makes no sense. If the dealership owned the car, they could give you "trade in" credit for the amount of value above the buyout if they are being generous. But I can't see why they would give you trade in credit on the entire value of "their" car.

Good for you if they messed up (on the sales tax, not the car inspection)!!

Maybe others in NY can share experiences similar/different on sales tax since it is state by state? Here is what NY says:

Quote taken from here for those interested:

Taxable Receipt - How Discounts, Trade-Ins, and Additional Charges Affect Sales Tax

BTW, this is pretty much how Florida handles sales tax.


Regards,
Jerry