Sales tax on trade in

[NJBob]

My truck is currently on a train preparing for the dealer ordeal. I plan on trading in my current ride. Is the value of the trade in deducted from the cost of the vehicle? Thus lowering the sales tax. I live in NJ but the dealer is in NY. Also I know about the doc fees but how about any dealer prep fees? Is that something the dealer can inflate?

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[JayDee]

My truck is currently on a train preparing for the dealer ordeal. I plan on trading in my current ride. Is the value of the trade in deducted from the cost of the vehicle? Thus lowering the sales tax. I live in NJ but the dealer is in NY.

Yes, the value of your traded vehicle is not subject to state sales tax. The state will tax your traded in vehicle when the dealer sells it.

 

[commadorebob]

Depends on the state. Mine allows you to deduct a trade, but not incentives.

 

[CSmith]

Same in Indiana. Only the value of the trade is deducted from the sale price for tax purposes. Rebates aren't.

 

[JesTr]

Sales and use tax laws vary from state to state. Gotta do the homework for your specific state, so probably maybe.

 

[DannyP]

My dealer did not charge any Doc fees or prep fees. I got my truck at 12/22 MSRP & 12/22 interest rate.

 

[Clive]

Not applicable for this case, but for anyone curious, California will charge you sales tax on the full value of the vehicle before any rebates, and they do not reduce it for trade-in values.

 

[NJBob]

Sales and use tax laws vary from state to state. Gotta do the homework for your specific state, so probably maybe.

Yeah I found a document from NJ. Even tho I buy in NY NJ gets the tax. Fees doc fees renates incentive all are taxed. Only the value of the trade is exempt.

 

[GTBuzz]

Another consideration is when you buy out of state, you may have to pay the taxes in full when registering in your own state. So it might not be part of your loan.

We bought a Mustang in SC, paid everything except for sales tax. When I registered the car in Georgia, I paid entire tax at the counter.

But yes they deducted the tradin value from the Mustang price before calculating taxes.

 

[jsus]

Another consideration is when you buy out of state, you may have to pay the taxes in full when registering in your own state. So it might not be part of your loan.

We bought a Mustang in SC, paid everything except for sales tax. When I registered the car in Georgia, I paid entire tax at the counter with a check.

But yes they deducted the tradin value from the Mustang price before calculating taxes.

Depends on the dealer and the state. Often, dealers near the state line or who otherwise sell to out-of-state customers are able to process titles and sales tax directly with the neighboring state. Not always.

 

[atomguy245]

You can ask your dealer to email you an itemized explanation of the numbers, including the final total. No reason they can't do that right now

 

[GTBuzz]

Depends on the dealer and the state. Often, dealers near the state line or who otherwise sell to out-of-state customers are able to process titles and sales tax directly with the neighboring state. Not always.

Yea I planned to pay it myself from beginning, so didn't ask about it and they never offered it. I wanted to pass that along as something to look out for.

 

[NJBob]

Another consideration is when you buy out of state, you may have to pay the taxes in full when registering in your own state. So it might not be part of your loan.

We bought a Mustang in SC, paid everything except for sales tax. When I registered the car in Georgia, I paid entire tax at the counter.

But yes they deducted the tradin value from the Mustang price before calculating taxes.

I have bought cars in both NY and PA I live in NJ The dealer gets you your plates and pay the SalesTax. These dealers are very close to the border so should not be an issue. I hope.

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