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      05-08-2008, 01:57 PM   #13
jeremyc74
Banned
United_States
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Drives: '08 135i Montego/Terra
Join Date: Feb 2008
Location: Evansville, IN


Posts: 5,972
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Quote:
Originally Posted by ucb View Post
How are you getting these savings? Sales tax? Income tax?

It comes off the sales tax. When you trade a vehicle in, the trade in has already been taxed once. The amount the dealer is giving you for the trade in gets taken off before the sale tax is calculated, so you don't pay sales tax on that amount.

That might vary from state to state, but I think most are like this.

What it comes down to is that if your state charge around 6%, and the dealer is willing to give you $17k for a car, you need to sell it private party for at least $18k to even break even.