Whether you're looking to apply savings on a down payment for new to you vehicle, or simply trade-in your current vehicle for something new, learn the benefits of tax savings and stretching with us!
Trading in your car can reduce the amount of sales tax you owe in most states. This is because sales tax is usually applied only to the difference between the price of the new vehicle and the value of your trade‑in.
When you buy a car, sales tax is based on the taxable amount. If you trade in your old vehicle at the same dealership and in the same transaction, the trade‑in value is subtracted from the new car's price before tax is calculated.
If a new car costs $40,000 and your trade‑in is worth $15,000, you pay sales tax on $25,000 instead of $40,000. At a 6% tax rate, this saves you $900.
Same transaction: The trade‑in and purchase must be part of one combined deal at the same dealership.
State rules differ: Most states give a tax break for trade‑ins, but some (such as California, Hawaii, Montana, and in certain situations Virginia) charge tax on the full vehicle price even when a trade‑in is involved.
Check out state rules and contact us with more information
Selling your car privately may bring a higher price, but you should compare that with the sales tax savings from trading it in. The trade‑in option is also simpler because we handle it all for you! In many cases, the tax savings can make the trade‑in value close to what you'd get from a private sale-with less effort.
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1402 East Broadway
Cuero, TX 77954