[Rossgazz]

Can someone answer a sales tax question for me ? I'm ready to place an order for a 2022 330i with an anticipated arrival date of Dec. Dealer wants to take in my 2020 330i trade in now which is fine with me as it's a second car. However they are telling us if they do this we won't be able to take the trade in value of our 2020 off of the 2022 for sales tax purposes, so we'll have to pay sales tax on the full amount of the 2022. Does this sound right ?

[jlapicki]

Originally Posted by Rossgazz

Can someone answer a sales tax question for me ? I'm ready to place an order for a 2022 330i with an anticipated arrival date of Dec. Dealer wants to take in my 2020 330i trade in now which is fine with me as it's a second car. However they are telling us if they do this we won't be able to take the trade in value of our 2020 off of the 2022 for sales tax purposes, so we'll have to pay sales tax on the full amount of the 2022. Does this sound right ?

State law applies...that is not the case in Maryland....you only pay tax on the difference...

[jg4c]

That sounds wrong. Regardless of whether you decide to trade your old car in now, or at the time you take possession of the new car, you should save the sales tax on the money they give you for the trade in. Then you pay sales tax only on the difference between
the trade in value, and your new car.

Maybe they are talking about something else. Do they mean that your trade in will be assessed at a different market value,
from what they offer you know, versus what your trade in could be worth when you actually trade it in? That's normal.

That could obviously change the amount of sales tax you wind up saving.

[springerdrive]

Thank you, Rossgazz for your question. The answer might depend on your state, and a google search might render an answer. We're in NC, and traded our 2019 Acura TLX in August for $38,600, and are waiting for our m340i to be built. The dealer couldn't guarantee the trade price at the time the m340i is delivered. But a trade is a trade, and I too hope this takes a bite out of our tax bill

[Rossgazz]

Originally Posted by jg4c

That sounds wrong. Regardless of whether you decide to trade your old car in now, or at the time you take possession of the new car, you should save the sales tax on the money they give you for the trade in. Then you pay sales tax only on the difference between
the trade in value, and your new car.

Maybe they are talking about something else. Do they mean that your trade in will be assessed at a different market value,
from what they offer you know, versus what your trade in could be worth when you actually trade it in? That's normal.

That could obviously change the amount of sales tax you wind up saving.

Ya, my opinion is the same as yours, something is not right there, but I had an extended conversation with the dealer over it and was left feeling that it wasn't correct. They were trying to say that they couldn't "hold over" (their words) my trade in on their books until Dec when the final sales paperwork would be filled out. Probably time to head to a different dealer, and thanks for the response.

[Rossgazz]

Originally Posted by springerdrive

Thank you, Rossgazz for your question. The answer might depend on your state, and a google search might render an answer. We're in NC, and traded our 2019 Acura TLX in August for $38,600, and are waiting for our m340i to be built. The dealer couldn't guarantee the trade price at the time the m340i is delivered. But a trade is a trade, and I too hope this takes a bite out of our tax bill

Tennessee here and sound s like my situation is the same as yours. I couldn't get a clear answer from the TN.Gov webpage, so maybe a phone call to them tomorrow is in order.

[GRB60]

Why do what the dealer suggests? Keep the car until the new one arrives and get the tax savings. It's value shouldn't decrease enough, if at all, to offset the sales tax savings.
If it were me I'd be negotiating all of these points. As you said, the dealer wants the car now so he can sell it at a profit. See if you can get a piece of it.

[jg4c]

Originally Posted by Rossgazz

Ya, my opinion is the same as yours, something is not right there, but I had an extended conversation with the dealer over it and was left feeling that it wasn't correct. They were trying to say that they couldn't "hold over" (their words) my trade in on their books until Dec when the final sales paperwork would be filled out. Probably time to head to a different dealer, and thanks for the response.

The other guys are right, it could be state specific, but I doubt it.

Sounds like the dealer is not explaining something correctly. I'm in NY, and will be trading in my car.

I had the option to take "X" amount for my trade in when I ordered the new car 8/9. That offer lasted 7 days from the time of the offer.

I opted to trade my car in when the new one arrives, hopefully mid November. My trade in will be re-assessed at that time.
It may be worth more, or less, but likely less.

Regardless of the trade in value then, I will save the difference in sales tax. Time for you to talk to other dealers and check your state law.

[jg4c]

Originally Posted by GRB60

Why do what the dealer suggests? Keep the car until the new one arrives and get the tax savings. It's value shouldn't decrease enough, if at all, to offset the sales tax savings.
If it were me I'd be negotiating all of these points. As you said, the dealer wants the car now so he can sell it at a profit. See if you can get a piece of it.

That's true, the dealer wants the car fast so they can flip it,
but trading in when the new car comes in, there is no guarantee the car won't depreciate substantially. It's a crap shoot.

I wasn't willing to be without a car so I have to wait and take what they give me.

I already tried selling my cay privately. What a nightmare dealing with the public!

[springerdrive]

Originally Posted by GRB60

Why do what the dealer suggests? Keep the car until the new one arrives and get the tax savings. It's value shouldn't decrease enough, if at all, to offset the sales tax savings.
If it were me I'd be negotiating all of these points. As you said, the dealer wants the car now so he can sell it at a profit. See if you can get a piece of it.

Our dealer would not guarantee a trade price for the time of sale given that that could be months away and market conditions could change. Since they offered $4,600 more than two other local BMW dealers, and nearly what we originally paid for it, we were happy to give up the trade upfront.

[springerdrive]

Originally Posted by jg4c

I already tried selling my car privately. What a nightmare dealing with the public!

Well, FFS, you live in NYC. What do you expect?! We recently sold both my wife's 19-year-old Saab and my 22-year-old Acura in less than 24 hours from a Craigslist ad.

[jg4c]

Originally Posted by springerdrive

Our dealer would not guarantee a trade price for the time of sale given that that could be months away and market conditions could change. Since they offered $4,600 more than two other local BMW dealers, and nearly what we originally paid for it, we were happy to give up the trade upfront.

Absolutely works to your advantage if you can give up the car early. You only get one shot to get the most out of your trade in.

And, you're gonna save a ton in sales tax. Uses car market is softening.

[jg4c]

Originally Posted by springerdrive

Well, FFS, you live in NYC. What do you expect?! We recently sold both my wife's 19-year-old Saab and my 22-year-old Acura in less than 24 hours from a Craigslist ad.

Precisely, my man.... well said. I grew up here, and you'd think I'd know how insane every is.

[VICG20M]

Every state is different, call and speak to the finance manager. In CA you pay tax on the price of the vehicle then the trade value comes off that. Utah for example gets the trade credit.

[jlapicki]

Maryland also gets the trade credit and my dealer offered a great price for my one year old M340 with 5,000 miles when I ordered my M440 convertible so I jumped on it as we had 3 cars.....pick up the new car next week 12 weeks after the trade....

[springerdrive]

Since we traded the car in August (when we placed the order for the new BMW), we canceled the insurance and registration and turned in the plates. (NC fines you if you cancel your insurance and don't turn in the plates). Will this have any impact on our trade credit?

[Rossgazz]

So as follow up on this, as VICG20M suggested, I called the dealer this morning and spoke directly to the finance manager. The salesman was wrong and the trade would absolutely count as a tax credit. I'd like to attribute it to a new salesman, but he repeatedly told me he'd been in the business for 20 years....... Anyways, hope that answer may help someone else as well.

[VICG20M]

Originally Posted by Rossgazz

So as follow up on this, as VICG20M suggested, I called the dealer this morning and spoke directly to the finance manager. The salesman was wrong and the trade would absolutely count as a tax credit. I'd like to attribute it to a new salesman, but he repeatedly told me he'd been in the business for 20 years....... Anyways, hope that answer may help someone else as well.

👍

[SteveinArizona]

https://www.salestaxhandbook.com/ten...s-tax-vehicles

[jlapicki]

Originally Posted by springerdrive

Since we traded the car in August (when we placed the order for the new BMW), we canceled the insurance and registration and turned in the plates. (NC fines you if you cancel your insurance and don't turn in the plates). Will this have any impact on our trade credit?

No.....they fixed the amount when you gave them your car.....Maryland requires you to turn in plates as well and I had BMWCCA club plates that I had to give up.......did the dealer keep your equity as a deposit on the new car or cut you a check?

btw......my trade sold in 2 weeks for $5,000 more than what I got in trade even though it was near retail value ...

[jg4c]

Originally Posted by springerdrive

Since we traded the car in August (when we placed the order for the new BMW), we canceled the insurance and registration and turned in the plates. (NC fines you if you cancel your insurance and don't turn in the plates). Will this have any impact on our trade credit?

There should be no impact. No reason that I know of, that would keep you from getting the full tax credit on your trade in.

Interesting question, though. I assume the dealer already gave you a check for the full trade in value, when you traded your car in early?

Or, will they just deduct the amount of your trade in when your new car arrives?

Either way, you should get the tax credit. Would be very sneaky for the dealer to tell you, that when the new car arrives,
you have to pay full sales tax on the new car, just because they paid you out early on your trade in.

You should have in your possession a signed contract, that shows the cost of your new car, minus the trade in amount.
It should also show the smaller sales tax amount, which is the difference in the two numbers.

Your final paperwork could be adjusted by incentives, etc. None of that will change the tax credit for your trade in.

[jg4c]

Originally Posted by Rossgazz

So as follow up on this, as VICG20M suggested, I called the dealer this morning and spoke directly to the finance manager. The salesman was wrong and the trade would absolutely count as a tax credit. I'd like to attribute it to a new salesman, but he repeatedly told me he'd been in the business for 20 years....... Anyways, hope that answer may help someone else as well.

How do you like that? A dealership salesperson being wrong.

It's like we all have to work harder at buying these cars, then they have to selling them.