Question about sales tax when trading Vipers

[FinalEd357]

I've seen this topic discussed before on this forum and need help please. I've made a few recent posts about looking for a low mile Gen II ACR and it now looks like I've struck a deal. I'm considering the difference of trading my '08 coupe vs buying it outright. I will not be keeping both. The price of the new car is +/- $50k (which is less than I would trading my '08 coupe for). It was explained to me that because the car I'm buying is valued for less than the one I'm trading, I would owe $0.00 sales tax on the new car. Living in Michigan, I would typically pay 6% tax when I go to register it ($3,000). The dealer is giving me less than I could sell my '08 coupe for but unless I sell it for at least $3k MORE than he is willing to give, I would actually end up losing. I assume there are many on this forum who have traded cars and/or are SURE of this tax rule. Please confirm (if you will) that I will owe $0.00 tax if I trade for the car vs. the $3,000 I will owe if I purchase it without trading. May sound like a step backward for some (Gen IV for a Gen II), but after having owned one, a 460hp ACR is plenty fast enough (vs my 600hp) and I'm willing to sacrifice the Gen IV technology for the WOW factor and exclusivity of a low, mile rare ACR. thanks in advance. John

 

[Jeebs]

I'm not knocking you. I love my 02 ACR. But would I love an 08 couple even more? Hells ya. BUT there is something about the gen 2 that just looks awesome.
GLWS or trade.

 

[Roysviper]

I have traded quite a few VIPERS and other cars even for others where no money was exchanged and you never have to pay any sales tax when it is an even trade....that is one of the main reasons I always tried to find deals that were even trades, ha...I love the gen 4 s.....but love the gen 2s as well...enjoy the gen 2...

 

[Mike Red 97 GTS]

I believe in Michigan you are taxed on the price of the new car then they minus the trade-in value of your car. At least this is how it was when I traded in a car for my viper. You could double check by calling the BMV.

 

[agentf1]

Mike is correct, if you buy a $55,000 GTS and your trade in is worth $40,000 you only pay tax on the $15,000 difference. This is why sometimes it is better to trade your old vehicle in. You always need to figure in the tax savings vs what somebody will give you privately. If I am selling a car privately I will try to convince the dealer to do a courtesy trade in where they run my private sale through the dealer so I can still get the tax break. Not all dealers will do this and the only downside to this is the buyer will need to pay tax on the full amount. Some private buyers like to say they paid less for the car than they actually do to save on taxes. Of course I would NEVER do this or anything that would cheat Uncle Sam. ;-)

I have to agree with you on the Gen II vs any other newer Gen Viper. There is NOTHING like a Gen II. I also think they are the deal of the century right now and the deals won't last forever. As I am sure you know Final, the nice ones are getting harder and harder to find.

 

[past ohio]

In Ohio you put on the back of the title what the car is being sold for....any playing with numbers can get you in a lot of trouble, never heard of any dealer doing a courtesy trade, unless he is your brother in law, I think he could lose his licenses and get fined for making sales , etc....my $.02

 

[agentf1]

In Ohio you put on the back of the title what the car is being sold for....any playing with numbers can get you in a lot of trouble, never heard of any dealer doing a courtesy trade, unless he is your brother in law, I think he could lose his licenses and get fined for making sales , etc....my $.02

It is perfectly legal to do a Courtesy Trade although not all dealers are willing to do it since they do not really make any money on it. Some will do it if you are a good customer.

Of course lying about what you paid to save taxes is against the law. i would never do that as it is not worth the trouble you can get in but I have seen many buyers do it.

 

[ohiotj]

I am wondering what you have found out? Please don't advise the op unless you are sure of the laws in MI. They vary state to state.

 

[jes4fun]

I live in Michigan and unfortunately you pay the sales tax on the full amount of the purchase price of the car. Even if you trade your car in you still pay the sales tax as if there wasn't any other car involved. I just went through the same ordeal with a car I purchased. Even if you swap cars you pay sales tax on blue book value.

 

[Blainne]

I live in Michigan and unfortunately you pay the sales tax on the full amount of the purchase price of the car. Even if you trade your car in you still pay the sales tax as if there wasn't any other car involved. I just went through the same ordeal with a car I purchased. Even if you swap cars you pay sales tax on blue book value.

Rules vary from state to state. Reason why I keep my Legal Home of Record in the FRIENDLY Vehicle states ONLY.

Here are my game breakers for certain States:

Some states charge vehicles a yearly Property Tax.

Some states don't honor the trade in difference on Sales Tax.

Some states don't give military exceptions for Sales Tax.

Some states make you have front plates.

And don't forget the Counties in States that require Emissions and Safety inspections.

Amount of Sales Tax I paid on my last 4 cars---------------------------------------> ZERO

 

[FinalEd357]

FYI all Michiganders: I confirmed with DMV yesterday MI has no trade-in credit whatsoever (new, used, more, less, in-state, out of state). You pay 6% on the new price when you go register vehicle, no exceptions. Guess I won't be trading. Will sell on my own...