tax question (buying v trading)

[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

 

[ohiotj]

Can't say for sure for you in Michigan but in some states there the buyer only pays tax on the difference. Since you would not have a difference on the price of the cars you may not pay tax. Simply call a dodge dealer and ask the salesperson if you only pay tax on the difference of a used car. In ohio you pay tax of a used for the full purchase price. They just changed the law in west virgina to taxing the full purchase price on used cars too. All depends on your state.

 

[viperprowler1]

I am a retired NY Dodge dealer and in NYS, you pay tax on the trade difference...the balance due between the car you are buying and the item you are trading. If you trade your car for one of same or lesser value, either an even swap or the other guy is paying you money, you owe no tax...at least in NY. As the previous post suggests, you should contact a local new car dealer and ask what the rule is in your state or you could contact you local DMV. Good luck, Mike

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

 

[wikkid]

Your right on both accounts, no tax paid on upside down deals, and you are crazy going from gen IV to gen II

 

[FinalEd357]

Thx for the feedback. I was going by what the selling dealer told me Saturday (in Ohio) and will confirm with state of Michigan tomorrow. I know some would think I'm crazy. I love both cars. I just think I will enjoy owning a Bumblebee ACR more vs solid red coupe. I don't do long drives in Vipers and have always looked for a striped Gen 2 ACR. If I were putting thousands of miles on it per year and tracking, would keep the Gen 4. Not a single bad thing to say about the car - it is as great as I expected. Just have more gut 'passion' for the Gen 2 ACR.

 

[Raven]

Did you buy your red coupe at Ringgold?

And while I'm not sure about Michigan, in Ohio, you definitely pay full sales tax on any USED car purchase regardless of any trade in value.

Vampires...

 

[past ohio]

Agree with Raven, many states don't care if a used vs used car transaction, the only relief from sales tax is when used being traded in on a new vehicle, don't you see that the car dealers have strong lobbiests so that they get new car sales !!

 

[Raven]

John - I saw a red (no stripes) Gen IV coupe at Woodward Saturday - was that your car?

 

[Bobpantax]

Just curious. Did you consider future parts availability when doing this trade?

 

[FinalEd357]

I was at Woodward Thursday with my car and Saturday with my sons in my daily driver. I have not considered parts availability. Deal not done yet just discussed what the dealer would agree to over the phone on Saturday - told him I needed Mon/Tuesday to research options. Yes, I bought my car from Ringgold... Thought they were very fair to deal with.

 

[CaptainDavid]

In Georgia you would only pay the (formally known as sales tax, now called title tax) tax on the difference, regarding used cars, the state has a book where they obtain the values not the actual prices. Don't have a clue about Michigan.