New car sales tax

[puma1552]

I'm sure this may be state specific (in this case Minnesota), but I just went to a dealer to test drive a car for the wife and when we ran the numbers, the amount of tax calculated was on the price of the car AFTER the trade value was subtracted. For example, let's say the car was $25,000 and the trade in value was $5,000, they calculated sales tax just on the $20,000, not the original $25,000 the car actually cost.

Is that really how it works? I always assumed the tax would be calculated first on the $25,000, and then my trade value would be subtracted after the fact.

 

[eternlgladiator]

I don't know the rules but what you said sounds right to me. Tax is on what you're paying them in cash. They can't tax your trade in. IMO

 

[Synchromesh]

I'm sure this may be state specific (in this case Minnesota), but I just went to a dealer to test drive a car for the wife and when we ran the numbers, the amount of tax calculated was on the price of the car AFTER the trade value was subtracted. For example, let's say the car was $25,000 and the trade in value was $5,000, they calculated sales tax just on the $20,000, not the original $25,000 the car actually cost.

Is that really how it works? I always assumed the tax would be calculated first on the $25,000, and then my trade value would be subtracted after the fact.

Yes, that is how it works. It's all about the total value of final transaction.

 

[jknight8907]

Yes, that is correct. And at least in some states, if you sell the vehicle on your own instead of trading, you can still subtract that amount from your new purchase by presenting a bill of sale when you pay the sales tax on the new vehicle. (That's a great line to throw out when the salesman is trying to talk you into accepting their absurdly low trade-in offer by playing the 'it saves you tax money' card. Takes the air right out of that balloon)

 

[puma1552]

Great, for the record we are looking at a new 2012 (read: redesigned) beetle w/sunroof and push button ignition. They are offering invoice and 0% for 60 months, and offered me top end on my trade, but I'm working on squeezing a little more out of the trade.

 

[Synchromesh]

Great, for the record we are looking at a new 2012 (read: redesigned) beetle w/sunroof and push button ignition.

Ewww, VW.

 

[puma1552]

I hear you, but it's what the wife wants. She also likes a used '09 or so C300 4Matic. Also looking at new Mini Coopers, Honda CR-Zs, and one or two others but I can't remember. Also going to look at a Focus Titanium hatchback, but that'd be more my next car.

I'd prefer she stay away from anything German to be honest, particularly VW. I wouldn't care for a 3 year old Benz on the tail end of the warranty too with 30k miles. Not going down that $1k repair road. At least the Beetle has a warranty so if it is a lemon it won't cost us out of pocket to fix it. I think Coopers are extremely played out after 11 years without any real changes, and in my limited experience around them and peering in, they seem pretty cheap to me but more than anything they just look stale and dated after over a decade of the same old ****.

Happy wife happy life yadda yadda.

 

[yg17]

I hear you, but it's what the wife wants. She also likes a used '09 or so C300 4Matic. Also looking at new Mini Coopers, Honda CR-Zs, and one or two others but I can't remember. Also going to look at a Focus Titanium hatchback, but that'd be more my next car.

I'd prefer she stay away from anything German to be honest, particularly VW. I wouldn't care for a 3 year old Benz on the tail end of the warranty too with 30k miles. Not going down that $1k repair road. At least the Beetle has a warranty so if it is a lemon it won't cost us out of pocket to fix it. I think Coopers are extremely played out after 11 years without any real changes, and in my limited experience around them and peering in, they seem pretty cheap to me but more than anything they just look stale and dated after over a decade of the same old ****.

Happy wife happy life yadda yadda.

I love my VW. My GTI is over 3 years old with just under 60,000 miles on it and has been pretty much flawless, one minor issue that was fixed under warranty with no hassle and that was it. Love that car.

But yeah, sales tax is cost of the car minus trade in. And in Missouri at least, probably other states, if you total your car, they'll subtract your insurance payout from the purchase price. When my previous GTI was totaled (btw, VWs are safe cars too. Found that out the hard way), it was only a little over 1 year old, so when I bought the new one, what my insurance gave me was deducted, I think I only paid around $200 in sales tax for the new one.

 

[her50]

What a pitty you mislike german cars ...
which - for a change - are relatively sustainable & also build in the States/Eastern Europe/China ...
maybe it's better (imvho) to back away from
german tactical wespons/aircrafts ... which are delivered to may countries in the world, incl Israel?!?
My polemizing contribution.

 

[Synchromesh]

What a pitty you mislike german cars ...
which - for a change - are relatively sustainable & also build in the States/Eastern Europe/China ...
maybe it's better (imvho) to back away from
german tactical wespons/aircrafts ... which are delivered to may countries in the world, incl Israel?!?
My polemizing contribution.

Yes, it would be better to back off from anything German-made. Imho, their weapons and many other things are far inferior to many others.

As for cars, their cars became total junk after mid-1990s. There is a saying: nothing is so expensive as a cheap Mercedes. It's there for a reason.