steveny said:Here is the original post:
This is a little off topic, but lets say you negotiate a deal to buy a new NSX for $80,000 less say $60,000 for a trade ( I know these aren't your numbers). The NSX is scheduled for July delivery. If between now and July you're able to sell your trade for $65,000 can you simply write a check for $80,000 when the new NSX shows up? Or are you bound to keep your trade-in car until the new NSX shows up?
So...in his example instead of having a $60,000 trade and a $20,000 check he is writing a $80,000 check. Here in NY tax is due on any cash part of the transaction. If he trades for 60k and adds 20k check he owes tax on 20k, but if he sells out right for $65,000 and writes a check for $80,000 he will owe tax on the entire $80,000. I figured the additional tax liability he would owe on $65,000 at 8.25% NYS sales tax rate for my county in my post.
By selling instead of trading he is effectively costing himself .0825 on what ever he gets for the car. He would need to get more than .0825% than what the dealer has offered in trade to make selling the car worth the time. :wink: :wink: :biggrin:
You are right (mostly). I read that too quickly/incorrectly. :biggrin:
But the additional sales tax liability would be on $60,000, no ? (Not $65K)
No trade 8.25% of 80K = $6,600
Trade-in 8.25% of 20K = $1,650
Difference = $4,950 :wink:
But your point is well taken. Nowadays it becomes, especially in the higher-end (read higher priced) car classes, that the seller of an exotic really needs to at least consider trading in his/her car IF, of course, they are not simply selling it outright, simply because of the sales tax savings. That can ALMOST, and in some cases CAN, make up the difference between trading it in and selling it privately for a higher price.
So, in the above hypothetical(?) case the seller would have to sell his car for $65K privately just to "break even" with the $60K trade-in offer from the dealer. Makes a difference, doesn't it ?