Does a using the value of a trade-in towards MSRP essentially get lost the same way DAS does?

Ask the Hackrs
1

Have some quotes on an Id.4 S vs Pro (which comes with 100 mi extra range)

Only thing is, in WA state you don’t pay taxes on the vehicle if it’s under 45k. The dealer said we could reduce the cost of the Pro an additional 3k by offering me 3k less on trade-in and would effectively mean I pay no taxes… Great right?

However, from what I understand if the car gets totaled that 3k in trade-in value is essentially lost forever… correct? Or is there anyway around that? (dealer is already at bottom dollar on the id4 pro s - dropped MSRP below invoice - Best deal I can find in the state)

2

Trade in = Down.

So yes a total loss means you lose all Down paid.

How to get around? He pays you CASH for your trade in and you buy the car with with zero due and keep the cash.

3

Yes but: what’s your tax rate? 8%-ish of total cost?

4

sounds concerning. can you share your full deal structure including trade in details?

5

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This is showing 9k trade-in value, -3k goes direct to selling price to drop it 10k down total (was 7k prior). I already mentioned the last 6k (shown here) would go back as cash, not DAS like has has shown and he agreed - just didn’t send an updated spec sheet.

If i sold it private, I could probably get about 13k vs 9k offered from dealer, so 4k difference but it drops us below the 45k threshold for state taxes which is 10.2%

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6

The 4k rebate won’t kick in for the next buyer if sold privately. So it’s not as desirable as you might think (Well unless the dealer is selling it for 20k)

7

Got it, so right now it’s effectively $171 a month with $9k down (value of trade).

  1. Verify on edmunds whether their MF is marked up.
  2. I’d get quotes from local dealers + the car buying sites to get a feel for how far off the true trade in value is.
  3. The dealer discount doesn’t seem super strong for a 2023, but I know seattle is a tough market :smiling_face_with_tear:
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8

So how much would the total tax paid over the lease be, if you took the trade out?

9

My understanding is that only $15000 of the price would currently be exempted.

10

Dealer said it ends up taking $45/mo or so for taxes. So a decent amount for 36/mo lease.

Since the price ends up being low enough, there’s effectively no taxes since the lease ends up costing about 15k in total anyways so the state tax reduces tax amount by 15k… Obv if i chose to buy at the end i’d need to pay taxes on the the residual 30k

11

Never take anyone’s word without verifying

Post a calc without the trade

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12

Just make sure you are not giving up $3000 in trade value for $1500 (10% of 15000) in tax savings.

13

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