I know for purchase you reduce your tax when you trade in a car, however, does that work for a lease as well? I have a paid off car and was thinking of asking if anything to be gained by trading at the dealer or just sell to vroom or anybody else?
Thank You,
owned to lease, yes. lease to lease, no.
Mike is correct about the question you asked.
However, savings in tax after trading in at a dealer generally is less than selling your car for top dollar and by that, I don’t mean selling to Vroom.
It also depends on what car you have to sell and the location of the purchaser.
If you want me to price out your car, feel free to PM me the info and I will get you my best offer which is generally better than Vroom and other online buyers unless its an electric car.
Thank you both. Its a 2020 GC High Altitude. Dealer offering 32k and vroom at 33,400. Dealer is out of NY. Car is owned. Just waiting for DMV to send clear title.
So honestly how much would the tax benefit be? Wondering if it is even worth it or keep it separate trabsactions? Its totally paid off. I tried to look it up but the articles I saw seem to be unclear.
It’s the difference in Equity, if you are in 10% zone (For simplicity) and you have $1000 in equity? It’s $100, if you have $10000 in equity, it’s $1000.
If the dealer you are trading in gives you $5000 in equity but Carvana will give you $10000 in equity, then that $5000 delta is better than that $500 you saved on Taxes.
In my experience this can be hit or miss, based on individual dealership policy. Some will do it, some won’t. When I find a dealer who won’t, I just move on. Where a dealer will do it, it does tend to favor a purchase over a lease (more tax to offset in most states).
The car is paid off so it is total equity. I was reccomended to have dealer run both quotes. But yeah I can understand 5000 delta def makes more sense.
I think you are mistaken.
With a purchased car it wouldn’t make a difference how much equity you have, since you own the whole car. I think your statement only applies when trading in a leased car.
Can someone see if I am missing anything on this contract? Car will be paid out as 32,000 as soon as i deliver the title which should be next week according to DMV website. I cannot see taxes or dmv fees here? Yeah Acqusition is marked up and no budging on it. Residual should be 65%. Tax rate is 8.625. There seems to be some benefit on taxes but its about 500 based on my calculations.
Just bumping if anyone can provide input on above?
Its captured in that ~$3500 in upfront charges
Thank you. Appreciate the input. Dealer been very good so far. Will post pic once deal is done.
Looks like he isnt applying your $38k trade in? If he was your payment shouldve been zero
I am getting a check for it, once I mail title.
