Since financing has become way more popular lately with how leases are priced, trades have come into play. Question for @dealers, in a state that gives tax credit from a purchase to purchase sale like NY, can you trade in a family members car in even though your name is not on the title and receive the tax credit? If yes, is there any limitation to only same address family members or last name?
Also are trades considered a sale towards the annual amount of cars you can sell in your state before needing a dealers license, it would seem like the answer is yes but double checking here.
Does the purchaser have to be the title holder of the motor vehicle that he or
she is trading in to receive a credit against the sales price?
No. The Sales and Use Tax Act does not require that the purchaser who is trading in a
motor vehicle be the title holder.
In reality, unless it’s a $2000 clunker, you won’t get market value for a vehicle via trade-in where you cannot deliver clear title to said vehicle to the dealership. At a minimum you need to get the titled owner to sign the title or a power of attorney.
Of course the owner of the trade would sign the title. Why do you say dealers won’t give market value, do some dealers low ball, sure, but as a general rule? Even if they are a few grand below, if said vehicle is worth enough, it can offset taxes way more than the loss you’re taking on the trade
The same economics would say they’ll loose 5k if they don’t get the traded car.
Either way I’m good, if they give me market value, great. They lowball like crazy, sell to others that offer market. If below market value but tax savings cover the difference I’m still good.
Maybe, but they know the game better than the average buyer and the tax credit makes their channel more advantageous to the average car buyer. And they can extract the majority of the benefit, that’s all I’m saying. I’m not saying don’t do it. Heck I’d do it. But I’d know that I saved $100 in the end not the $1,000 the tax savings purported to save said buyer. But $100 is still more then $0 and that’s the reality of it.
No financed vehicle being traded in. X amount payoff. Y amount equity. Z amount trade in offer. What’s going to be applied as sales tax credit in NY? Thanks
I ran into an Audi dealer in NJ whom also enforced tax law in this manner, claiming I could only reduce my taxable balance by the equity position I held in the financed vehicle. I went to another Audi dealer, in the next town over, who gave m the full trade-in value reduction. Who was right and who was wrong… I’m not an accountant, but getting a dealer to change policy is an uphill battle. The easiest way to solve this maybe to calculate the lost “tax savings” and ask for it as an additional discount.
If I’m reading this correctly (and I read the thread twice and your posts specifically three times): you live in NY, you’re doing a deal with a MD dealer, you’re talking to your sales person, and expecting them to understand how the trade-in affects your sales tax 4 states away??
I don’t know that I would even expect the F&I manager at an out of state dealer to know the rules beyond the adjacent state. And I doubt whomever you spoke with ran this by their tag and title clerk to try and get the real answer.
Definitely do the math, I might fib “I recently did this…” and have them ask their tag and title. If it’s a material amount, I’d push them on a corresponding discount.
