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Discussion Starter #1
I have a question about a trade in sales tax credit. I live in WA and if I trade in a car that is worth 35k I get 3.1k of sales tax credit. I may be wrong but I don't think that I would get this credit in cash but it's rather applied to the next car. So what happens if my next car is cheaper than 35k or it's leased (so the sales tax owed for the new car is lower than 3.1k)? Is there a way not to lose the difference?
 

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Greg220 said:
I have a question about a trade in sales tax credit. I live in WA and if I trade in a car that is worth 35k I get 3.1k of sales tax credit. I may be wrong but I don't think that I would get this credit in cash but it's rather applied to the next car. So what happens if my next car is cheaper than 35k or it's leased (so the sales tax owed for the new car is lower than 3.1k)? Is there a way not to lose the difference?
This varies from state to state, so you need someone from WA to give you details on how it works there.

In RI, you don't get anything back if you buy a cheaper car... you just don't pay any tax if the car you buy is cheaper than the value of your trade. On a leased car, you get no sales tax credit since the car is registered in a different name. The only "credit" that you get is that you don't have to pay sales tax on any trade equity that is used as cap cost reduction or to cover your fees.
 

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Also a lot of dealers will show "trading" the car in if you bring in your cash buyer. In other words, for a "pac" fee (usually around $500) they will run it through the books. I've done this on 5 different vehicles with 4 different dealers.

Even after the $500 it can still save you $. Trade price = say $35,000, your buddy will pay $38,000. He writes the $38,000 check to the dealer and they give you $37,500 trade value towards the new vehicle.
 

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Bvanw said:
Also a lot of dealers will show "trading" the car in if you bring in your cash buyer. In other words, for a "pac" fee (usually around $500) they will run it through the books. I've done this on 5 different vehicles with 4 different dealers.
I've done it on two vehicles and have yet to have a dealer try to pad a garbage fee on the transaction. You're coming out ahead but getting a bit hosed in the process.
 

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Magoon said:
I've done it on two vehicles and have yet to have a dealer try to pad a garbage fee on the transaction. You're coming out ahead but getting a bit hosed in the process.
Wow you've done good, I always scrap for every dollar and can't get away from the fee. The new vehicles were $100 over invoice (Ford & Chevy). They do have to pay B&O taxes on it also. Were they putting a little extra on the new vehicle? Say anything over $500 over invoice?
 

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Discussion Starter #6
A lot of good info, thanks all! However, I've done more research about leasing on this forum and it seems that putting any down payment is strongly discouraged. That's why, if I trade-in a car that costs 35k and lease another for $45k, I will probably not make a good deal. First, the value of my current car would exceed all payments needed for a lease (huge down-payment) and second, I will not benefit from the whole sales tax credit of 3.1k that I was hoping for because the Amount Financed in my new lease (Cap Cost - Residual) will be again much less than 35k.

If my thinking is right then there is no point in trading-in a car to lease a new one...
 

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Bvanw said:
Wow you've done good, I always scrap for every dollar and can't get away from the fee. The new vehicles were $100 over invoice (Ford & Chevy). They do have to pay B&O taxes on it also. Were they putting a little extra on the new vehicle? Say anything over $500 over invoice?
Both new cars were purchased at fair pricing with no fudging. I bought the wife's CRV at $500 under MSRP when the current model first came out in late 2001 (3 month waits soon followed) and my R at $300 over invoice (actually $700 under with the $1,000 rebate). Again, you're still further ahead of the game but a $500 courtesy trade fee is BS.
 
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