Is there a tax advantage to trading in your car to a dealer as opposed to selling it on your own?

Question

I am looking to buy a new truck and did some research on what my current truck is worth. I can make about 3K more if I sell it out right instead of trading it in to the dealer. I am not sure of the taxes invovled. I have always traded in and never sold on my own. If I were to sell, I would sell before I buy so I could put the extra money toward lowering the financing amount. What would be the best route for me to take?

Answer 1

you can listen to the others, and for what its worth, yes you will get more selling it yourself. however do you have the time to sell the car/truck. do you wanna wait wile people say they are coming to see it and never do, or i need a week to get the money together, or i would like you to fix this, and that...you get my point im sure. that's what dealers are good for, and as far as you trade value is concerned you probably got it from Kelly blue book or something like that, they are all garbage, no one pays Kelly blue book value so the number you think isn't reality anyway. trade it see if they can come up i a little more get the tax credit whatever it is in your state and be driving you new car/truck now instead of waiting and see someone else driving the car/ truck you had to think about.

hope that helps
good luck!

Answer 2

Book prices are not the end all be all that some think. I have seen cars list for $2000 that sell for substantially less. It all depends on the current market. That being said, you will always do better selling your car rather than trading it in. The dealer needs to make a profit when they sell it. Most people trade in vehicles because it is less time consuming and easier than selling one. You have the flakes that don't show up as promised or try and beat you down to some ridiculous price. I would say sell it yourself, decide which car you want and then buy it after negotiating the best deal possible.

Answer 3

Binary options let users trade in currency pairs and stocks for various predetermined time-periods, minimal of which is 30 seconds. Executing trades is straightforward. The system uses user-friendly interfaces, which even an 8 years old kid, can operate without having to read any instructions. But winning trades is Not easy.
Binary trading is advertised as the only genuine system that lets users earn preposterous amounts of money in ridiculously short period of time. Advertisers try to implicate as if you can make $350 every 60 seconds; if it was true then binary trading would truly be an astonishing business.
However, does it make any sense? Can every trader make tons of money in binary trading? Who is actually paying all the money or the profit to traders?
The first challenge is finding a trustworthy binary broker; secondly, you need to find a binary trading strategy, which you can use to make profits consistently. Without an effective trading strategy, there is no way you can make money in this business.
Learning a profitable trading strategy is possible, You should watch this presentation video https://tr.im/16635
It's probably the best way to learn how to win with binary option

Answer 4

I do not believe that trading in the car will make any difference on taxes. You cannot claim a loss on the car on your income taxes. I am not even sure if you can do it for business purposes since the purchase of the car would probably have been written off anyway. It should not reduce the sales tax either. The value of the tradein will just be considered part of what you purchased the new car with. The total sales price of the new car does not change. Even with that involved, I am not sure the reduced value that the dealer tradein (vs. the value of you selling it on your own) will be enough to offset taxes. You would do better to sell it on your own and get a bit more money out of it.

Also, I would do a bit of research with who you do your financing thru and what their terms are. Some places have something called "The Rule of 78".
http://www.bankrate.com/brm/news/auto/20010827a.asp
This is a practice that makes extra payments kind of worthless, you still pay the same amount of interest whether you pay out all of the payments or if you pay extra. Not all dealers do this but there are a few out there that still do. I would not be suprised to find a bank trying to sneak it past you either.

Answer 5

The first poster is correct. For some reason they allow the price (of the trade in) to be deducted and NOT taxed. At least that in NYS. I've done this (mostly because the car had transmission problems and I thought it woud be fun to stick it to the dealer for a change).

BUT that's still not always the best. Here in NYC, sales tax is about 8.5%. So on each thousand dollars that's only $85. You could easily negotiate that much more or less during the sale of your used car.

Good Luck.

Answer 6

the best trading software http://tradingsolution.info
i have attended a lot of seminars, read counless books on forex trading and it all cost me thousands of dollars. the worst thing was i blew up my first account. after that i opened another account and the same thing happened again. i started to wonder why i couldn,t make any money in forex trading. at first i thought i knew everything about trading. finally i found that the main problem i have was i did not have the right mental in trading. as we know that psychology has great impact on our trading result. apart from psychology issue, there is another problem that we have to address. they are money management, market analysis, and entry/exit rules. to me money management is important in trading. i opened another account and start to trade profitably after i learnt from my past mistake. i don't trade emotionally anymore.
if you are serious about trading you need to address your weakness and try to fix it. no forex guru can make you Professional trader unless you want to learn from your mistake.

Answer 7

Yes, there is - you are not paying tax on the trade-in value but do your homework, and see if you can get more by selling it to a private party.

Answer 8

Easy, short answer. Ignore all these long winded answers.

Sell the car on your own!
The dealer will not give you near what you can sell for.