Trade In Opportunity is a Tax Advantage
NEED TO SELL YOUR CURRENT VEHICLE?
HERE ARE SOME BEST PRACTICES WE RECOMMEND
It seems like it’s a no-brainer to sell your car privately, but there’s a long list of disadvantages
- Make sure you are keeping your payments current while you are selling your vehicle.
- Make sure the vehicle is properly detailed. Dents and scratches have been repaired. All service lights are off.
- Be ready to provide your Service history records, you may wish to have on hand a recent inspection from a trusted mechanic.
- Next list the vehicle on multiple digital locations. Expected costs are on average $100.00
- Now, if the vehicle is paid off be prepared to meet someone at the Motor Vehicle Dept to transfer the Title. If the vehicle is not paid, you will need to speak with your bank on proper procedures for Liens.
Or you can call on your friends at Courtesy Chevrolet and trade it in.
Our best practice for a trade in with our customers has been simply bring the car as it is and hand us the keys. We can hand you a check.
TAX ADVANTAGES FOR TRADE IN WITH DEALERSHIP – COURTESY CHEVROLET
It seems like it’s a no-brainer to sell your car privately, but there’s a long list of disadvantages you need to consider.
- Time to sell vehicle. You’ll need to create a classified ad, post to several different sites, answer emails and phone calls, and worst – arrange appointments for prospects to check out the vehicle. Oftentimes, people cancel or don’t show up.
- It can take several weeks to sell the vehicle, but sometimes you do get lucky and find a buyer right away – especially if you price attractively compared to other vehicles on the market.
- A disadvantage is the hassle of having to deal with payments, DMV paperwork, and the possibility of fraud during the transaction.
- Sellers particularly women, are concerned about having strangers come by to test drive the vehicle. Although the crime rate is very low and there are things you can do to minimize it, there’s still a chance that something bad could happen and some people don’t feel comfortable with that.
- Some States selling your car privately will prevent you from getting a trade-in tax credit. This is only a disadvantage if you’re in the market to buy a replacement vehicle at the same time. The trade-in tax credit can only be applied if you buy and sell a car in one transaction at a dealership.
For example, on a $10,000 trade-in, the tax credit can be worth up to $1,000 depending on your local tax rates. - Finally, if you sell a car that breaks down right away, you could be dealing with some big headaches. Although they may not have a strong case, that doesn’t stop many buyers from taking legal action.
* In the end, you need to weigh these pros and cons and see if an extra $1,000 to $2,000 is worth the extra effort. If saving money is your top priority, then we feel it’s definitely worth selling the car yourself, but if convenience and safety is at the top of your list, selling to a dealer is probably your best option.
BUYING NEW? YOUR TRADE-IN MAY LOWER YOUR SALES TAX – PHOENIX
Trading in your car can bring sales tax benefits if you buy another car from the dealer at the same time. Many states offer a trade-in tax exemption that lowers the amount of sales tax you’ll pay in the trade. If, for example, you and the dealer negotiate a $20,000 purchase price — and you trade in a vehicle for $5,000 — the trade-in value is deducted from the new car’s cost and you’ll only be taxed on $15,000. There are, however, seven states that don’t offer a trade-in sales tax break: California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. The District of Columbia doesn’t offer this benefit, either, so you’ll pay sales tax on the purchase price including trade-in. DMV.org shows you where to look up your state’s new car sales tax rate.
CONSUMER REPORTS – ASK COURTESY CHEVROLET
Many buyers prefer to trade in their current vehicle when getting another one, because it’s easy. All they have to do is drive to a dealership, sign a few papers, and drive away in a different vehicle. They can apply the trade-in credit to their down payment, reducing the amount they need to finance.
There can be tax advantages, too. Most states require sales tax to be paid only on the difference between the price of your trade-in and the vehicle you’re buying, not the full price of the next car. But this tax benefit doesn’t apply if you sell your old vehicle yourself. Check with your state’s Department of Motor Vehicles (DMV) for details.
The downside of trading in your vehicle is that you might leave behind hundreds of dollars—if not thousands—for the dealer. As mentioned before, the best you can hope for when trading in is to get the car’s wholesale value, which is far less than what you would expect to get if you sold it yourself. In addition, even if you’ve checked all of the pricing sources and think you know what your vehicle is worth, you’ll probably have to haggle with a salesperson to get the best deal.
HOW TO GET THE MOST MONEY WHEN TRADING IN YOUR CAR – PHOENIX
There are several things you can do to maximize the value of your trade-in:
- The appearance of your vehicle is an important consideration when a used-car manager estimates its value.
- If your car needs repairs, it could help to get an estimate to take with you. This could provide a little bargaining power when the dealer’s estimator starts deducting repair costs from the figure offered to you.
- Try to sell your car to a used-car dealer. They’re always looking for clean, low-mileage vehicles for their lot. And if yours is a popular model, you just might be able to get more than the wholesale price for it.
WHAT TO LOOK FOR WHEN NEGOTIATING YOUR TRADE-IN – COURTESY CHEVROLET PHOENIX
You’ll get the best deal by keeping the purchase and trade-in negotiations separate. If you allow a salesperson to mix the two, it gives him or her too much opportunity to manipulate the figures. It could end up that a good price in one area is canceled out by a poor price in the other.
We suggest that you nail down the price of the car you want to purchase first, then discuss your trade-in allowance. Because dealers make good money reselling trade-ins, there’s some incentive for him or her to be competitive with a trade-in offer.
Keep your eye on the bottom line. What’s important is the net amount you have to pay. Be sure to read and understand the sales contract before you sign it. If you have a problem with any terms or conditions, ask questions. After you sign, you’ll have little recourse.