is this a dealer trick?

[SandEagle]

so i went and looked at a car that comes with a $1000 rebate. the finance guy added the tax and then took the $1000 off at the end. i also had a trade-in that he subtracted after taxes.

i would think think it would be:
cost of car - rebate - tradein = subtotal + tax

instead he did this and it ended up $150 more:
cost of car + tax = subtotal - rebate - tradein

 

[halik]

Google says it's a state by state thing. With a tradein it would make sense that it's after tax - it only changes the means of payment, not the selling price of the car.

 

[Phanuel]

Google says it's a state by state thing. With a tradein it would make sense that it's after tax - it only changes the means of payment, not the selling price of the car.

Depends on the state. I'm too lazy to go and verify this right now, but from an older article on Edmunds,


Do you recommend that consumers trade in? Or should they sell on their own?

Weismann: It depends on what they've got. If you bought right in the first place, you might have something to trade in that will bring a good price.

Mills: Heck, yes. It is quick and doesn't cost you as much as you might think, especially if you drive the right kind of car. Also, many states (all the ones I have worked in) give you credit for your trade when figuring sales tax. For instance, let's say you are buying a $20,000 car, and have a $12,000 trade. The sales tax in my state is 6 percent on cars. You will pay taxes on $8,000 in most states, instead of $20,000, for a savings of $720.

 

[Kroze]

I didn't know it was a state by state thing until now. The more you know...

 

[woodie1]

Most states allow the dealer to reduce the taxable amount on a car sale by the trade value. CA does not IIRC. The rebate could go either way and also depends on if you get it right there at the time of sale or if it will be mailed to you from the mfr.