Hey guys when you are buying a car obviouly you have to pay the great California sales tax of 8.25%.

So if you trade in a car do you pay sales tax on the difference or sitll pay the whole thing?

Like I buy a a $32k car
I trade in my car for $15k

Do I pay sales tax for the new car for the difference? $17k or the whole $32k? I think I only pay for the $17k but I want to run ot on people that traded in before (I have not yet)

Cheers and thanks for input.

Nick

 

They are two separate transactions. You sell the car to the dealer for X (they pay tax on that)...and you buy the car for Y and pay tax on that.

 

You'll be paying sales tax on the full purchase price of the car.

Your trade in is basically another form of paying for the car... its the same as if you put down 17K in cash instead of trading in a 17k car.

 

A good rule of thumb to go from the "price you pay" to the "out-the-door" price is to add 10% (tax + registration).

So your $32k STi is now pushing $35k

 

Oh and from someone who's investigated it...unless it's an '03 with low miles, getting $15k in trade-in will be tough for a WRX. Unless you're paying sticker for the STi.

 

I know I ain't paying sticker for the STi. Still working on the trade.

I knew the state would not lose anything on that.

Nick