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Trade in a used car (to save sales tax on a new car) AND sell it at the same time? Possible?
Is this hypothetical situation feasible?
I want to buy a $30,000 car from a dealer. They will give me $19,000 trade in on my car, if I do this I save $19,000 x 6.5% sales tax on the new $30,000 car. (In other words I pay sales tax on $11,000 instead of $30,000.)
My friend wants to buy the car from me for $19,000 and I would love to sell it to him for this price, but then I'd lose the sales tax offset on the new car.
Would a dealership do something like let me trade in the car and then turn around and sell it to my friend at the same price, presumably collecting a processing fee as well as still generating the sale to me on the new car? I was recently told that this happens and the dealership would charge $250, but it seems strange. Thanks in advance for any input.
Last edited by frankqfrank; 12-01-2011 at 11:15 AM..
In your scenario, wouldn't the dealer still have to charge your friend sales tax when they sell it to him for $19K?
Yep but if I sold it to him privately he would as well. Also a friend with a relative with a dealership said that his relative said this sort of transaction does happen quite a bit, but I'd still love SDer input.
Last edited by frankqfrank; 12-01-2011 at 11:40 AM..
They basically will make the deal with you then turn around and make the deal with him. Yall just need to make sure the dealership is going to re-sell the car to him at $19k. Basically a cover yalls ass type of situation with the dealership. I am sure he is going to have to pay some dealer handling fees as well. Doable for sure though. Dealership is going to want to make some money off the situation.
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