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What happens with the taxes is you pay the taxes on the net difference between the purchase price and your trade in. For example if your buy a car for $75,000 and trade in a car for $35,000 you pay taxes only on the $40,000 difference. In B.C. with a 15% luxury tax on cars valued at more than $55,000 the tax savings on a trade in can be quite significant.
I just traded in my 2013 335 xdrive to my dealer for my M3 and factoring in the 15% tax savings on the trade in there was no way I would have come out ahead if I sold my car privately.
By the way, thanks again bobblehead for all your help in the purchase decision for my M3! I am loving the M3 more and more every day!
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