01-05-2023, 03:59 PM | #1 |
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Trade-in question
Hey all, been a while since I posted here, quick question on trade-in.
If I trade a car that I own that's worth $40K to a dealer, and buy a car that's worth $100K, I would only pay sales tax on the difference, which is $60K. If I trade a car that I own that's worth $40K to a dealer, and lease a car that's worth $100K, would I pay only the difference in taxes on the difference? Or does it not work like that? I have an opportunity to trade in my 2018 Imola M3 for an F90 M5 for a good deal, but I am being told that trade-in/lease doesn't work the same as trade-in/purchase. Am I losing it? I thought it was the same. |
01-11-2023, 12:18 PM | #2 | |
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04-22-2023, 03:21 PM | #3 |
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can only speak with certainty regarding NJ tax rules, but I know the rules are the same in Pa and can’t imagine they’d be different in NY:
for a trade on a purchase the value of the trade-in is deducted from the purchase price of the new car for tax assessment, so there is a significant tax advantage to be had. in the case of a lease there is zero tax advantage because these are two separate transactions where 1) the dealer (or whomever) is buying your used car outright and 2) you agree to pay BMW to rent their car over an extended period. You don’t own it. to be considered: if you have a desirable trade-in (and it sounds like you do) the arithmetic is no doubt better if you sell the car yourself, even if to Carvana or whatever. btw, never ever prepay any part of the lease deal beyond the BMWFS requirements, never ever prepay the sales tax. good luck. |
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