We all know that each year brings new tax laws and a lot of the times it can be confusing. You don't want to pay any more money than you need to. Especially not on a large purchase such as a car.
Thankfully we did the research for you. We did our best to answer all of your questions about car trade-ins and tax credits. There's a summary at the bottom of this post, also known as "TLDR" if you want to skip straight to the answer. But only if you want to miss out on all this juicy tax jargon.
Tax incentives are a great way for Toyota shoppers like yourself to get a great deal on your new purchase. Tax incentives are a type of special offer that dealers and other local businesses offer. You can think of them as a sort of discount or sales offering. The trade in tax incentive allows you to trade in your vehicle while paying fewer taxes.
For example, let's say you see one of the new 2019 Toyota and it has all the latest features that you want in a car. But it's priced at $40,000. Now you're wondering to yourself, how are you going to afford this technological marvel. Well lucky for you Johnstons Toyota happens to have a trade tax incentive going on.
Which means that, if you trade in your vehicle here, we'll buy it. Then we'll take the amount that we bought your used vehicle for and subtract it from the total price of your new car. For example, let's say your car was worth $10,000, we'd take that $10,000 off the $40,000. Which would then bring your total price down to $30,000? Instead of paying taxes of $40,000, you'll only pay taxes on $30,000.
Almost anyone with a car to trade in can benefit from these types of incentives. From single men and women to families, small, medium, and large businesses. Of course, there are exceptions to this and not everyone may benefit from it.
It'll vary depending on your vehicle actual market value. How well did you follow the maintenance schedule? And a whole bunch of other factors. The best thing to do is to come in and let us look over your vehicle and service records to give you a fair price.
Yes, you do need to trade in a car to get a trade-in tax benefit. It does not have to be the same brand as the dealership you're trading it into. For example, if you have a Volkswagen and you decide that you want that new 2019 Toyota and you come to us, we'll take your trade-in. We'll follow the normal trade-in process and make sure you get the car that suits you.
We would say there are three simple steps to this. First, you decide on what car you want. Then we evaluate your car based on service records and market value. And finally we fill out all the paperwork and you drive off in your new car. It's as simple as that.
| 8.88% x (Total car price - Trade in value) = Tax credit | ||||||
|---|---|---|---|---|---|---|
| NY tax rate (8.88%) | TP- Total car price | TV- Trade in value | TP - TV = Final Price(FP) | Tax without trade (.0888*TP) | Tax with trade (.0888*FP) | w/o trade - w/trade = Savings |
| .0888 | $20,000 | $4,000 | $16,000 | $1,776 | $1,420.80 | $355.20 |
| .0888 | $10,000 | $1,200 | $8,800 | $888 | $781.44 | $146.56 |
| .0888 | $32,540 | $6,500 | $26,040 | $2,889.55 | $2,312.35 | $577.20 |
TL;DR In New Hampton there is a car trade-in tax credit. This saves you from having to pay a higher sales tax when you go to register your vehicle at the DMV. For example, your car is valued at $5,000 and the car you want to buy is $20,000. You subtract $5,000 from $20,000 and get $15,000.
Then you multiply that $15,000 by 8.88%, which equals $1,332 in taxes you have to pay. Without the trade in, you would have to multiply $20,000 by 8.88%, which equals $1,776. By trading in your older used car, you could easily save $444 and get a clean new car. Best of all, anyone can benefit from this, including leaseholders.
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