Honda Civic Type-R Over sticker dealer naughty list.

[boosted180sx]

it's safe to say he won't be hearing back from me ...

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[SpraykwoN]

it's safe to say he won't be hearing back from me ...

Oh he would for sure be hearing back from me lol

 

[FK8 Twigs]

In states like Texas where you are taxed on the difference between trade-in value and new car price, the tax savings can substantially offset the difference between trade-in and private-party value. You also have to put a value on the time and money it takes you to advertise, meet prospective buyers, show the car, and accompany the buyer to the bank and/or title office to ensure you get paid and end your legal responsibilities.

My purse strings are pretty tight, but I often find trading vs. selling a wash by the time I consider the tax savings and avoiding the salary loss by taking time off (or using PTO which is the same thing) - and that's before putting a value on my personal time.

Very true, but this also introduces other variables, such as whether or not the car you are trying to sell has a lien. If you still owe money on the car you are trading in, then you don't avoid paying the tax to the extent of the lien. I received a trade in offer on my 09 STI of 13,000. I sold it private party two days after buying my Type R, for 19,500. I owned 16,900 on the vehicle. Had I owed nothing, I could have saved $780 in tax. But I made 6,500 more by selling it privately.

My point still being, it comes down to the time and hassle and what your time and efforts are worth.

 

[S2k_Dude]

How does that work? Are you taxed regularly on the new car as well? If you are trading a car in for $20k and buying a new one that's $30k, are you only taxed on $10k? That doesn't make any sense to me.

EDIT: I thought about it some more, and I guess it could work in the same way that VAT or GST tax works in other countries. The tax gets passed along each time. In a sense, you paid the balance when you bought the first car.

In Colorado, we are just taxed on the new car price. It's VERY easy to sell a car here, and it makes no sense whatsoever to trade your car in (not saying it's not different in other states, just what it is here).

In GA, vehicle taxes were changed in 2012. Five years ago when you purchased a car, new or used from a dealer, you paid 6% sales tax and you paid an annual tax each time the car was registered, about $500-$600 on average for most new cars. As your car got older the tax would decrease to around $150 (as an example). The annual tax was called an Ad Valorem tax and you could deduct that tax each year from your state income tax. At that time you could buy a used car from a private party and only pay the Ad Valorem tax, no sales tax. Back then, dealers were at a disadvantage when it came to sales of used cars. The private part used car market was very active.

In 2011 the Dealers Association lobbied for a new bill. The new bill changed the way vehicles would be taxed in GA and would remove the advantage private parties had selling used cars. Ad Valorem was replaced with TVAT which was intially 6.5% (which can increase by 0.5% per year if the GA legislator decides they want more revenue) tax on any new or used vehicle, commercial or private party. The new tax removed the advantage of private party sellers. When it comes to a trade-in, the new bill kept the clause that only taxes the difference between a new car sale and the trade-in value of the old car. This was kept of course because it benefits new cars sales over private party sales.

The tax favors dealer sales over the previous system. However, in the old system, if you owned a car for more than 10 years, your overall tax on that vehicle would be higher since the tax is reoccurring and not a one time TVAT. Although we know, those owners are in the minority. On average, the majority of new car buyers keep a vehicle 3-5 years which drastically increased the tax base for the state of GA because in the new system, anytime a vehicle changed hands the state would again get 6.5% tax up front rather than a much lower annual tax over time.

Sorry for the long post about GA taxes, all states are different though, but as a person living in GA, I've seen first hand how the Dealers continue to screw buyers any way they can. By having the power to push through legislation that helps their business and increase the tax base for the state, it was easy for the Dealers Association to get the new bill passed. Not to mention, the person on the GA legistator who introduced the bill, is also the owner of several GA car dealerships.

 

[zroger73]

Are you taxed regularly on the new car as well?

If you are trading a car in for $20k and buying a new one that's $30k, are you only taxed on $10k?

No.

Yes.

For example, I traded a 2016 CR-V Touring for my 2017 Ridgeline RTL-E. The Ridgeline was $40K and the CR-V was worth $28K. I paid 6.25% sales tax on the $12K difference, which was about $750. If I sold the CR-V private party, I would have paid 6.25% on the $40K, which would have been about $2,500. I may have gotten $30K for the CR-V by selling it private party, but probably not since new they were $33K.

Another example, I traded a 2008 Infiniti G35 for a 2009 Honda Civic several years ago. The G35 was worth more than the Civic, so I paid no sales tax. Unfortunately, you don't get a tax refund in this case.

Having a lien against your trade doesn't affect the sales tax you pay - the payoff is added back at the end, so you don't pay tax on that.

Every situation is different. I trade often, so I'm always looking to minimize my out-of-pocket expenses for each transaction.

Annually, we pay about $70 in taxes and fees per vehicle whether it's a Ford Pinto or a Rolls Royce. We also have cheap gasoline, no state income tax, and don't pay sales tax on groceries. On the other hand, insurance is somewhat expensive and we pay some of the highest property tax rates in the nation. So, owning a vehicle is cheap in Texas, but owning a home is not.

 

[gtolio]

Another example, I traded a 2008 Infiniti G35 for a 2009 Honda Civic several years ago. The G35 was worth more than the Civic, so I paid no sales tax. Unfortunately, you don't get a tax refund in this case.

So, in this scenario, why didn't you sell the G35, rather than trading it in?

 

[zroger73]

So, in this scenario, why didn't you sell the G35, rather than trading it in?

It's been a while and I don't have the exact numbers handy, but I believe the Civic was around $20K. The G35 was worth about $30K on trade.

If I had bought the Civic without a trade, I would have paid $20K + $1,250 sales tax.

This was during The Great Recession at a time I was looking for a cheaper payment, a lower insurance premium, and better fuel economy as quickly as possible in case things got even worse. If I had not traded, I would have paid $1,250 in sales tax and would have continued to pay for insurance for two vehicles until the G35 sold - if it would even sell (remember: The Great Recession).

 

[gtolio]

It's been a while and I don't have the exact numbers handy, but I believe the Civic was around $20K. The G35 was worth about $30K on trade.

If I had bought the Civic without a trade, I would have paid $20K + $1,250 sales tax.

This was during The Great Recession at a time I was looking for a cheaper payment, a lower insurance premium, and better fuel economy as quickly as possible in case things got even worse. If I had not traded, I would have paid $1,250 in sales tax and would have continued to pay for insurance for two vehicles until the G35 sold - if it would even sell (remember: The Great Recession).

Ok, just curious. Thanks.

 

[beldredge]

@gtolio - here in Colorado, you will also only owe tax on the difference between the sale price of the new car and the trade-in value. So, depending on your specific tax rate and the value of the trade, it can certainly make a difference.

Just an FYI.

 

[gtolio]

@gtolio - here in Colorado, you will also only owe tax on the difference between the sale price of the new car and the trade-in value. So, depending on your specific tax rate and the value of the trade, it can certainly make a difference.

Just an FYI.

Yeah, I guess you're right. I buy and sell a lot of cars, but all but one (my EP3) have been used.

That sucks for me, because I'm keeping all of my other cars when I get the Type-R, and even if I wasn't, they're not worth enough to warrant trading them in (max is probably $8k on trade in - $10k on private party).

 

[Shankmeyster]

Please use PMs for the off topic stuff guys. This thread has already been threatened with the lock recently.

 

[SpraykwoN]

Dealer just reached out to me again about the black R they have had on their lot for over a week. Originally wanted $8K over sticker, now dropped it to $7K. Told them I want white but I'd do black for MSRP + TTL and a couple extras at cost. Waiting for a reply. Obviously they want the car moved.

 

[SchnellBBY]

Dealer just reached out to me again about the black R they have had on their lot for over a week. Originally wanted $8K over sticker, now dropped it to $7K. Told them I want white but I'd do black for MSRP + TTL and a couple extras at cost. Waiting for a reply. Obviously they want the car moved.

oh man, fingers crossed!

 

[SpraykwoN]

oh man, fingers crossed!

Haha once I hit his ass with the MSRP bomb, he didn't reply back. Guarantee that shit is still sitting there next week. It has been sitting since July so I am not shocked.

 

[SpraykwoN]

Other dealerships are sitting on cars as well in SoCal from what I am seeing.

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