At some point in the next 6 months, I hope, I’ll be selling my car. If I trade it in, and include useful items in the car, do they make it to the eventual owner?
I’ve only ever sold one car, and two motorcycles, and that has always been in person. I’ve always included whatever random stuff I have that goes with the vehicle. That might be stuff that came with it like the owners manual, but also other things, like a crush washer and O-ring for the oil plug, a shop manual, useful receipts, a service log, factory parts I replaced, etc. In person it’s easy. Here’s a box of stuff, I don’t care what you do with it, but it’s yours now.
But on a trade in, what will happen to a box of useful items? Does it make it through the wholesale process, to the used car dealer, and finally to the next owner? Or will it all just be in a dumpster five minutes after I sign away the title?
If any of the stuff had real value, I could sell it on it’s own, but most of it is stuff that is only valuable to the new owner. Just to be clear, it’s not trash, but things like the USB dock for the aftermarket MP3 player.
Don’t trade it in. Sell it on Craig’s list or a local Facebook selling site. You will make more money.
I bought a new vehicle in October. While they said it was worth $1,000 in a trade in, the dealer sales manager refused to take my trade in, saying they wouldn’t be able to make anything from it.
I sold it in six hours on a local Facebook selling page for $5,000, as is.
Yep, everybody always says that. The last bike I sold on Craigslist took three weeks to sell, and I ended up getting exactly the amount I would have gotten on trade + the tax reduction from the trade-in. So I was net nothing, and wasted lots of time. The car I sold also sat for weeks, and finally went for close to the blue book wholesale price. I write good ads with lots of pictures and such, but the vehicles are old and undesirable by the time I get rid of them.
The last bike was in great shape, but it was an R1150R, which nobody wants. If it had been an R1150GS it would have sold in a day.
Anyway, that’s a long way of saying, if they tell me they’ll give me $500 to take it off my hands the car is going on Craigslist, but if they offer me a few thousand, plus 8% sales tax saving, I’ll take it, because it’s not worth weeks of Craigslist flakes to get an extra $200.
I am not aware of anyplace that gives a sales tax reduction due to trading in a vehicle. They are not reducing the sale price of the vehicle, they are crediting your trade-in as a cash equivalent. If you’re getting tax savings by trading in a car, something shady is happening.
I am surprised at your experience, though. You must have very fair dealers because every experience I have had (and I am not a master negotiator or salesman) has been that I make at least $1k over what the dealer offers me by taking a week or so to sell on Craigslist or Autotrader. It does depend somewhat on the vehicle and the mileage and the time of year, but I’ve never had it be as close as a couple hundred dollars.
They’ll probably keep the owner’s manual and maybe the aftermarket radio parts, but the rest will probably be tossed. I left a box of stuff in the trunk of the car I just traded in but didn’t tell them about it so who knows if they even found it. The car sold within about a week.
I’m not sure if it’s true in all fifty states, but in Ohio, you get a sales tax reduction when buying a new car on your trade, as in, you only pay sales tax on the difference. If the new car is 20k and your trade is 10k, you only pay sales tax on 10k.
In Kentucky this is applicable on purchasing both new AND used cars if there’s a trade in.
I have the opposite experience. I put a box with stuff in the trunk including 9 qts of expensive synthetic motor oil, filter, and some other odds and ends. Several months later I realized I forgot to put the car cover (that came with the car) in. I found the new owner online and he came and picked it up. I asked if the box in the trunk had made it and he confirmed the dealer had given him everything.
I would tend to think most dealers will throw it away to avoid any potential hassles. If they include it with the sale, the new owner may blame the dealer if anything caused a problem. But you might as well include it with the car since you’ll likely have no use for it. Misc parts like that would be a hassle to try and sell and you wouldn’t get much money anyway.
That is the important part. Somebody will buy your car if it’s cheap enough, regardless of what it is, but that takes time and effort. If I could guarantee that I could get $500+ more, I’d spend an afternoon dealing with Craigslist stuff, but I can’t guarantee the $500 or just an afternoon. At some point, why bother?
KBB says my car’s private party value is $2-3000, so say I ask $3000. A buyer gets it inspected and takes off $1500 for the needed repairs, because that’s what it will cost me to fix the things I know are wrong. Maybe I hold out for a less astute buyer who ends up giving me $2500? Maybe it sits in front of the house for 6 months, too. Trade-in value is $700-1200. $1000 isn’t too far off from the $1200-1500 I think the car is actually worth.
The consensus seems to be, put the stuff in the car, and see what happens… I have nothing to lose, because it’s all stuff I would just throw away anyway.
KBB value doesn’t seem to sync up with craigslist value in my area. Check the prices for similar vehicles in the craiglists around your area to see what they are being listed for. Give more weight to the newer listings than the older ones. The older ones may be hanging around because they are priced too high.
Wow…that’s a serious load of bullshit. I am --of course-- in one of the states that doesn’t do it and I am glad, because car dealers already dick people over enough as it is, giving them a tax break for selling new and possibly used cars is just stupid. It’s yet another way for the well-off to avoid taxes that poorer people have to pay.
I think it’s done to avoid ‘double taxation’ because they are going to collect tax on the sale of that trade-in. So if they collect tax on the full purchase price of the car you are buying, including the trade-in value, and also collecting tax on the trade-in when they sell it that, to me, is ‘double taxation’.
Also in states like KY and IN, part of the registration process includes paying a different form of state tax based on a sliding scale year over year on the estimated value of your car. When I went to register my then new 2015 Buick Regal in Indiana, it cost me $520 the first year. Ouch.
Double taxation happens all the time. My money is taxed when I earn it, it’s taxed when I spend it on a car, it’s taxed when the dealer reports a profit, it’s taxed when the dealer uses some of it to pay an employee…
Anyway, here in Colorado I pay sales tax on the purchase price of a new vehicle, which is the price the dealer and I agree upon, decreased by the value we agreed upon for a trade-in. So, $20,000 car - $2,000 trade-in = $18,000 taxable.
I pay the sales tax of my home county and city, regardless of where the dealership is located. If the dealership gets it wrong, the home county knows, and will require paying the difference.
Used vehicles are taxed at a book value, not the actual sale price, so you can’t write up a bill of sale for $1 or whatever.
There is the concept of family transfer, so the most recent vehicle I received as a hand-me-down did not have any sales tax, just title and license fees.
Anyway, these tax rules seem fairly sane to me, as I accept that taxation is a legitimate role of the government. I can see the trade-in tax reduction going either way though, and I would not be surprised at all if it was pushed by a dealership lobby. It doesn’t seem particularly unfair as far as sales taxes go (some cities around here tax groceries).
Where is this uncommon? Anywhere I’ve ever lived groceries are subject to sales tax, just like anything else you buy. Maybe in like, Nevada, or something?
Edit: Wait…do you mean cities tacking on an additional tax over and beyond the state sales tax percentage? That’s…pretty shitty.