States That Allow Trade-in Tax Credit
For example, if your new car costs $20,000 and you have a trade-in worth $5,000, then you only have to pay sales tax on $15,000. If your sales tax rate is 10%, you're looking at savings of $500 in this particular case.
The following states currently allow a tax credit on your trade-in as of January 2011:
* The Potential Savings is based on a trade-in worth $5,000
|State||Maximum Tax Rate||Potential Savings *|
The only states that DO NOT currently give a tax credit as of January 2011 are:
District of Columbia
If you live in one of these states, you have more incentive to sell your car to a private party.
My Recommendation for Car ShoppersTrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid