consumers do not realize that states often offer a tax credit when they
trade in vehicle. For example, if you purchased a $30,000 vehicle in a
state with a 6% sales tax and you did NOT have a trade-in, the sales
tax would be $1,800 ($30,000 x 6%).
If the state allowed for a tax credit for
trade-in's AND you traded in a used vehicle worth $14,000
against this $30,000 vehicle, your tax liability would be
calculated like this:
$30,000 Price of new vehicle
- $14,000 Value of trade-in
= $16,000 Price used to calculate sales tax
The 6% tax would then
be calculated on the $16,000 and NOT the full $30,000! This
means you would pay $960 in tax instead of paying $1800. A savings for you of $840!
Wondering what YOUR trade-in is really worth? Check the Galves
value! As always, we offer the Galves Money Back Guarantee so you have nothing to lose and lots
It's particularly important to consider the sales tax credit if you are thinking of selling your car privately.
In the above example, you would have had to sell your vehicle for $14,960 just to "break even." If you factor in
the expense of advertising the vehicle and the value of your own time, your break even point becomes even higher.
If you didn't sell the vehicle for at least $15,000, you would in essence be losing money by selling it yourself.
By trading the vehicle in, you can avoid the hassle of selling it yourself AND you could pay less tax… a real "win-win"
situation if ever there was one!
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