Hopefully purchasing soon - questions on taxes

[Mossyoakglock]

So me and my wife are looking to purchase a 2014 Trail Premium in white here in the next month but had a question on taxes.

We live in Tennessee but the closest white Trail Premium is in Indiana. The last vehicle I purchased (before we were even dating) was purchased locally so I didn't have to worry about any of the out-of-state stuff.

If we purchasing the vehicle at the dealer in Indiana, will I pay the sales tax in Indiana or would I pay the sales tax in TN when I bring it home to register it?

MSRP on the 4runner is $41,005 with a sale price of $39,362, would I also need to account for the 7% Indiana sales tax and pay it when we sign (for a total of roughly $42,117) or would I need to pay the 7% TN tax when I register it? I'm hoping I can get them down some on the price but I'm just using the numbers provided from the dealer's website.

We are going to be financing through a credit union here so we won't be financing through TFS. We can get a 1% rate through the credit union. Since we are purchasing out of state, would it be better to negotiate the price with the dealer first and then go to the credit union for the loan so we know how much to get?

Sorry for all the questions but just not sure on all the technicalities when purchasing a vehicle out of state.

 

[Ruff]

Based on my experience,
You should pay the sales tax of the state where you will be registering the vehicle. In Texas you have to provide inspection certificate, proof of insurance, out of state title (or bill of sales), etc. You will have to pay registration fee, title fee pay sales tax and some other BS fees. Look up your states DMV website. It will have all required information.
You should give the credit unit a price not to exceed. You will be pre-approved based on that number. They understand that dealers have different “fees” and upgrades for vehicles. So, most of the time the person buying the car will not know the final price until it’s time to sign. The dealer should get in contact with the credit union and provide them with all required info.

 

[Mossyoakglock]

That's what I thought but wanted to make sure. Now on to the question of the loan. Here is my scenario.

Here is what I'm starting out with (these are just estimates).
$40,000 loan amount with $8,000 down = $32,000 loan with start date of 9/30/2014.
First scenario - 1% for 48mo equals a $680 monthly payment with a payoff date of 9/30/2018
Second scenario - 0% for 72mo equals a $445 monthly payment with a payoff date of 9/30/2020, if we add $200 a month to this payment to roughly equal the first payment, the payoff date goes to 11/30/2018.

So based on that it doesn't really matter which rate/term length I go with, correct? We end up paying roughly the same per month with almost the same payoff date. I know we will be paying interest on the 1% loan but when it is all said and done we are out the same $600+ a month regardless.

Is that correct (it's been a few years since I've done any financial calculations and that was when I was in school)?

 

[chmura]

Usually dealers have a document that they look up and see if the state you are buying in and the state where you are registering have an agreement with each other. I forgot the name of this document. Sales guy showed me it and it has all states listed in there.

I bought a car in Illinois and I paid illinois tax at the time when I purchased from the Toyota Dealership in IL.

When I got back to California I had to pay the difference in tax (CA tax is higher than IL tax) when I registered the vehicle.

 

[Mossyoakglock]

From what I've found online, both Indiana and Tennessee have a sales tax of 7%.

So if we agree to a price of $39,000 would that be the out-the-door price/price we pay the dealer since we wouldn't have to worry about sales tax?

 

[Martinjmpr]

I'll bet you could just call the sales office and ask them how they do it. Sales across state lines are not that unusual. My guess is that they have a way of charging you the sales tax for your state of residence (this allows you to roll the sales tax into the financing) and then just send that paperwork to your state.

Either that or they charge the sales tax of the state where you're buying it in and then that state sends your sales tax to the state where it will be registered, and if there's any difference, you'd have to settle that separately from the financing.

 

[Mossyoakglock]

If we come to a deal I'll ask that for sure. One this is is that we are not financing through the dealer. We are going through a credit union so it's not as easy for the dealer to roll it into the loan.

I would rather have the two separate anyways. Pay for the vehicle and then pay the sales tax in TN when I title/register the car.

 

[chmura]

From what I've found online, both Indiana and Tennessee have a sales tax of 7%.

So if we agree to a price of $39,000 would that be the out-the-door price/price we pay the dealer since we wouldn't have to worry about sales tax?

If both states are 7% tax than just pay tax at the dealer when you purchase.

If you paid tax in either state, you just show them the purchase document when you register the vehicle in your state. There is no way you can get taxed 2 times.

Just purchase the vehicle, pay tax at the dealer, register the vehicle in your state, show them you paid tax. That's it. Pretty simple.

 

[drahthunter]

Save yourself 7% & inspections if you live in one of the counties that charge yearly fees for that & price of tags per year is getting higher too.

Set up a montana corporation you title tag you truck in montana. it's easy I did it on my phone in the dealership.
You now will drive a "fleet vehicle" of your company in montana. Legal & no sales tax on cars now every car I own has montana plates on it now. No inspections tags are cheep.
Just have the dealer send your paperwork to dmv in Montana you registered agent will handle the rest.

 

[ARC]

Save yourself 7% & inspections if you live in one of the counties that charge yearly fees for that & price of tags per year is getting higher too.

Set up a montana corporation you title tag you truck in montana. it's easy I did it on my phone in the dealership.
You now will drive a "fleet vehicle" of your company in montana. Legal & no sales tax on cars now every car I own has montana plates on it now. No inspections tags are cheep.
Just have the dealer send your paperwork to dmv in Montana you registered agent will handle the rest.

Not legal in many states.

 

[NoDak]

just be careful on paying taxes in a reciprocating state. if the state your paying taxes is higher than the state your are living in, you wont get the difference back.

7% in the state you bought it, 5% in the state your registering. that 2% is money in the wind.