How much do you think I can sell my 4runner for?

[JohnJerk]

I didn't have to when I sold my motorcycle a few years ago. Also, I had to pay sales tax on the full value of the 4runner when I bought it. Even though I traded another car in for it. Because I thought about the same thing when I bought it.

You don't pay sales tax when you sell, only when you buy. I haven't lived in a state that didn't credit your sales tax on the value of the trade, so if that is the case, you may be better off with private party sale...but dealing with the public driving your car gets old really fast (worth at a grand to avoid that easily IMO).

Make sure your state doesn't give tax break on the trade before giving up on the issue. We're taxed at 7+% or so over here, so trading put $2,000 on my side of the table.

 

[philsey]

All states vary. Check your state for details. Here in WV we have to pay just like Quintin said - the delta on difference between trade and new or in the case of selling it outright we have to pay sales tax on the full amount.

Do I read this correctly ... in that if you sell your used vehicle to me, and then you have to pay state retail tax on that sale ?????

Never heard of that .... that blows. Car dealers in your state don't have much of a lobby ... private sales NOT being taxed is a major incentive for a buyer TO trade, ala Quentin's example.

 

[Jtraskell]

Do I read this correctly ... in that if you sell your used vehicle to me, and then you have to pay state retail tax on that sale ?????

Never heard of that .... that blows. Car dealers in your state don't have much of a lobby ... private sales NOT being taxed is a major incentive for a buyer TO trade, ala Quentin's example.

I think he ment "buying" it outright. No trade. But I could be wrong.

 

[Quentin]

Do I read this correctly ... in that if you sell your used vehicle to me, and then you have to pay state retail tax on that sale ?????

Never heard of that .... that blows. Car dealers in your state don't have much of a lobby ... private sales NOT being taxed is a major incentive for a buyer TO trade, ala Quentin's example.

You misunderstand. The buyer pays the sales tax. If you buy privately, you pay the sales tax on the full amount of the car. If you buy from a dealer, with a trade in, you subtract the value of the trade-in from the value of the new purchase and you are taxed on that amount. If you sell privately, you don't get to reduce your taxable amount when you buy a replacement vehicle.

Little story:
My wife and I had an '07 GTI and an '05 MINI between us. We wanted a 4WD vehicle that was bigger for our camping, winter driving, and such. We bought our 4Runner for $32k as a 3rd vehicle. We paid 5% ($1600) tax on the 4Runner. In West Virginia, any vehicle you own on July 1 of that year, you pay personal property tax the following year. On July 1, 2010 we had all 3 vehicles. Well, the GTI starts having all sorts of problems, is out of warranty, and has ridiculously high insurance premiums. I decide to ditch it in August and just daily drive the 4Runner. Plus, the $15,500 I got for the GTI could go toward my house. Good financial decision, right? Tax time comes around this year and I have to pay $250 on the GTI that I only owned half of '10. If I had traded my GTI on the 4Runner when I purchased, instead of holding on to it for another 4 months, I'd have only paid $825 in sales tax and I would have avoided the $250 personal property tax.

The real kicker is that my insurance rates weren't dramatically reduced on any of my vehicles when I had all 3. The MINI was $800/year, GTI was $1000/year, and the 4Runner was $650/year. When I sold the GTI, the MINI rate stayed the same and the 4Runner went to $660/year. Even though my GTI regularly got 31mpg versus the 22mpg of my 4Runner, the cost per mile is wayyy lower on the 4Runner because of the expensive maintenance, premium fuel, and high insurance cost of the GTI. The stupid rules of this state make it cheaper to daily drive an inefficient SUV than having a reasonably new, fuel efficient commuter along with your SUV.

 

[gwcpa]

No trade credit in VA. 3% of gross sales price before rebates or trades plus dealer processing fee. Buy a 35K vehicle, tax is $1,050.

Trade in your 2011 SR5 for a 35K 2012 and get 30K trade-in, pay $1,050, not $150. :redbrick:

 

[JohnJerk]

No trade credit in VA. 3% of gross sales price before rebates or trades plus dealer processing fee. Buy a 35K vehicle, tax is $1,050.

Trade in your 2011 SR5 for a 35K 2012 and get 30K trade-in, pay $1,050, not $150. :redbrick:

I'd say that is a pretty fair appoach. Here we pay 7.5% on purchase price or on the delta (new-trade) if there is a trade. The delta approach definitely advantages dealers at the tax payers expense (revenue aribitrarily left on the table by the state gov).

 

[reds10]

i don't know the Oklahoma law but in Arkansas you get the credit for selling to private party or dealer as long as you repurchase within 45 days of selling yours.

You only pay sales tax on the delta between the new car price and what you traded your car. If you sell private party, you will pay sales tax on the full new car price.

Trade-in

New car: $35000
Trade-in: $30000
Sales tax: 0.05*($35000-$30000) = 0.05*($5000) = $250

Private sale

New car: $35000
Sales tax: 0.05*($35000) = $1,750

(note: I've done the calculations for WV as an example.)