Payoff with sales tax ???? Help !!!

[Enzoyama_]

I have a 2015 m4 and was interested in trading it in.
I went online and got a payoff and it included sales tax.

Balance = 72,188.74
Sales/Use tax= 3,878.19

Total lease payoff = 76,066.93

So if I trade in this car to a dealer do they pay the balance or total payoff ?? I'm in New York state. What if I go out of state ??

Is the dealer payoff 72,188.74 ??
Or they have to pay off 76,066.93 ?
I get the part where my car isn't worth either

Let's say I get 67k for my trade , am i 5k upside down or 9k upside down

Help please !!!

[Labeef]

Originally Posted by Enzoyama_

I have a 2015 m4 and was interested in trading it in.
I went online and got a payoff and it included sales tax.

Balance = 72,188.74
Sales/Use tax= 3,878.19

Total lease payoff = 76,066.93

So if I trade in this car to a dealer do they pay the balance or total payoff ?? I'm in New York state. What if I go out of state ??

Help please !!!

Yes and No. The issue is, you owe more than the car is worth. You'll have to roll over the remainder of the value into you next car. For example, lets say they give you $70k and you owe 76, the remaining 6k will be added to your next loan. In addition, the dealer is a business, they need to make money on the trade, expect a 15-20% hit from retail value. Unless your trading in for a 750il or another car that the dealer is having a tough time selling, you're going to be upside down.

[tek818]

Originally Posted by Enzoyama_

I have a 2015 m4 and was interested in trading it in.
I went online and got a payoff and it included sales tax.

Balance = 72,188.74
Sales/Use tax= 3,878.19

Total lease payoff = 76,066.93

So if I trade in this car to a dealer do they pay the balance or total payoff ?? I'm in New York state. What if I go out of state ??

Help please !!!

Sorry to be the bearer of bad news, you but you won't get close to either. Depending on what you are getting as a replacement and your relationship with the dealer, you may get bent over...

[Enzoyama_]

Originally Posted by Labeef

Yes and No. The issue is, you owe more than the car is worth. You'll have to roll over the remainder of the value into you next car. For example, lets say they give you $70k and you owe 76, the remaining 6k will be added to your next loan. In addition, the dealer is a business, they need to make money on the trade, expect a 15-20% hit from retail value. Unless your trading in for a 750il or another car that the dealer is having a tough time selling, you're going to be upside down.

I get the upside down part. But if I trade to a dealer is it 72k or 76k as my payoff.

[drexplode]

Dealers don't pay sales tax, end of story. Subtract it from your payoff.

[Labeef]

Originally Posted by Enzoyama_

I get the upside down part. But if I trade to a dealer is it 72k or 76k as my payoff.

It really doesn't matter because it's in the total pay off.

[saxon]

Originally Posted by drexplode

Dealers don't pay sales tax, end of story. Subtract it from your payoff.

you're giving bad advice

OP- if you want to trade it in, you will be required to pay the sales tax on the remaining balance of the vehicle (its like you're buying it out) but you will also get the sales tax as a trade in towards the new vehicle

[drexplode]

Originally Posted by saxon

you're giving bad advice

OP- if you want to trade it in, you will be required to pay the sales tax on the remaining balance of the vehicle (its like you're buying it out) but you will also get the sales tax as a trade in towards the new vehicle

incorrect. just traded in a lease to CarMax, sales tax was removed from payoff. CarMax is a dealer. All dealers don't pay sales tax because their buying volume is > a specific amount.

[48Laws]

After they low ball you on a virtually new car, who pays sales tax will be the least of your worries.

[Enzoyama_]

Originally Posted by 48Laws

After they low ball you on a virtually new car, who pays sales tax will be the least of your worries.

4k is still 4k . I get the part that I'm losing money. I would rather lose less.

[48Laws]

You have confirmation they'll pay your entire payoff or auction value of the M4?

[luv135i]

They charge yall sales tax on trading in cars in NY?

[DocWeatherington]

Originally Posted by Enzoyama_

I have a 2015 m4 and was interested in trading it in.
I went online and got a payoff and it included sales tax.

Balance = 72,188.74
Sales/Use tax= 3,878.19

Total lease payoff = 76,066.93

So if I trade in this car to a dealer do they pay the balance or total payoff ?? I'm in New York state. What if I go out of state ??

Is the dealer payoff 72,188.74 ??
Or they have to pay off 76,066.93 ?
I get the part where my car isn't worth either

Let's say I get 67k for my trade , am i 5k upside down or 9k upside down

Help please !!!

Bigger question is, what are you getting?

[Miamiboyca]

Originally Posted by Enzoyama_

I have a 2015 m4 and was interested in trading it in.
I went online and got a payoff and it included sales tax.

Balance = 72,188.74
Sales/Use tax= 3,878.19

Total lease payoff = 76,066.93

So if I trade in this car to a dealer do they pay the balance or total payoff ?? I'm in New York state. What if I go out of state ??

Is the dealer payoff 72,188.74 ??
Or they have to pay off 76,066.93 ?
I get the part where my car isn't worth either

Let's say I get 67k for my trade , am i 5k upside down or 9k upside down

Help please !!!

On a purchase -
If you sell the car to a dealer or a private person you still owe the taxes to NY because you have not paid them yet. If you trade it in you still have to pay them but you get the credit towards the next car.

On a lease (depending on your state) if the tax is tied to the payment then you will only be responsible to the "used" portion of the car which includes the upside portion. (6K upside down, then taxes on 6K are due)

If you rolled the taxes into the lease to avoid paying them up front, then its just like a purchase and you owe taxes on the whole thing.

If you want to get rid of your lease, your better off with a swapalease or lease trader. Even if you give a 2K-4K incentive you would still be better off.

Good luck

[pikkagtr]

well in CA, you only pay sales tax on the difference if you trade in a car
ie:
trade in value 50k
new car purchase 45k
sales tax is only on the 5k difference

[BwoodBMW]

Originally Posted by pikkagtr

well in CA, you only pay sales tax on the difference if you trade in a car
ie:
trade in value 50k
new car purchase 45k
sales tax is only on the 5k difference

This is not true in CA... However it is in Utah... I'm not 100% sure of any other state.

[pikkagtr]

Originally Posted by BwoodBMW

This is not true in CA... However it is in Utah... I'm not 100% sure of any other state.

are you 100% sure?
my GF just traded in her 2006 evo 9 for 21K and bought the new subaru forester for 24.5k and only paid the difference.
it was 3825$ + title/lic and dealer prep fees, $4290 OTD

[guarnibl]

Originally Posted by pikkagtr

are you 100% sure?
my GF just traded in her 2006 evo 9 for 21K and bought the new subaru forester for 24.5k and only paid the difference.
it was 3825$ + title/lic and dealer prep fees, $4290 OTD

This is also true in AZ

[Miamiboyca]

The problem is he asked two questions, and everyone is only giving 1 answer.

In a trade you pay taxes on the difference between the car you trade in and the car you get. It seems however that you did not pay taxes on the original car so you would have to pay taxes like you started from zero but also pay taxes on the upside down difference.

If you sell it to a dealer - he wont pay taxes which means you will still have a tax bill.

[RonnyK]

Originally Posted by Miamiboyca

The problem is he asked two questions, and everyone is only giving 1 answer.

In a trade you pay taxes on the difference between the car you trade in and the car you get. It seems however that you did not pay taxes on the original car so you would have to pay taxes like you started from zero but also pay taxes on the upside down difference.

If you sell it to a dealer - he wont pay taxes which means you will still have a tax bill.

Agreed. Put slightly differently, the payoff is for the OP (regardless of whether the source of that money is a dealer paying it on OP's behalf) and this is a taxable transaction.

[acechardukian]

Originally Posted by guarnibl

This is also true in AZ

This is true in TX as well. I've done it 3 times in the last 2 years lol

[BwoodBMW]

Originally Posted by pikkagtr

are you 100% sure?
my GF just traded in her 2006 evo 9 for 21K and bought the new subaru forester for 24.5k and only paid the difference.
it was 3825$ + title/lic and dealer prep fees, $4290 OTD

In CA my understanding was that they changed the law a few years ago to close that "loophole"... I know the last two BMW dealers I've worked with in SoCal would not give you the benefit of the tradein reducing your sales tax. The best they can do is shift dollars slightly by giving you less for your trade-in and knocking that same difference off the sale price.

ie if this were reality:
Trade In value = 10k
New Car Price= 20k
Sales Tax due (@10%) = $2k
Out the door price = $12k

A good negotiator would work this deal with the same reality to keep the dealer whole and pay a bit less out the door:

Trade in Value: $8k
New Car Price: $18k
Sales Tax due: $1.8k
Out the door price: $11.8k
(Dealer makes the same profit of $10k, you pay slightly less in taxes)

Did the GF work this deal with a franchise dealer or independent? I'm 99% sure that there is no way around this in CA anymore.