Here in Texas, one advantage to trade-in is that you only pay sales tax on the net amount (new car price less trade-in value offered).
Anybody know if it is the same I'm Louisiana?
I'm not sure about trade-ins, but I'm pretty sure if you were to sell your used vehicle for cash to a private party, you would only pay tax if you actually "made" money on the sale....as in you sold it for more than the book value.
IE: You're car is worth $5000 and you sell it for $6000. You would pay tax on $1000, since technically you only "earned" a grand.
This post was edited on 2/25 at 3:34 pm