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Private Sale vs Trade in
Posted on 6/25/15 at 9:32 am
Posted on 6/25/15 at 9:32 am
Say I can sell my truck privately for 2,000 to 3,000 more than a dealership would offer me on a trade in. Should I go that route.
My questions are mainly about taxes. the truck is paid off. Would i have to pay taxes on the sale of the truck if im rolling all of the money into a new truck? Also, if i trade in, isnt the tax only calculated on the difference on the trade in and the new truck. so if i sell private, i have to pay taxes on full cost of the new truck?
Thanks for the help in advance
My questions are mainly about taxes. the truck is paid off. Would i have to pay taxes on the sale of the truck if im rolling all of the money into a new truck? Also, if i trade in, isnt the tax only calculated on the difference on the trade in and the new truck. so if i sell private, i have to pay taxes on full cost of the new truck?
Thanks for the help in advance
This post was edited on 6/25/15 at 9:33 am
5
Posted on 6/25/15 at 9:39 am to Happygilmore
quote:
Also, if i trade in, isnt the tax only calculated on the difference on the trade in and the new truck. so if i sell private, i have to pay taxes on full cost of the new truck?
This is correct. We would have to know the trade in value of your vehicle and the sales tax rate in your area in order to see if you could make up or the 2000-3000 price difference between trading in vs private sale.
Posted on 6/25/15 at 9:43 am to MikeBRLA
I considered the same things and ended up trading in...so much easier and I didn't have to worry about getting fake $100 bills.
Posted on 6/25/15 at 9:45 am to Happygilmore
selling a car used to a private seller is a fricking pain in the arse. Get ready for a 1000 inquiries, and 75% no shows. Then you will get offers like - I will buy your truck and pay you with massages, is that cool?
Posted on 6/25/15 at 9:52 am to Hawkeye95
I disagree about private sale being a pain...I guess it depends on where you live. In my semi-rural area, it's easy as pie to sell a vehicle in decent condition. Never encountered any weirdos or freaks or counterfeit money....but I live in a place where you actually know people. YMMV. Sold two in the last year via private sale & got twice what the dealer trade would have been. Dealer trade, esp on older vehicles, is terrible. But college kids, single moms, high schoolers always need & want decent, clean used cars in the under $4K range.
Posted on 6/25/15 at 10:00 am to Hawkeye95
quote:
selling a car used to a private seller is a fricking pain in the arse. Get ready for a 1000 inquiries, and 75% no shows. Then you will get offers like - I will buy your truck and pay you with massages, is that cool?
I wholeheartedly disagree. I've had more scammers contact me when I was selling an iphone on craigslist than with the two cars I've sold. If you want to sell a car privately you have to use craigslist. Parking it on a busy street doesn't work anymore. If you want to actually sell the car quickly on craigslist you need a good description - you won't believe how rare this is - good pictures, and a fair price.
I sold my wife's old Passat in less than 20 minutes for $400 less than my asking price - everyone wants to negotiate - all through text message. It couldn't have been easier. The dealer offered me $2500, I sold it for $5100 to an oilfield worker who drove a nicer truck than me but just wanted a cheap commuter car.
This post was edited on 6/25/15 at 10:04 am
Posted on 6/25/15 at 10:05 am to Happygilmore
Split the difference and sell to carmax. I have heard nothing but great things from people who sold their cars to carmax.
Posted on 6/25/15 at 10:16 am to GaryMyMan
Selling a car yourself is hit or miss. I've had both good luck, and I've had it be a PITA. My theory is it depends on the type and condition of the car. The shittier the type and condition, the bigger the PITA it is. Unless it's a pick up truck. Those things are easy as hell to sell private.
Posted on 6/25/15 at 10:19 am to MikeBRLA
quote:
We would have to know the trade in value of your vehicle and the sales tax rate in your area
2008 4 Door Sierra (white) 118,000 mileage. (not 4x4)
I think I could get around 15-16 privately, but my best guess would be around 12 for a trade in.
Lafayette is 8%
This post was edited on 6/25/15 at 10:20 am
Posted on 6/25/15 at 11:19 am to Happygilmore
quote:
I think I could get around 15-16 privately, but my best guess would be around 12 for a trade in.
Lafayette is 8%
Well, start with firm numbers. Carmax is always a good place to start since it's a quick, easy floor number. You can always sell it to them for that price.
Trade in is part of the negotiation on a new vehicle. Depending on the price you get on your replacement, trade may be good or bad. This can easily swing the value you can get for a trade. Basically, how good of a negotiator are you?
Sales tax will play as you can basically add 8% to the trade in value as the amount you save in taxes. Can you private sell for 8% more than trade?
Also, you can do both. If a private seller is willing to do the paperwork at the dealer, and legally pay all required taxes, you will still get the full tax credit. You set the sale price, they handle paperwork for both deals, everyone wins.
Posted on 6/25/15 at 11:30 am to LSUtigerME
CarMax offered me 1500 less than trade in value on the car I got appraised. I ended up selling it myself for about 3500 more than what CarMax offered. I think if it's a vehicle worth a good bit, the tax saving and less hassle will be worth trading it in. The cheaper vehicles, I generally try to sell outright.
Posted on 6/25/15 at 12:48 pm to LSU1018
That is interesting. Up here in KC, Carmax has been paying WELL over trade-in values for good, solid cars.
Posted on 6/25/15 at 3:06 pm to Happygilmore
quote:
lso, if i trade in, isnt the tax only calculated on the difference on the trade in and the new truck. so if i sell private, i have to pay taxes on full cost of the new truck?
Yes, that is (besides not dealing with tire kickers) the advantage of trading the vehicle in, vs selling. That could easily be off-set by how much less a dealership is willing to offer you for the truck.
Posted on 6/26/15 at 9:12 am to Happygilmore
I've never done it but had a dealership offer to do an "in and out" deal at their dealership. The way they explained it to me was that I would sell the car private party but do the transaction at the dealership and they would handle all the paperwork. I didn't do it so I have no clue how legit this is. It may be something worth checking into though.
Posted on 6/26/15 at 9:36 am to lynxcat
quote:
I considered the same things and ended up trading in...so much easier and I didn't have to worry about getting fake $100 bills.
This. If you negotiate well with the dealer, I think you can get within $500-1000 of private sale value, and it takes the hassle away completely.
Posted on 6/26/15 at 9:52 am to JonTheTigerFan
quote:
I've never done it but had a dealership offer to do an "in and out" deal at their dealership. The way they explained it to me was that I would sell the car private party but do the transaction at the dealership and they would handle all the paperwork. I didn't do it so I have no clue how legit this is. It may be something worth checking into though.
I've done it. It was easy, the biggest obstacle here is the fact that you have to have someone willing to buy your car and already know what car you want to buy at the same time.
Posted on 6/26/15 at 10:58 am to Happygilmore
quote:I know every dealership is different but my uncle was buying a new Tahoe and he agreed his old truck to me for whatever they offer for trade in. 2006 4 door Sierra 1500 with only 50k miles (basically the same truck but 2 years older but half the miles). They offered him only $5,000 for it.
2008 4 Door Sierra (white) 118,000 mileage. (not 4x4) I think I could get around 15-16 privately, but my best guess would be around 12 for a trade in.
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