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Questions re: "in and out" vehicle purchase
Posted on 1/25/16 at 4:52 pm
Posted on 1/25/16 at 4:52 pm
Can someone explain the pros and cons for the buyer, seller and dealership of doing an "in-and-out" to purchase a used vehicle?
I'm the buyer FWIW and this is the only option to purchase the vehicle bc the current owner (business) would have to pay income taxes on a direct sale.
TIA
I'm the buyer FWIW and this is the only option to purchase the vehicle bc the current owner (business) would have to pay income taxes on a direct sale.
TIA
Posted on 1/25/16 at 5:37 pm to Golfer2012
In Louisiana the seller gets tax credit for his trade by doing an in and out. If he sold you his car directly to you he wouldn't get credit for it. He would pay tax on the full price of his 'new' car vs only paying tax on the difference between the 'new' car sales price and the trade amount. This only works if he is trading in a car and buying another. The dealer benefits bc they get the sale of the 'new' car and also immediately get rid of the traded in unit, which they might have sent to auction and take a loss on.
Posted on 1/25/16 at 5:39 pm to MikeBRLA
Exactly right. Its all about tax credit. The dealership is required to charge a fee for the service. Its usually $200 paid by the party purchasing the "new" car from the dealership.
Posted on 1/25/16 at 8:57 pm to xrockfordf150x
Thanks guys. So other than the "service" fee and sales tax, the dealership should sale the vehicle for trade-in value, right?
Also, is there an official name for this type of transaction b/c Google doesn't come up with anything on the subject
Also, is there an official name for this type of transaction b/c Google doesn't come up with anything on the subject
Posted on 1/25/16 at 9:03 pm to Golfer2012
In and out or maybe dealer trade is what I've heard it called
Usually the dealer doesn't make anything other than the fee they charge on the used trade in
I've always wondered if I could do an in and out if I were to set the price, assuming I already had a buyer in line to pay what I was asking.
Usually the dealer doesn't make anything other than the fee they charge on the used trade in
I've always wondered if I could do an in and out if I were to set the price, assuming I already had a buyer in line to pay what I was asking.
Posted on 1/25/16 at 10:26 pm to Croacka
That's basically what I'm trying to do but I don't want the dealer trying to add-on all kind of extra "fees" because the vehicle is worth more than the trade-in.
I've already agreed on a price with the current owner of the vehicle -- it just can't be sold directly to me b/c it's business owned and the business would have to recognize income on the sale whereas if it's just traded-in then no tax consequences for the business.
I've already agreed on a price with the current owner of the vehicle -- it just can't be sold directly to me b/c it's business owned and the business would have to recognize income on the sale whereas if it's just traded-in then no tax consequences for the business.
Posted on 1/25/16 at 10:30 pm to Golfer2012
At my dealership, everyone knows what an 'in & out sale' is. We charge a small fee, but its not a time consuming process and not usually a problem. And yes, whatever the amount the vehicle was traded in for, that is what the 'buyer' pays for vehicle, regardless of value. GL
Posted on 1/25/16 at 10:52 pm to CoachRobertson
@coach
If a dealer offered me 17K for a trade in, but I found someone to pay let's say 18.5K for it, would the dealer do that, or do they set the maximum transaction price?
I guess there only risk is a paperwork mistake which may lead to them owning the used car when they paid more than they normally would for it.
If a dealer offered me 17K for a trade in, but I found someone to pay let's say 18.5K for it, would the dealer do that, or do they set the maximum transaction price?
I guess there only risk is a paperwork mistake which may lead to them owning the used car when they paid more than they normally would for it.
Posted on 1/26/16 at 6:06 am to Croacka
You can sell your car for however much you want, so for $18,500.00. That's the benefit of the in and out- you get to pick your sales price of your trade in plus you get the tax credit which increases as you increase the sales price of your trade.
Posted on 1/26/16 at 8:59 am to bthomp1
I love these deals because majority of the time the two parties are still negotiating when its time to do paperwork. Its nice to see both looks on their faces from the other point of view for a change.
Posted on 1/26/16 at 5:33 pm to Croacka
quote:
dealer trade
In the auto business a dealer trade is when one new car dealer trades cars with another dealer of the same manufacturer. This is usually done bc they have a buyer that wants a specific option/color but the dealer doesn't have it in stock, so they find a dealer with that option, and trade units.
Dealer trades and "in and outs" are two completely different animals.
This post was edited on 1/26/16 at 5:35 pm
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