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California tax benefit for trade-in - what's the %?

rroonnbb

Member
Mar 30, 2013
19
39
hermosa beach, ca
Trying to decide on whether I trade in my 2012 ModelS (when I take delivery of the Y) or just sell it to Carmax or something.

I've also seen the discussions on Tesla potentially matching Carmax offers for trade-in value so I'll be attempting that.

But wanted to make sure I understand the tax implications (in CA) for doing a trade-in of the old car to Tesla. It basically changes the tax you pay on the transaction to be (CA Tax %)*(NewCarPrice-TradeInPrice) yes? And what's the CA tax number? Just the regular 7.5%? Do you also potentially get hit with any city/local taxes? (I'll be pickiing up in Marina Del Rey, CA).
 

Watts_Up

Active Member
Mar 4, 2019
3,712
2,691
In a galaxy far, far away
There is no tax benefit for trading your car in.

Sales and use taxes in California
Vehicle purchases are taxed based on the city and county in which the purchaser registers the vehicle,
and not on the county in which the vehicle is purchased.​

California statewide sales tax on new & used vehicles is 7.25%. (Plus additional county sales taxes)


But wanted to make sure I understand the tax implications (in CA) for doing a trade-in of the old car to Tesla.

It basically changes the tax you pay on the transaction to be

(CA Tax %)*(NewCarPrice-TradeInPrice) yes?

And what's the CA tax number?

Just the regular 7.5%? Do you also potentially get hit with any city/local taxes?

I'll be pickiing up in Marina Del Rey, CA).

I don't believe that you formula can be applied in California.

You will pay the CA Sales taxes based on your new FULL car value.

The used car owner will then pay the CA Sales taxes based on the vehicle's market value (unless this is a gift or inheritance)
 

cwerdna

Active Member
Jul 11, 2012
3,693
2,763
SF Bay Area, CA
There is no tax benefit for trading your car in.
Correct. Trading in a car does NOT help on sales tax for purchase of a new car in California.

What New Car Fees Should You Pay? | Edmunds has a table showing the states where it helps and doesn't help. Since I grew up in CA, I never even heard of it helping until I moved to WA. I don't live in WA any longer.
 
  • Informative
Reactions: RoBoRaT

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Nov 28, 2018
10,827
12,560
Riverside Co. CA
Trying to decide on whether I trade in my 2012 ModelS (when I take delivery of the Y) or just sell it to Carmax or something.

I've also seen the discussions on Tesla potentially matching Carmax offers for trade-in value so I'll be attempting that.

But wanted to make sure I understand the tax implications (in CA) for doing a trade-in of the old car to Tesla. It basically changes the tax you pay on the transaction to be (CA Tax %)*(NewCarPrice-TradeInPrice) yes? And what's the CA tax number? Just the regular 7.5%? Do you also potentially get hit with any city/local taxes? (I'll be pickiing up in Marina Del Rey, CA).

You must have just got to california recently, or never purchased a car here. As others stated, you pay the local tax rate of where YOU live, not where the car is picked up. You do not pay "7.25%" you pay the same tax rate you pay on every other taxable good, which the link someone posted shows as 9.5%. You are not avoiding that tax no matter where you buy the car.

I believe there are even limits on "gift" cars so its not like you could have a relative in another state buy the car for you, then "give" it to you.

No tax trade in credit, and no registration credit either. If you just paid registration on your old car 1 month ago, you are still paying brand new 12 month registration on the new one.
 

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