Question about buying a new Tesla

[Suii]

I see a lot of people mentioning that they are going to trade in their current car to wipe out the sales tax or are buying a temporary ICE car and then later will be buying a new Tesla and trade in their current car.

Forgive me but is there an advantage I am not privy to when trading in a car to purchase a new Tesla? It seems that when we buy a new car we put a deposit and then pay the remainder when we take delivery so what am I missing? Thanks for all the help.

 

[Jace_91]

Depending on the state you are in and the value of your current car it could be beneficial to reduce the sales tax. In Florida: 6% Sales tax on $100k= $6000. If you trade in your $40,000 car, you only pay sales tax on the difference, 6% on $60,000 = $3600.

Something to keep in mind when you consider that they may offer you less for a trade in than you could get selling private party, you also have the added tax savings.

 

[Kbsilver]

In NJ there is no sales tax on zero emissions vehicles. It's a cost benefit (rebate of sorts) not clearly defined on the website. I suspect there are other states that may do the same, and it probably will not last forever. Along the same lines there probably will be at some point a system to collect taxes for miles driven because with the Tesla one does not pay fuel taxes that (are suppose) to be used for road infrastructure maintenance.

 

[spentan]

Is there a list of states that do this? (Charge Sales tax on the difference only)?

I presume California is not on this list

 

[ecarfan]

California collects sales tax on EVs.

 

[TexasEV]

Is there a list of states that do this? (Charge Sales tax on the difference only)?

I presume California is not on this list

See my previous post on this topic:
Preventing another Michigan-- Pushing back against dealers
Only 4 states besides California charge sales tax on the full purchase price when there is a trade-in. The other states with sales tax have this gimmick which gives dealers extra profit on trade-ins.

 

[David_Cary]

Learn something new every day. NC reduces sales tax based on trade. I never traded in a car so I didn't know. I didn't realize it was only 5 states that didn't do this. Only 3% here so not a big issue.