TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Trade in tax deduction in MD...

Discussion in 'Mid-Atlantic' started by zambono, Jun 17, 2016.

Tags:
  1. zambono

    zambono Member

    Joined:
    Mar 1, 2016
    Messages:
    752
    Location:
    DC
    My sales guy in DC said that in MD the trade in value is deducted from the sale price for tax purposes but everywhere I have seen that is not the case. Can someone confirm who purchased and registered in MD, thanks
     
  2. Vrrooom

    Vrrooom Member

    Joined:
    May 6, 2016
    Messages:
    81
    Location:
    Ashburn, VA
    That is correct.

    If you buy a new car for $80k and trade in a car at $40k, you pay sales tax of 6% on $40k. This only applies to cars traded in to dealers, so I'm not sure if it would work with a Tesla as it isn't a dealer.
     
  3. zambono

    zambono Member

    Joined:
    Mar 1, 2016
    Messages:
    752
    Location:
    DC
    Thanks, Is this a relatively new law because everywhere I have checked online MD is a state where one pays on the full amount.
     
  4. Vrrooom

    Vrrooom Member

    Joined:
    May 6, 2016
    Messages:
    81
    Location:
    Ashburn, VA
    Its been this way for a few years in MD. Going back to at least 2012. But relatively new... not more than 8-10 years. The other benefit of buying a new Tesla and registering in MD is you get an additional state incentive over the federal.
     
    • Like x 1
  5. CatB

    CatB Member

    Joined:
    Mar 2, 2013
    Messages:
    659
    I think it depends on where you're a resident, not where you purchase the car. I could be completely wrong, but when I bought 3 years ago, I thought it would be fun to take delivery in California at the factory and then drive it back , but it turns out I would have had to pay California sales tax, then pay MD sales tax all over again when I registered the car in MD. And I don't think I would have been eligible for California and MD incentives.
     
  6. Vrrooom

    Vrrooom Member

    Joined:
    May 6, 2016
    Messages:
    81
    Location:
    Ashburn, VA
    That's correct- it is where you are a resident. Military folk excluded- not exactly sure how all of their tax things work out.
     
  7. Sir Guacamolaf

    Sir Guacamolaf The good kind of fat

    Joined:
    Mar 15, 2016
    Messages:
    417
    Location:
    My Model S
    Yes and it applies to tesla also. If you do private sale however, you won't get this tax reduction.
     
  8. 78Lion

    78Lion Member

    Joined:
    Mar 17, 2012
    Messages:
    124
    Location:
    Maryland
    This is well known by both the dealers others you might trade your car into (CarMax, Nico buys cars, etc). It takes some time, but I've always found getting quotes from separate "buy my car" places will give you a pretty good idea of the best price you can get. Then take that amount to the dealership and demand they match it. The will always come back with what they will pay + the tax savings = the best price you got elsewhere. Simply tell them that they aren't giving you any incentive and if they want the car, they will come back with a better number. Any number better is the better deal.
     
  9. Sir Guacamolaf

    Sir Guacamolaf The good kind of fat

    Joined:
    Mar 15, 2016
    Messages:
    417
    Location:
    My Model S
    I got offers from 4 places, and Tesla. Lets call the 4, A,B,C,D .. D being the worst.
    Tesla was 0.8*D. I called Tesla and said, hey are you sure!! And showed them the printed offers (they give you a couple of days to a week to decide). Tesla said, yeah this is our final offer. I was like .. c'mon seriously!? They said yep!

    Sooooo... it all worked out for me in the end since I got a private sale offer 1 day before I picked my Model S, and 1 day before offer #A expired. Lucky me! But it was pure luck! I had only one private buyer come look at the car, and agreed to purchase it at not a stupid low price.

    That said, one thing that I thought was not nice, Tesla doesn't give you a trade-in offer until after your Model S is confirmed. I don't like such tactics, I like things to be put forth on the table up front, and no cleverly worded contracts or timings. Anyway, it worked out in the long run, so I didn't sweat too much over it.

    All that said, private sale is usually the best $ offer.
     
  10. Sir Guacamolaf

    Sir Guacamolaf The good kind of fat

    Joined:
    Mar 15, 2016
    Messages:
    417
    Location:
    My Model S
    IMO unless your car is a total beater, private sell your car. Advertise it on multiple markets on craigslist, give it 2-3 months, it'll sell, and it's not SUCH a huge hassle. Despite the tax savings, you'll come ahead by private selling the car.
     
  11. Galve2000

    Galve2000 Member

    Joined:
    May 20, 2013
    Messages:
    373
    Location:
    NYC
    I too think it is worth the trouble to look into a private sale, but everyone looks at this differently and there is no right answer.

    For example, I took tesla financing with the buy back guarantee even tho it was 0.25% more expensive loanwise than what i got from a bunch of credit unions. but The CUs wanted to give my finances a proctology exam, and I didn't feel like subjecting myself to all of that.

    The Tesla buyback guarantee was a factor too, but a small one since I hope to drive my 85D until the wheels fall off.

    will I be paying about $1,000 in extra interest for this 0.25% hit?

    but it's worth it to me in the end.

    similarly, a private sale may only get u $2-3,000 more than the lowball Tesla trade-in offer... u gotta decide for yourself if it is worth it.
     
  12. zambono

    zambono Member

    Joined:
    Mar 1, 2016
    Messages:
    752
    Location:
    DC
    For the quickness and not having to deal with people I went with the Tesla which gave me a fair offer plus the tax discount which adds up
     
  13. CatB

    CatB Member

    Joined:
    Mar 2, 2013
    Messages:
    659
    @Sir Guacamolaf Glad it worked out well for you. Hope you're out driving (safely of course) Enjoy!
     
  14. Sir Guacamolaf

    Sir Guacamolaf The good kind of fat

    Joined:
    Mar 15, 2016
    Messages:
    417
    Location:
    My Model S
    Thanks. I am loving my tesla and I am enjoying it safely. I'm a bit miffed about all the negative autopilot coverage on media outlets lately though. I feel safer with autopilot, than without autopilot. Not to change topics of course. Long story short I love my car.
     
    • Love x 1

Share This Page