amongmany

Ok, first off, sorry if this doesn't belong here, but I wasn't really sure where to put it.

Anyway, here is my question:

If I am going to sell a car private party and buy another one private party, what does the tax on the whole transaction come out to? Do I end up paying taxes on all of the new car, or can I pay taxes on the difference? Isn't there something called a "pass through" that is supposed to help out in this situation, or is that only when buying a car from a dealer?

I appreciate the help! I am interested in selling my celica and trying to pick up an S2k cheap, but I to be sure I am aware of all of the various fees and costs that would be involved. As you can tell, I haven't purchased many cars.

honda606

If you have a trade in, in Texas at least, you only pay tax on the difference between the price of the new car and the used one. I know all too well and I live in Houston.

amongmany

Right, but I'm assuming thats only if you're trading it in to the dealer and then buying another car from them. I am interested in selling a car private party and then purchasing another one from a different private party.

S2K_LA

Try calling the DMV (seriously!). When you buy and sell a car privately you pay your TAX at the DMV to get your registration and plate so I would ask them.


Here is some information that may help you. This is from the Texas tax code. According to this link you can't get a tax credit.


http://aixtcp.cpa.state.tx.us/search97cgi/...starviewo%2Ehts

S2K_LA

OK I asked a buddy that works at a car dealership and he told me that the only way yo could get a "Trade-in Credit" would be if you were swapping cars. IE: You are buying a car from the person who is buying your car.

Now... about your pass through. He told me that he hears reffered to as an "in and out" all the time.

Here how he explained it to me. If you want to buy Car B from a dealer and you have a buyer for your Car A then what happens is that the dealer takes your car in trade for the amount that Person B agreed to pay you for your car and then sells it to person B. So Person B actually buys your car from the dealer and not from you.

This gives you the Tax credit and the dealer charges a $100 or so to do all the paperwork.

Now.. I asked what if a person didn't want to buy a car from the dealer ship, but would be wiling to pay the dealership a "paper work" fee to handle this so that someone could get a trade-in tax credit... I was told that it does happen, but only for "friends" of the dealership.

Basically all people involved get together and "trade-in" their cars to the dealership and the dealership charges everyone and walks away with a few hundred dollars just to do paperwork.

I was told that this is "RARE" and the chances of you getting a dealership to do this would be slim and none unless you have an inside connection.

I sure hope this helps...

amongmany

Yeah, that helps a lot! Thank you very much for taking the time to ask; I really appreciate it! I kinda figured thats what the situtation was.