How does selling a car work?
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How does selling a car work?
i'm debating on selling my 2k2 si coupe auto. i want a stick. i bought my car for 26,200 CAD with some accessories including tax.
question is if i were to sell it private, do i just get the value of the car minus tax? like say msrp was 23,500 i think and i sold it with 25k km on it would i get like $20k for a loss of 6200?
if i were to trade it to a dealer, would it be the dealer pay me $20k then i pay the difference for a new car then plus tax?
example: $20k(trade) + $3500(difference) + tax for a loss of $9k?
please explain for both if can. thanks.
btw how much is my car with. auto civic si-g coupe (g=abs+a/c), spoiler, moonroof visor, 25,000km. CAD or US dollars fine, i'll do the conversion. thanks.
question is if i were to sell it private, do i just get the value of the car minus tax? like say msrp was 23,500 i think and i sold it with 25k km on it would i get like $20k for a loss of 6200?
if i were to trade it to a dealer, would it be the dealer pay me $20k then i pay the difference for a new car then plus tax?
example: $20k(trade) + $3500(difference) + tax for a loss of $9k?
please explain for both if can. thanks.
btw how much is my car with. auto civic si-g coupe (g=abs+a/c), spoiler, moonroof visor, 25,000km. CAD or US dollars fine, i'll do the conversion. thanks.
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From: not reality
Rep Power: 0 Go to Kbb.com or Edmunds.com, or you can just see what I say. In US dollars selling privately you may get almost 15k ..trading your car will make you take a lot bigger hit on it. You will only get about 13k for it.
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Rep Power: 0 DEFINATELY TRADE THE CAR IN!! Reason being is: #1 If you privately sell your car. Let's say you get $15,000 for it. And the Altima Lets say for example purposes cost $30,000. Now, let's add the tax for the car which is $30,000 x 1.145 is $34,350. Now minus your $15,000 and you'll end up paying $19350.
Okay, now lets'say you trade in the car. Now let's say they give you $14,000 ( they make $1000 profit). Now the Altima will only cost you $30,000 - $14,000 + tax which is $16,000 x 1.145 = $18,320
Get it? Now that's given that they give you a $1000 lower quote, but i find that because they're willing to sell you a car, and make profit on the NEW car, they'll usually give you a higher trade-in value. So even if they give you $14,500 then you still save money!
I had a 2001 Civic DX-G with 34,000 KM and i got a trade-in value of $15,500 which is pretty good considering i bought it for $17,400. After 1 and 1/2 years only 2000 depreciation.
So my advice is to trade the car in. You'll save yourself a couple G's.
Main Different is when you sell privately you pay tax on the full price of the new car. If you trade it in you only pay tax on the difference, and that makes a HUGE difference given the tax is so high. 14.5 % GST+PST.
Okay, now lets'say you trade in the car. Now let's say they give you $14,000 ( they make $1000 profit). Now the Altima will only cost you $30,000 - $14,000 + tax which is $16,000 x 1.145 = $18,320
Get it? Now that's given that they give you a $1000 lower quote, but i find that because they're willing to sell you a car, and make profit on the NEW car, they'll usually give you a higher trade-in value. So even if they give you $14,500 then you still save money!
I had a 2001 Civic DX-G with 34,000 KM and i got a trade-in value of $15,500 which is pretty good considering i bought it for $17,400. After 1 and 1/2 years only 2000 depreciation.
So my advice is to trade the car in. You'll save yourself a couple G's.
Main Different is when you sell privately you pay tax on the full price of the new car. If you trade it in you only pay tax on the difference, and that makes a HUGE difference given the tax is so high. 14.5 % GST+PST.
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Dude, he (IMURMILK1) told you how it works. 
You get more for selling it on your own because the dealer does you the favor of getting all the ownership transfer papers done and you don't have to wait to sell it, they just take it. There's also some tax involved because they technically "buy" the car from you, but you eat the tax. kbb.com will tell you the value of the car (private sale and trade in) and you can try to sell it. You put the ad in the paper or where ever (costs money), you have to wait for people to come to look at it and drive it, you'll probably have to be able to generate a repair history, selling a practically brand new car will raise some questions with people, and you could end up waiting a while before you can go get your new car. -or- you can eat $1500-2500, dump the old one and drive home a new one the same day. I don't know how close to the asking price you can get, I've never bought a car through an ad. Then once someone decides to buy it, you have to go to the DMV and get the title, the plates and some other stuff transfered to the new owner, and get the money. I do not know if the money is taxable other than with annual income tax.
You get more for selling it on your own because the dealer does you the favor of getting all the ownership transfer papers done and you don't have to wait to sell it, they just take it. There's also some tax involved because they technically "buy" the car from you, but you eat the tax. kbb.com will tell you the value of the car (private sale and trade in) and you can try to sell it. You put the ad in the paper or where ever (costs money), you have to wait for people to come to look at it and drive it, you'll probably have to be able to generate a repair history, selling a practically brand new car will raise some questions with people, and you could end up waiting a while before you can go get your new car. -or- you can eat $1500-2500, dump the old one and drive home a new one the same day. I don't know how close to the asking price you can get, I've never bought a car through an ad. Then once someone decides to buy it, you have to go to the DMV and get the title, the plates and some other stuff transfered to the new owner, and get the money. I do not know if the money is taxable other than with annual income tax. 
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From: Charlotte, North Carolina, US
Rep Power: 0 Geezz....14.5% tax up there...yowser!
Like noodleboy said, you need to look at what it will cost to trade and what it will cost to sell the car outright. 99% of the time, in the U.S., you'll always come out better by selling the car privately. However, here in N.C., tax on car sales is like 3% so there is a big difference.
I don't feel like doing the math but just from looking at the numbers (your tax rate) you probably are better off trading. Or it would at least be will close.
Oh, and if you trade in, the dealer will tell you what they will give you for the car. Subtract the amount you owe on the car from that amount and that is what you will have to put down on the new car. They will take care of all the paper work.
If you sell it outright, you need to find out the value of it on the open market. Then, you need to see what civics similar to yours are selling for in your area by looking in newspaper, car trader, etc...You don't get to charge tax. LOL
Like noodleboy said, you need to look at what it will cost to trade and what it will cost to sell the car outright. 99% of the time, in the U.S., you'll always come out better by selling the car privately. However, here in N.C., tax on car sales is like 3% so there is a big difference.
I don't feel like doing the math but just from looking at the numbers (your tax rate) you probably are better off trading. Or it would at least be will close.
Oh, and if you trade in, the dealer will tell you what they will give you for the car. Subtract the amount you owe on the car from that amount and that is what you will have to put down on the new car. They will take care of all the paper work.
If you sell it outright, you need to find out the value of it on the open market. Then, you need to see what civics similar to yours are selling for in your area by looking in newspaper, car trader, etc...You don't get to charge tax. LOL
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Rep Power: 0 Yea, someone in Can west was asking the same question so i just cut and paste, but basically, if the tax on buying a new car is high, trading it in will most likely get you a better deal, but if the sales tax is low then selling it privately makes more sense.
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Rep Power: 0 There is some misunderstanding on some of your parts. I have worked in the auto finance industry for years as an underwriter and know the business like the back of my hand. In 99.9% of the cases, you will make more money if you sell it on your own, but it can be a hassle.
Tax credits are something to consider, but only if the trade amount is close to the amount you can sell it for privately. Do yourself a favor, don't go by Kelley Blue Book, dealers valuate cars for trade in with the Black Book and only use NADA and Kelley for valuation when they send the loan to banks. The bad news is that Black Book is generally $2k below the values in NADA and Kelley. Do yourself a favor, go to a dealer and ask them how much they will give you on a trade. I guarantee you will decide to keep your car because it will be ridiculously low.
Example:
Altima with selling price of $30000
Your civic you can sell for $18000
The dealer will give you $14000
Tax is 6.25% (as it is here in texas)
Trade: $30000 - $14000= $16000 taxable x 1.0625= $17000
Selling: $30000 x 1.0625= $31875 - $18000= $13875
Remember, in both cases you would have to add your payoff back in. The final figures on that example is what we call "line 3" or FrontEnd.
The key to all of this is to basically take the trade amount the dealer quotes you and multiply it by your tax rate to get the final benefit. If that # is higher than what you can get by selling it, then it is in your favor to trade. Don't bank on that though. Chances are that you are upside down in your car that the stick wouldn't seem so appealing once you see how much it will cost you. Also, remember if you sell the car on your own, you have to pay off your current lienholder, but if you trade, the dealer will pay it off but put the negative equity into your new car. You'll really be in the whole then.
I have a very thorough spreadsheet that I can send you if you email me at saris23@peoplepc.com
Quote
[hr]Okay, now lets'say you trade in the car. Now let's say they give you $14,000 ( they make $1000 profit). Now the Altima will only cost you $30,000 - $14,000 + tax which is $16,000 x 1.145 = $18,320[hr]
[hr]Okay, now lets'say you trade in the car. Now let's say they give you $14,000 ( they make $1000 profit). Now the Altima will only cost you $30,000 - $14,000 + tax which is $16,000 x 1.145 = $18,320[hr]
Example:
Altima with selling price of $30000
Your civic you can sell for $18000
The dealer will give you $14000
Tax is 6.25% (as it is here in texas)
Trade: $30000 - $14000= $16000 taxable x 1.0625= $17000
Selling: $30000 x 1.0625= $31875 - $18000= $13875
Remember, in both cases you would have to add your payoff back in. The final figures on that example is what we call "line 3" or FrontEnd.
The key to all of this is to basically take the trade amount the dealer quotes you and multiply it by your tax rate to get the final benefit. If that # is higher than what you can get by selling it, then it is in your favor to trade. Don't bank on that though. Chances are that you are upside down in your car that the stick wouldn't seem so appealing once you see how much it will cost you. Also, remember if you sell the car on your own, you have to pay off your current lienholder, but if you trade, the dealer will pay it off but put the negative equity into your new car. You'll really be in the whole then.
I have a very thorough spreadsheet that I can send you if you email me at saris23@peoplepc.com
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