Some drivers think about trading in their car when they shop for a new one, but many don't realize just how much they can lower their sales tax when they trade-in at Hall Toyota Virginia Beach. The experts from our Toyota financial department can tell you all about this tax advantage.
How You Can Lower Sales Tax
When you buy a new car, you pay the sales tax on the final selling price of the car. When you trade in a vehicle, you’ll lower the selling price of that new Toyota model you've had your eye on, therefore lowering the sales tax.
This can make a pretty big difference. The state of Virginia charges just over four percent tax on each new vehicle purchase.
Let's say a car costs $40,000 and you trade in your car and get $15,000. Now your new vehicle costs $25,000, so let's see what the new tax bill looks like. You would have paid $1,660 in taxes originally. The trade-in lowers this amount to $1,037.50.
What if I Sell to Someone Else?
If you sell your vehicle to a private buyer and then purchase a vehicle at our dealership, you won't get the same sales tax benefit. That's because this method doesn't lower the price of the new Toyota car you want to buy. You may have some extra money in your pocket, but you still have to pay the sales tax on the new car's original price.
Trade-In Your Car at Hall Toyota Virginia Beach
If you're in the market for a new Toyota car and you have a vehicle to trade in, visit our Toyota dealership in Virginia Beach, VA. We can answer any questions that you have about our newest models and how trade-ins work.
