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Smart Shopper Smart Shopper-Archives Any Questions for a Car Dealer? 
16377 messages, Last post on Feb 11, 2006 at 4:59 AM
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Replying to: rroyce10 (Jan 21, 2006 3:22 am) In this case no tax court will find it as tax evasion. similar cases have been accepted by the courts so unless someone can prove it was illegal you will be safe. |
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Who wants to get dragged into court even if they will probably prevail? An "in and out" is murky at best and we won't do them. The dealer is BUYING the car and then SELLING it to the new owner. Any smart dealer will insist on running the car through the shop and doing at least a safety inspection on it. It may very well need brakes, tires and other things replaced that the first person thought were just fine. And then, the transmission decides to leave this world a week later? Guess who's on the hook? No thanks! |
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Replying to: isellhondas (Jan 21, 2006 2:45 pm) Well, that's pretty much what car dealers do... heck, I've been known to do it myself  And then, the transmission decides to leave this world a week later? So what? I understand why some dealers won't do in&outs, it's their choice, but I still don't see the problem. At least in MI, the dealer can tell the buyer to go climb a tree... "AS IS". I had a conversation with the UC mgr at the Subie dealer by my house... I asked him about a car he had on the lot that was strictly a wholesale piece.. he said absolutely no problem selling me something with high miles and "as is -- where is"... we didn't do the deal in the end, but he was very straightforward about it. There's a federal sticker in every car that has a place where you can check "AS IS -- NO WARRANTY". What are we to suppose that means? I just don't see the big deal. Maybe OR is different... -Mathias
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Replying to: steine13 (Jan 20, 2006 5:55 pm) Mathias - I'm well aware of that. I was discussing the situation with a vehicle you own outright. IMHO, it's silly to buyout a lease vehicle just to sell it right away. Worse than just paying the sales tax on the used car is the fact that you've already paid the full sales tax on it when it was leased (as least here in MA). Actually, I think one can avoid the sales tax when buying the leased vehicle by not registering it. Here in MA, you don't pay the sales tax until you register it. No registration, no tax.
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Replying to: steine13 (Jan 21, 2006 3:16 pm) Not in MA. IIRC every used car sold through a dealer has to be warrantied in some fashion. |
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Replying to: robr2 (Jan 21, 2006 4:21 pm) That is an interesting point. If the residual is lower than the trade-in value of the car, do I have to pay taxes on the residual if I trade the car to a dealer for a new car? I live in Virginia, if it makes any difference.
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Replying to: exb0 (Jan 21, 2006 5:28 pm) On your trade - the lease for example - you already paid the full tax on the original sales price back when you took the lease out; e.g. $25000 transaction price x 3% = $750 taxes paid . Thus when you 'trade' it in or if you were to buy it outright you dont owe any taxes. Therefore if you have positive equity vis-a-vis the residual value it's just pure cash in your pocket or additional downpayment. No taxes due.
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I am looking to trade my Accord on an Odyssey. I would expect that their will be about $10K difference between my trade value and the Ody price. I am planning on leasing the Ody. When calculating my lease payments I should expect to pay taxes only on the $10 K. Is that correct?? Thanks for any info.
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Replying to: steine13 (Jan 21, 2006 3:16 pm) All I'm saying is for a low/no profit deal it just isn't worth the trouble and risks. |
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| I think it depends on the state, I looked into this recently in NJ, and was told by the dealer that I would NOT received a tax credit for my trade in against a lease, only on a urchase. Really not sure of the nuances, but your best bet is to ask the finance manager at the Honda dealer, since they wil know the specific rules in your state. | |
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