I'm still fumbling with the selling of my Wrangler, and I'm thinking of taking the loss by trading it in....but the dealer keeps telling me I'll save on the tax...what does that mean? <br>Thanks<br>Christian<br>(soon to be) 99.5 Silver A4 1.8TQTS-sunroof,sport seats,trip computer<p>PS- Should I refuse to pay documentation fees, advertising fees, title and registration fees...what do I HAVE TO PAY? I live in NYC near Long Island. (Queens)<br>

Some states (not CA, but for instance WA) have this nice "feature" that you pay only tax on what you pay to the dealer. So if you buy a 30k car and trade-in something for 10k, you pay sales tax only on the 20k. This can be quite nice, and an incentive to take a beating by the dealer with the trade-in.<p>However, the tax savings on a 10k value is still below 1k, while the dealer may rip you off for more, so watch out.<p>- Stan<br>

You only pay tax on the difference in price:<br>say A4 costs 30K and tax rate is 10% you pay 3K in taxes <br>however if you trade in a car that is worth 10K you only pay tax on the difference or 20K so around 2K in taxes.... <p>the prob is that they usually give you the wholesale or lower price for your trade in, in other words they screw you on the trade in price... I traded in because the tax savings in Canada are much higher and I did not want to bother trying to sell my car in the private market.