We all know that trading in your current vehicle when buying a new one can significantly reduce your upfront cost and monthly payments going forward. In addition, it also comes with a major tax benefit in most states. Our Mazda financing department can help walk you through all of this without issues.
State Sales Tax
In 45 states, when you purchase a new or used vehicle, you will have to pay a sales tax, which will be a certain percentage of the price of your new car. There’s only one real way to reduce this extra cost, and that’s by trading your current vehicle in.
If you trade in your current vehicle, your sales tax will be based on the new price of the vehicle after your trade-in is subtracted. That not only reduces the overall cost of your new ride; it also reduces what you have to pay in sales tax!
An Example of This Tax Benefit in Action
Here in Pennsylvania, the state sales tax rate is 6%. Let’s say you want to buy a $40,000 new vehicle. Your sales tax would be $2,400.
Now, let’s say you want to trade in a vehicle for $15,000. That brings your price tag down to $25,000. That also reduces the state sales tax bill to $1,500, a full $900 less.
Discuss Your Tax Benefits at Peruzzi MAZDA
The best way to see just how large your tax benefit is for your trade-in is to come down to Peruzzi Mazda and talk with our finance center. We can tell you exactly how much your trade in is worth and how much it could reduce your tax bill. We look forward to helping.
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