Are There Tax Benefits to Trading In Your Vehicle?

If you’re in the market for a new car and you’re not sure what to do with your current vehicle, think about selling it here at Helfman Dodge Chrysler Jeep® RAM FIAT. We can pay you for your trade-in and find you a new vehicle, and you can even take advantage of this process to reduce how much you owe in taxes. This is what you should know about the trade-in tax credit.

How Can I Benefit From a Trade-In?

When you trade in your vehicle at our dealership, the money we offer you can come right off the price of your new Dodge car. This is how you essentially get a big tax credit when purchasing a new vehicle.

Let’s say the car you want to buy costs $50,000. Your trade-in is worth $15,000. This means that your vehicle price has dropped down to $35,000, and that’s the price you pay tax on.

We probably don’t have to tell you what a massive difference this could make. In Texas, you pay 6.25% sales tax on new cars. If you knock $15,000 off the price of a car, that saves you more than $900.

Can I Just Sell My Car On My Own?

You could sell a car on your own and put that money towards a new car, but that doesn’t offer a tax benefit. If you got $15,000 for selling your current vehicle and put it towards a $50,000, you pay tax on that entire $50,000 purchase price. That’s just how things work.

Visit Our Houston, TX Dodge Dealership

When you’re ready to sell off your current vehicle and replace it with a new car, take care of both in one place. Our Houston, TX Dodge dealers are waiting for you, and they’re ready to help you find a new model that suits your budget and driving needs.