The complete automotive resource for buyers, sellers, and owners like you.
Car, Truck and SUV Forums at Roadfly
+ Bentley Forums
+ BMW Forums
+ Cadillac Forums
+ Chevrolet Forums
+ Ferrari Forums
+ Jaguar Forums
+ Lamborghini Forums
+ Lotus Forums
+ Mercedes-Benz Forums
+ Maserati Forums
+ MINI Forums
+ Porsche Forums
+ General Discussion
+ Marketplace Forums
Re: Sales tax “credit”? (archive)
[ Follow Ups ] [ Z3 Message Board ] [ Msg. Board FAQ ]
Posted by Chris C. on August 21, 2000 at 21:48:30:

In Reply to: Sales tax “credit”? posted by Rick DeJarnette on August 20, 2000 at 19:29:37:

Cant speak for WA, but here's how it works in GA (should be the same, but check with BMW financial services--their customer service is EXCELLENT!)

If you sell a leased vehicle to a 3rd party (been there done that) you have the advantage of a higher retail price for all of your meticulous car of the car, but you (or the buyer) will owe sales tax on buyout from BMW (7% in GA of cap cost minus what you've already paid in tax)

Dealers don't have to pay sales tax on a wholesale transaction...so if you trade the car to them you DO GET the tax credit (done that, too!) for the price the dealer pays you against a new car, but ONLY on a purchase of a new car (not a lease where in GA you pay the sales tax
monthly!)

BMW will not give you credit for dealer installed options if you(even if they installed em!) turn the car in--they have to be residualized at the time of purchase (rarely done). You will get slightly more on a trade from a dealer for these, whereas they count a lot in a private 3rd party sale.

Finally, in GA there is no sales tax on the selling price of a vehicle sold between private parties. Therefore the only sales tax due is when you (technically) buy the car from BMW and then sell to the 3rd party. In some states you would owe tax on the second transaction ,too!

BMW sets its residuals on these cars VERY conservatively--meaning you pay more than you should for depreciation (residual is somewhere between retail and wholesale). It almost always benefits you to sell the car privately to a 3rd party rather than trade--and your only option to save $$ (IN GA) if your new car will be leased. Ask more for your car since it has low miles and is very clean and split the sales tax due with the new buyer.

Don't listen to either salesperson...even if they are nice and trustworthy-- A. they are not accountants or tax experts B. NEVER forget they ALWAYS have their own agenda. That's why they are sales people.

Call BMW FS and speak with the tax specialist for your state. Make em earn some of that $600 lease fee--they are actually very good.

HTH,
Chris C.

Follow Ups:


[ Follow Ups ] [ Z3 Message Board ] [ Msg. Board FAQ ]
Questions, comments, or problems, please visit the Roadfly help desk.
Roadfly.com Logo © 1997 - 2009 Jump Internet Inc. All rights reserved.