Question About Paying Sales Tax on the New Car Rebate

Hi Tony,

I just wanted to say thanks for all the useful information on your website. I have used it to my advantage. I am purchasing a new car and have picked out the one I want, but I did make a mistake by telling them I was going to trade in my car. I however then went out and got some quotes without letting this info be known. I then went back and have told the dealer forget the trade-in, this is the price I am willing to pay.

Here is my question. On the dealer quote he gave me he is charging sales tax on the car before the cash back and owner loyalty rebate, is this right or legal or acceptable? This is a significant amount of money because these add up to $4,000. Thank you in advance for your help.

Brian W.

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Hi Brian,

The rebates are the same as cash down. You have to pay sales tax on the selling price of the car. You take the selling price of the car plus title and registration fees plus sales tax. This gives you the total amount of the sale. Then you subtract the rebates and pay the balance either through financing or cash.

It sounds like the dealer is doing it the right way.

All my very best to you...

Tony Iorio
http://www.insidercarsecrets.com