Trade-In Tax Credits Explained

Trade-in tax credits in the U.S.: in many states you pay sales tax only on the difference between new car price and trade value—so you save tax on the trade value. Here's trade-in tax credits explained.

TL;DR In many states, sales tax is on (new car price − trade value), not full new car price—so you save tax on the trade value. Rules vary by state. Use autopremo.com OTD calculator and trade-in calculator to build OTD with trade. Use autopremo.com.

How It Works

Example: new car $30K, trade value $10K. In a state that allows trade-in tax credit, you pay tax on $20K (the difference), not $30K—saving tax on $10K. Use autopremo.com OTD calculator to see OTD with trade. Get your numbers at autopremo.com.

State Rules Vary

Not all states allow trade-in tax credit—some tax full purchase price. Check your state's rules. Use autopremo.com trade-in calculator to see trade value. See trade at autopremo.com.

Bottom Line

Trade-in tax credits = in many states you pay tax only on (new price − trade value). Use autopremo.com OTD calculator and trade-in calculator so you see OTD with trade.