Trading a clarity for a clarity.

Louis Nisenbaum

Louis Nisenbaum

Member
Make sense to trade in your present clarity for a new one for less than 6000 difference?
And then use a second tax credit this year. One dealer offered me a new one for 7000 difference but that deal is not worth the effort. Especially with sales tax hit.
 
Louis Nisenbaum said:
Make sense to trade in your present clarity for a new one for less than 6000 difference?
And then use a second tax credit this year. One dealer offered me a new one for 7000 difference but that deal is not worth the effort. Especially with sales tax hit.
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At least here in Michigan you will only pay tax on the difference between the new car cost and the trade in value. I'm pretty sure there is no limit on getting more that one federal tax credit for a qualified car. I would get an opinion from an accountant before consummating the deal though. I just can't see a dealer giving you a trade in value of $7,000 less than the out the door cost of the new car ( less taxes) because they could only sell the car to an unwitting consumer (because the new customer can't take the credit for the older car).

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Sales tax law vary by state, so his state charges it without the trade-in. Yeah make sure you have enough income if it's your second purchase in 2018. The tax law is different this year and high income earners get child tax credit this year so check with a tax pro.
 
Richard, dealer has already agreed to 7000 difference. With sales tax, it would be a wash to me.
7% sales on 7000. Not worth the hassle. But I left the 6000 on the table. If they need a sale, they might Agree.
 
Louis Nisenbaum said:
Richard, dealer has already agreed to 7000 difference. With sales tax, it would be a wash to me.
7% sales on 7000. Not worth the hassle. But I left the 6000 on the table. If they need a sale, they might Agree.
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Just curious. Are you considering a different color or different trim-level? How many miles will you be shedding?

Remember, there's always a chance the "new" Clarity will actually be older than the one you already own, so make sure the battery has been properly maintained.
 
Louis Nisenbaum said:
Richard, dealer has already agreed to 7000 difference. With sales tax, it would be a wash to me.
7% sales on 7000. Not worth the hassle. But I left the 6000 on the table. If they need a sale, they might Agree.
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Let's know if they bite on it. Just for kicks, when I take my car in next month, I'll ask my salesman what they would give me for mine if I were to buy another one.

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Richard_arch74 said:
At least here in Michigan you will only pay tax on the difference between the new car cost and the trade in value. I'm pretty sure there is no limit on getting more that one federal tax credit for a qualified car. I would get an opinion from an accountant before consummating the deal though. I just can't see a dealer giving you a trade in value of $7,000 less than the out the door cost of the new car ( less taxes) because they could only sell the car to an unwitting consumer (because the new customer can't take the credit for the older car).

Sent from my SM-G955U using Inside EVs mobile app
Click to expand...

Within limits in Michigan......we are limited to a maximum of $4000 exemption from sales tax in a trade (for 2018), so the maximum value of the exemption is only $240.
 
Insight man, love my clarity. Only 2500 miles. But if I can net 1000,
Why not? White touring one now, but am open to another touring color if price is right. Just an idea. Would make sure it had a recent build date too.
 
Richard_arch74 said:
I just can't see a dealer giving you a trade in value of $7,000 less than the out the door cost of the new car ( less taxes) because they could only sell the car to an unwitting consumer (because the new customer can't take the credit for the older car).

Sent from my SM-G955U using Inside EVs mobile app
Click to expand...

There are a number of people and entities in this country who do not qualify for the $7,500 INCOME tax credit -- not just unwitting consumers -- because some people don't pay enough income taxes to benefit from it. If you don't earn income, you can't benefit from the $7,500 credit at all. And such people MIGHT actually be shopping for a lightly used Clarity. Maybe? Just speculating there might actually be a market for Claritys outside of the tax credit realm, and a lightly used car at a discount could possibly fit the bill for someone.
 
craze1cars said:
There are a number of people and entities in this country who do not qualify for the $7,500 INCOME tax credit -- not just unwitting consumers -- because some people don't pay enough income taxes to benefit from it. If you don't earn income, you can't benefit from the $7,500 credit at all. And such people MIGHT actually be shopping for a lightly used Clarity. Maybe? Just speculating there might actually be a market for Claritys outside of the tax credit realm, and a lightly used car at a discount could possibly fit the bill for someone.
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You made good arguments. There are buyers that can't use the tax credit so it wouldn't be a deal breaker for them.

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Well half the country on average pays no income tax so yes if someone is looking for a clarity a slightly used one would be a good deal.

Don’t let a salesman try and tell you that it’s automatically worth 7500 less bacause of the tax credits.
 
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craze1cars said:
There are a number of people and entities in this country who do not qualify for the $7,500 INCOME tax credit -- not just unwitting consumers -- because some people don't pay enough income taxes to benefit from it. If you don't earn income, you can't benefit from the $7,500 credit at all. And such people MIGHT actually be shopping for a lightly used Clarity. Maybe? Just speculating there might actually be a market for Claritys outside of the tax credit realm, and a lightly used car at a discount could possibly fit the bill for someone.
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Don't have a job, so I converted regular IRAs to Roth IRAs to create a tax liability sufficient to claim the $7,500 EV tax credit. So there are taxes other than income taxes that can do the trick. Now I won't have to pay taxes when I withdraw those dollars from my IRA funds and I'm not obligated to start withdrawing those dollars at age 70-1/2.
 
BTW, I believe the IRS expects you to own the car for at least a year if you claim the tax credit. Something to keep in mind.
 
lanb said:
BTW, I believe the IRS expects you to own the car for at least a year if you claim the tax credit. Something to keep in mind.
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I don’t believe there is a a time limit on the federal side. There was one back in the 90s but I can’t find one on the credit that is given out now.
 
Before I call a tax pro does anyone know if there’s a residency requirement for the credit? For example do you have to reside in the country/state all year long?

We moved to Canada 3 months after I purchased the car....

-Skip


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I am the OP. One Dealer bit on 6000 difference. With 500 sales tax, net to me would be 1000. Touring for a touring.
Only 2500 miles on my car. Looking at the forest pearl. Just for a change. FYI OTHER dealers were at over 9000 difference.
 
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