New car incentives question

[CHCRandy]

I jumped today. I went ahead and bought a new Malibu. Ended up with 30%+ off MSRP.....pretty sure that is hard to beat. One thing I am still wondering about is if the dealer kind of got to me on the sales tax. MSRP was around $27,500 and I paid $19,100 but they charged me $1800 in sales tax. I figured I would pay 7% on the 19,100 but they said negative, that I have to pay sales tax on rebates. Anyone know if that is right or did they rip me off for $500 extra?

They also tried to throw me on my lease pay offs, they agreed to pay off the remaining lease payments but then they included it in the original rebates. I politely told them no deal. They were figuring paying them off and including in rebates, and basically adding the amount back into my new car price, which took it from 19,100 to 19,900. A few clicks of the calculator and they knew I realized I was paying the 4 payments anyway, and I said I was walking away from deal...so they then deducted that from the total and went back to 19,100 after all rebates.

I appreciate everyone taking time to educate me a little on this stuff. It being the last day of month really helped me........and me doing my homework and knowing going in what the totals should be really helped. When he came up with total I owed I knew something wasnt jiving.....after some haggling we found the almost $2,000 difference in their and my numbers.

Overall, I highly recommend Monte Endris at Hubler Chevy. He will bend over backwards to help you be happy.

 

[BehindBlueI's]

I jumped today. I went ahead and bought a new Malibu. Ended up with 30%+ off MSRP.....pretty sure that is hard to beat. One thing I am still wondering about is if the dealer kind of got to me on the sales tax. MSRP was around $27,500 and I paid $19,100 but they charged me $1800 in sales tax. I figured I would pay 7% on the 19,100 but they said negative, that I have to pay sales tax on rebates. Anyone know if that is right or did they rip me off for $500 extra?

It's right.

https://www.in.gov/dor/files/sib28s.pdf

Any adjustment shown on a customer’s purchase agreement for which the dealer receivespayment or credit from a third party is to be treated as a payment and is not a reduction of thetaxable selling price.A manufacturer’s rebate is not an allowable deduction from the taxable selling price if thedealer receives payment for such rebate, as shown on the customer’s purchase agreement. Amanufacturer’s rebate, as shown on the customer’s written purchase agreement, is a form ofpayment. It is not a reduction in the dealer’s gross retail selling price.Rebate Example: An automobile manufacturer provides a $2,000 rebate to a customer on thepurchase of a specified model of automobile. The customer negotiates a $20,000 purchase priceon the automobile. The customer then has a choice: He can pay $20,000 to the dealer and receive$2,000 in cash directly from the manufacturer, in which case the sales price would be $20,000.Or he can assign the rebate to the dealer and pay an additional $18,000 for the automobile. If theamount of the rebate is known by the dealer at the time of the sale and the rebate is identified asa manufacturer’s rebate on documentation received by the purchaser, the rebate is included in thesales price. Thus, the sales price is $20,000 whether the customer keeps the rebate or applies therebate as a payment to the purchase price.

Congratulations, I hope you enjoy the new car.

 

[GodFearinGunTotin]

Yep, like BBI says, you pay sales tax on everything except what you paid as a down payment or trade in value.

 

[GodFearinGunTotin]

My wife's driving a 2012 Malibu and it's been a good car so far. Good luck with yours.

 

[BehindBlueI's]

Yep, like BBI says, you pay sales tax on everything except what you paid as a down payment or trade in value.

You still pay on down payment, that's part of the sales price. Else if I paid $20k cash for a $20k purchase, I'd owe zero sales tax.

Trade in value is allowed though, as it reduces the actual purchase price.

 

[CHCRandy]

My wife's driving a 2012 Malibu and it's been a good car so far. Good luck with yours.

Thank You. I am surprised with how big it is compared to the Cruze. Rides like a Cadillac. I am happy although that engine stop is going to take some getting use to.

You still pay on down payment, that's part of the sales price. Else if I paid $20k cash for a $20k purchase, I'd owe zero sales tax.

Trade in value is allowed though, as it reduces the actual purchase price.

That's what they told me....guess they were being honest. Thanks for your help.

 

[GodFearinGunTotin]

You still pay on down payment, that's part of the sales price. Else if I paid $20k cash for a $20k purchase, I'd owe zero sales tax.

Trade in value is allowed though, as it reduces the actual purchase price.

That makes sense. You've already paid tax on the trade in. Seems like that was the explanation i got several years ago. It's been a few years since I bought a new car so my memory is obviously not as good as I thought it was,

 

[BehindBlueI's]

That makes sense. You've already paid tax on the trade in. Seems like that was the explanation i got several years ago. It's been a few years since I bought a new car so my memory is obviously not as good as I thought it was,

Yeah, I was suspicious the first time and looked it up.

Also, remember that sales tax may be deductible from your income taxes at the end of the year, check with your accountant.