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Trade It or Sell It: How to Get Rid of Your Old Car

Contributed by mm | June 23, 2004 2:14 PM PST

During my weekend car shopping exercise, I actually learned a couple of new things. For one, I came across this dealer site, which discussed the tax benefits of trade-in your old wheels.

In short, when you trade in your old car and buy a new car at the same time, the sales tax will be only charged on the difference of the two prices. On a $10,000-trade in the 9% sales tax (in the state of Washington), this $900 tax break itself almost make up the difference between the trade-in price and private party sales price reported by Kelly Blue Book and Edmunds.

A quick google search on this topic also led me to this MSN Auto article discussing the pros and cons of trade-in vs selling by yourself. This worthwhile reading also briefly discussion other available options: selling on consignment and donation.

Of course, I was not in the position to trade in my car when I went shopping last weekend, but knowing this tax break will most likely let me seriously consider trade in my car when I upgrade my wheels next time.

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