Does anyone know if this is true for CA? I said it was based on what the dealer told me (tax on the car is calculated before down payment, trade in, etc.)

 

I just purchased a 2011 Mustang for my wife. V6 Premium, Pony Package, Security Package. MSRP $29,080. Invoice according to TrueCar was $27,491.
I had done a lot of research on the car, but it was the first time I had purchased a new car through a dealership. I hate negioating anything, and was really dreading the process. After talking with quite a few people, I figured my best strategy was to go into the dealership with the mindset of "I will give you the title to my trade-in, and write a check for 'x' amount." Before going into the dealership, I really calculated out what I thought was a good deal. Taking into consideration reality of my trade-in, incentives, invoice price of the new car, taxes, everything. Started the negotiation a few thousand lower than what I was happy paying, and ending up getting a deal I was very satisfied with.
In the end, this strategy really made the whole experience very smooth. I didn't have to worry about doc fees, taxes, or any other hidden charges. If they wanted to charge high fees for something or lowball my trade, they had to take some money off somewhere else. For example, my receipt has $399 in doc fees on it (excessive I would imagaine), but the price of the car on the receipt was actually about $550 below invoice, so basically a wash. I really feel I got a good deal on the car, and fair value on my trade-in. I also think the timing of it all was important. Went the day after Christmas, so end of the month/year, and also at the tail-end of 6 straight days of rain. And here in Las Vegas, the city freaks out at any sign of weather, let alone a week of it.

 

Yup!! Dealers do it All the Time, although they'ed Never admit it! The Deduction is Not Common knowedge.....

 

As far as the taxes go, I know in Nevada you essentially only pay on the difference between the trade-in and the new car. However, while researching to try to figure this out, I read in multiple places that this does not apply in California. That's just what I saw.
And in reply to some people's comments about how dealerships play games with this, I did experience this in my transaction. While negotiating, the offer from the dealer showed two prices for my trade-in. One was a trade-allowance, and one was something like "full trade value." So the dealer kept saying "oh, we are giving you $12,000 for your trade," but in reality, that $12,000 was the "full trade value" and included the tax break. Seemed to me like the dealership was trying to take credit for what the State of Nevada was giving me a break on. It's not like they were hiding it, it was written on the offer, but the way they presented it could definitely throw people off. I pointed it out to the salesman, and on the next offer my "trade allowance" increased to $12,000.

 

I would doubt California would give any breaks when it comes to taxing its residents... I may be wrong, but I read somewhere that when you buy a new cellphone in California, even if you are getting a new plan and the phone only costs you $200 as part of that deal, you then have to pay the taxes for $600 because that is the actual cost of the phone. Rediculous. California is a beautiful state, but the state government makes it impossible for me to even consider ever living there...

 

You're absolutely correct. Example- a new iPhone is $600 but $200 with a contract. I had to pay 8.75% on $600.

 

TTL is a fact of life unfortunately, and it's something the dealer collects, they don't charge it, they never actually see that money in a profit respect. 200 above invoice is a very good price, the only dispute is the trade in value, but think of it like this, you're getting your trade value but you're also saving the tax on whatever they give you for the truck.

 

They're charging me $486 for FDAF/LMDA assessment. What's that?

Never mind...found it...advertising.

 

Now THAT really goes above and beyond the typical scummy sales tactics!

I would think that is a crime (charging more "taxes" than the law provides/requires) whereas the other games are just "salesmanship"

 

No dealer has ever done this in my state.
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Dealers here do not do that here either. The amount of the trade is always deducted from the taxable amount of the sale. e.i. 30000 new car with 10000 trade, you pay taxes on 20000.

 

In my province, we pay tax on the difference only. My dealer agreed to do a "courtesy trade" - I sold the vehicle on my own but the buyer paid the dealership and I paid teh difference fro the new car. I got $2500 more than the dealer offered on the trade plus only paid tax on the difference.

 

ha ha, good one!



(there is no sales tax in New Hampshire)

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X-Plan price (you can see it on the invoice) + tax, title, and allowable fees under X-plan is a fair deal. If that brings you to around what they finally quoted you out the door before trade in, then I don't see anything wrong.

 

If you really want the car, I’ll bet it’s not too late. The dealership will probably call back with some “great news” about how they figured out a way to give you more for your trade.

 

Update: The dealership did call back and gave me $500 more for my trade in.

Picking her up tonight! Thanks for everyone's input.

 

 

Don't forget to post pics!

 

What qualifies you for X-plan, or any other special pricing, for that matter? Is it just a matter of requesting it? I need more info on this, I am currently in ongoing negotiations for a 2012.

 

The easiest way is to join the Mustang Club of America ($50) then request an X-Plan pin number from them. It's good for a year on any Ford product. X-Plan is about $100 over invoice. You might be able to negotiate the same deal on your own.