When you trade in a vehicle at the dealership, the amount is calculated before taxes are calculated. This greatly reduces the difference between the exchange value and the market value. Let's take a closer look.
Let's say you buy a vehicle that is worth $ 30,000 and your trade-in vehicle receives $ 17,500 from the dealership. Now let's say you plan to sell the vehicle for $ 20,000 and use the cash as a deposit. The vehicle will therefore cost you $ 14,500 ($ 30,000 plus taxes - $ 20,000). When you give your vehicle as a trade, the amount is applied before taxes. So, we take the $ 30,000 and we subtract $ 17,500 for an amount of $ 12,500 plus taxes which is equivalent to $ 14,375.
Sometimes it's better to avoid all the complications that come with selling a vehicle and just hand over the keys. We don't lose that much in the end!
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