You're not alone if you're wondering whether to trade-in your old ride or sell it to a new owner before you buy a new one. There is much to consider when buying a new car, but trading a car is the easiest way to move on with your new car decision. Did you know trading could also save you hundreds of dollars?

Allow me to explain...

Florida offers a tax credit when you trade in your old vehicle on a new one. For example, if you purchased a $30,000 vehicle with 6% sales tax and you did NOT have a trade-in, the sales tax would be $1,800 ($30,000 x 6%).

Since Florida allows tax credit for trade-in's you traded in a used vehicle worth $14,000 against this $30,000 vehicle, your tax liability would be calculated like this:

   $30,000     Price of new vehicle
-  $14,000     Value of trade-in

= $16,000     Price used to calculate sales tax

The 6% tax would then be calculated on the $16,000 and NOT the full $30,000! This means you would pay $960 in tax instead of paying $1800. A savings for you of $840!

It's particularly important to consider the sales tax credit if you are thinking of selling your car privately. In the above example, you would have had to sell your vehicle for $14,960 just to "break even." If you factor in the expense of advertising the vehicle and the value of your own time, your break-even point becomes even higher. If you didn't sell the vehicle for at least $15,000, you would in essence be losing money by selling it yourself. By trading the vehicle in, you can avoid the hassle of selling it yourself AND you could pay less tax... a real "win-win" situation if ever there was one!

Wondering what YOUR trade-in is really worth? Value your trade at today.