Car trade in tax credit

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Dec 14th, 2020 8:13 am

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Dec 14th, 2020 12:44 am

hiker007 [OP]: Deal Addict; Dec 27, 2007; 1045 posts; 753 upvotes

Dec 14th, 2020 12:44 am

Car trade in tax credit

Thinking to trade in one of unused car and buy one later when we return to office.
Anyone knows if the trade in tax credit can be deferred to the next purchase in later time? if so, how long is the deferral period?
Second question: if I trade in the car in one dealership, can the tax credit be applied if we purchase the new car in another dealership?
Thanks.

Paying less price is the best way to combat the inflation.

4 replies

Dec 14th, 2020 4:18 am

Canuck2fan: Deal Addict; Nov 12, 2004; 2607 posts; 1361 upvotes; Hometown

Dec 14th, 2020 4:18 am

LOL it is not really a CREDIT on trade-in's in Ontario. It is true that you do not pay tax on the value of your trade in if you buy a new vehicle at the same time. The "value" of your trade in is subtracted from the value of the new to you vehicle you purchase at a dealer. Meaning you only pay sales tax on the difference.

I doubt a dealer would defer it or switch to another dealer. Maybe if you were bestest best buddies with the owner of an auto group with multiple manufacturers. Even then I can't see how it would not be better to sell your car privately for MORE than the dealer would give you, then you would bank that cash until you decide to buy another one.

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Dec 14th, 2020 5:59 am

booblehead: Deal Expert; Jul 30, 2007; 32376 posts; 19768 upvotes; Toronto

Dec 14th, 2020 5:59 am

would it not be better to sell it privately and factor in the sales taxes in the sales price ?

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Dec 14th, 2020 8:08 am

hiker007 [OP]: Deal Addict; Dec 27, 2007; 1045 posts; 753 upvotes

Dec 14th, 2020 8:08 am

Canuck2fan wrote: ↑ LOL it is not really a CREDIT on trade-in's in Ontario. It is true that you do not pay tax on the value of your trade in if you buy a new vehicle at the same time. The "value" of your trade in is subtracted from the value of the new to you vehicle you purchase at a dealer. Meaning you only pay sales tax on the difference.

I doubt a dealer would defer it or switch to another dealer. Maybe if you were bestest best buddies with the owner of an auto group with multiple manufacturers. Even then I can't see how it would not be better to sell your car privately for MORE than the dealer would give you, then you would bank that cash until you decide to buy another one.

I was hoping CRA would held the "credit" in this scenario

Selling it privately is always an option, but I prefer trade in as the process is much simply.

Paying less price is the best way to combat the inflation.

Dec 14th, 2020 8:13 am

hiker007 [OP]: Deal Addict; Dec 27, 2007; 1045 posts; 753 upvotes

Dec 14th, 2020 8:13 am

booblehead wrote: ↑ would it not be better to sell it privately and factor in the sales taxes in the sales price ?

Yep, I could do it if we are not in pandemic, but one dealership offered a good trade-in value so works out close to selling it privately, based on autotrader.

Paying less price is the best way to combat the inflation.

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