Automotive

Reducing the sales tax on a new car

  • Last Updated:
  • Jul 25th, 2020 5:34 pm
[OP]
Newbie
Jul 23, 2020
4 posts
2 upvotes

Reducing the sales tax on a new car

If I paid the full HST on a new car purchased from a dealer in Ontario without any trade-in, and then later decide to sell my old car to a different dealer in Ontario, can I qualify for a HST rebate based on the amount I get for my old car?

I am asking because I know that if I had traded-in my old car when I purchased my new car, I would have ended up paying less HST on the new car, since it would be based on the price of the new car minus the amount I get for my old car. I was going to sell my old car privately but now am having second thoughts due to COVID.
8 replies
Sr. Member
Feb 8, 2010
582 posts
475 upvotes
The only solution I can think of is register the car under a corporation. Then do your HST within the corp.
Deal Addict
Jul 21, 2005
2026 posts
1075 upvotes
Alberta
I don't know how it works in Ontario, but for example, I was offered 24k for my car on trade in, and it saved me an additional $1200 in GST as it's on difference only. If I sell privately, it doesn't make any sense to sell less than $25,200. Then you have to take into account the hustle of trying to sell and see if it's worth it. I have mine listed for $29k....if I don't sell for at least 28k...it's really not work my time to deal with it since it would only be 3k difference for lots of trouble.
Deal Fanatic
Oct 26, 2008
6838 posts
2615 upvotes
BC
^ The numbers might look favourable for a trade-in in your instance, but that is usually not the case.

Dealer could have been generous on the trade because they hadn't discounted the new car price as much as they might have for a no trade scenario.

The amount of hassle in selling privately depends very much on the vehicle you are selling and where you live. Sometimes it's easy, sometimes far from it.
Deal Guru
User avatar
Jul 12, 2003
12353 posts
4860 upvotes
Toronto
Most of the time, the money you saved from HST of the new car for a trade in is far less than the money you pocket in from selling it private.
Dealership gives you very poor value on your trade in.

Again, OP mentioned pandemic situation which is understandable that you don't want to meet your potential car buyers.

But money wise, a trade in to dealership hardly win than selling your car privately (consider you are not selling way below market value )
Convenience and safety wise, trade in save you time and headaches.
Retired Forum Moderator February 2009 - June 2015
Deal Addict
Jul 13, 2007
1171 posts
683 upvotes
Toronto
The only scheme I could really think of is if you had a close enough relative with a native status card, they could buy the car and then they can gift it to you as a family member, tax free.
Deal Fanatic
Aug 12, 2006
6771 posts
2989 upvotes
Canada
macnut wrote: ^ The numbers might look favourable for a trade-in in your instance, but that is usually not the case.

Dealer could have been generous on the trade because they hadn't discounted the new car price as much as they might have for a no trade scenario.

The amount of hassle in selling privately depends very much on the vehicle you are selling and where you live. Sometimes it's easy, sometimes far from it.
Anyone thinking they are getting good value for their trade in are likely overpaying for the vehicle they are trading in against.
Deal Addict
Nov 10, 2018
4555 posts
4993 upvotes
Best way is to have the native status card.

I pay no taxes on all cars I've ever bought.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)