What would you do? 94 vs 00 question

[AaronR]

Ok I need a bit of advice (and I promise to stop asking questions about this car after this one....really

)

Here's the deal,
My car:
I currently have a green/tan 1994 that is in perfect running condition and great shape. It is a great car, and I love it but I have always been a fan of open to cars. The car needs nothing but a precautionary timing belt due to age as far as work needed is concerned. (it was supposedly done once already but I can't confirm that and I am not a gambler so....
The car has 24,000 miles. I really want to get a targa so I started looking to see what is out there.

My possible new car:
The possible new car is a red/black 2000 nsx-t. It has 15,000 miles, carfaxed clean and is an acura certified car with warranty until 5/2005. Very clean.

I paid $43,000 for my 94 a little less than a year ago (just for a ref), they are offering me the 2000 for $24,500 plus my 94 in trade.

What do you guys think? I am excited about the prospect of 6th gear and a targa top so my thinking may not be strait which is why I ask for the advice of the board.

Does that sound like a good deal or a foolish move to you guys??? Let me know what you think. Any opinions are appriciated.

Thanks
Aaron

 

[nsxtasy]

Hi Aaron,

First, I think you should get the car you want. Since you obviously want an NSX-T with the 3.2-liter engine and six-speed, that's what you should get.

Therefore, I'll assume the question is really whether the price is right for this particular car. And, since you're looking at a trade-in, whether you're getting what your '94 is worth.

IMO your '94 isn't worth what you paid for it. It has below-average miles and is in great condition, but it has "deferred maintenance" (the timing belt). It's basically a "B" car as defined in the Pricing section of the FAQ, and it's probably worth somewhere around $35K, give or take.

The 2000, with average miles is also a "B" car. The fact that it is Acura certified is nice, but this car probably still had another year or so on its original warranty, even without the certification. In either case, the fact that it has a warranty means that should it have any mechanical problems, you will be able to get them fixed under warranty.

As noted in the FAQ, a 2000 NSX that is a "B" car should be worth $55-60K. Let's say it's worth $57K.

That means that the difference in value between the 2000 NSX and your '94 is $22K.

Since you would be trading in your car at this dealership, that will save you sales tax. I assume it's an Indiana dealership and sales tax is 6 percent. I also assume that in Indiana, you only pay sales tax on the cash portion of the purchase - in other words, not on the entire value of the 2000, only on the increase in value over and above your trade-in. (This is true in most states, but not all.) Thus you would be saving sales tax of 6 percent of the value of your trade-in, which is $2100.

Thus, you're looking at a $22K increase in the value of your car, plus a sales tax savings of $2100. Very close to the $24,500 that they are asking.

It sounds like a reasonably fair deal. Not the bargain of the century, not a rip-off, just your basic okay deal.

One more factor to consider, which may or may not matter to you. Your '94 has reached a point where it is basically fully depreciated. Its market value would be expected to decline very, very slowly (if at all) in the next few years. This is not true of the 2000, which will probably go down by $3-4K in value each of the next few years. That's one advantage of a nine-year-old car over a three-year-old car.

[This message has been edited by nsxtasy (edited 27 March 2003).]

 

[matteni]

Originally posted by NSXTACY:
Since you would be trading in your car at this dealership, that will save you sales tax. I assume it's an Indiana dealership and sales tax is 6 percent. I also assume that in Indiana, you only pay sales tax on the cash portion of the purchase - in other words, not on the entire value of the 2000, only on the increase in value over and above your trade-in. (This is true in most states, but not all.) Thus you would be saving sales tax of 6 percent of the value of your trade-in, which is $2100.

In Missouri (and from what I can gather about the other states in the US that collect sales tax on new/used car purchases) as long as you sell your car to anyone and buy your car from anyone and fill out the form at the DMV (or BMV as you call it in Indiana) - you only have to pay sales tax on the difference. This is something dealers tell us that simply is not true (my mom worked for the Missouri Dept of Revenue for over 20 years and it didn't even matter if you bought the cars in state or in the country). One quick visit to the BMV u\sually puts this "our state loves car dealers and gives them free tax incentives" myth to rest.

If I am correct - I would say the dealer is making significant amount of money on you in hopes that the convenience of a quick transaction is worth it to you. So the question is - is it worth thousands of dollars not to sell the car yourself and take care of the BMV forms?

We have all been excited by a new car and we all don't often think straight. By posting here I assume you have an uneasy feeling and your gut is telling you - you are getting taken a little. If your car is as clean as you say it is you should have little trouble getting fair market value for it, getting it in the hands of another NSX fan, and making some extra money to boot.

Good luck to you - hope it all works out satisfactorily for you.

------------------
Nick M

91' Red/Black with Many Mods
99' Honda Odyssey with Many Kids

 

[nsxtasy]

Originally posted by matteni:
In Missouri (and from what I can gather about the other states in the US that collect sales tax on new/used car purchases) as long as you sell your car to anyone and buy your car from anyone and fill out the form at the DMV (or BMV as you call it in Indiana) - you only have to pay sales tax on the difference. This is something dealers tell us that simply is not true (my mom worked for the Missouri Dept of Revenue for over 20 years and it didn't even matter if you bought the cars in state or in the country). One quick visit to the BMV u\sually puts this "our state loves car dealers and gives them free tax incentives" myth to rest.

It's not necessarily as clear-cut as "sell your car to anyone and buy your car from anyone", though. And this is quite aside from states that charge you sales price based on the full amount of the car you're buying (I believe California falls into that latter category).

Let's take Illinois as an example. Sure, the dealer wants you to think that you can only get the sales tax advantage if you trade it in at that particular dealer. The fact is, you can get the sales tax advantage if you sell one car to any dealer and buy the other car at another dealer. However, you can only do this if you sell to a dealer. If you sell your car to a private individual, then you cannot get the sales tax advantage, and you will pay sales tax on the full amount of your purchase. (In Illinois, it's not even considered the same kind of tax on a private sale; it's a "use tax" with a separate tax schedule - it's usually slightly lower than the sales tax though.)

Missouri is different, and makes it fairly easy with the use of their Form 426, Sales Tax Refund Request. I don't know how many other states do that, though. (I bet it's not that many.)

You'll want to look into the laws in your state. The sales tax laws are usually fairly well documented and the state websites are often pretty good. You'll find them on the Department of Revenue website, not on the DMV website. What you often have at the DMV office is representatives of the Department of Revenue where you can pay sales tax on the transaction.

The website for the Indiana Department of Revenue is here. They have an information bulletin on motor vehicle sales (bulletin 28) but it is being re-written and is not available for download. The Bureau of Motor Vehicles website is here.

[This message has been edited by nsxtasy (edited 28 March 2003).]

 

[PFORPAUL]

If you sell the car to an individual private
buyer and the dealer from which you are buying the new car won't take the extra 15 minutes to do the paperwork to save you sales taxes-TELL HIM TO TAKE A HIKE!
Don't take warranty liability issues-insurance issues or any other BS, as reasons he can not do the deal.

It is absolutely no skin off their nose to save you some money. Yes,I do think it would
be fair for him to charge you $100.00 to do
the paperwork-but they probably will not charge you a dime

One last point--SELL YOUR CAR FIRST-ON YOUR OWN.onLY THEN will you know what you are really paying for the new car. Convenience
costs a lot of money!

 

[nsxtasy]

PFORPAUL,

I guess you didn't read the posts closely. No one is claiming that any dealer refuses to do the paperwork.

The claim (and it is true, in my opinion) is that some dealers make you think that you can only get the sales tax advantage if you trade the car in at the same place and time that you are buying another car.

In many states, this is not true. However, it is also true that in many states, you do not get the sales tax advantage if you sell your car to a private party. For example, if you live in Chicago and you sell a $35K car to a private party and buy a $57K car from a dealer, you do not get any sales tax advantage. You have to pay sales tax applied on the entire $57K purchase, for $4,988. If you traded the car in at that dealer or if you sold the car to another dealer, you would only pay sales tax on the $22K difference, for $1,925. Thus if you sell your car to a dealer, you get a sales tax advantage of over $3,000 vs selling it to a private party. That's a significant amount of money.

Of course, there are additional advantages of selling to a dealer vs a private party - including the need to advertise your car, arrange to meet prospective buyers, have them test drive the car, etc.

Look into the laws in your own state before deciding what makes the most sense.

 

[AaronR]

thanks for the advice guys. I called the BMV here in Mishawaka, and they informed me that If I sell outright here I will be paying the full taxes. I'll use that as a factor.

Thank you both for for the wisdom. I'll let you know what I decide

Aaron

 

[Spider]

Aaron,

I would be very interested in your NSX if you decide to sell it privately

Got any pictures you can send me?

Tom
[email protected]

 

[PHOEN$X]

Did you check if your 94 has a new timing belt cover?

http://www.nsxprime.com/ubb/Forum24/HTML/000194.html

 

[AaronR]

Tom, I'll email you some pics. Are you the same spider from texas that had a 996 by any chance???
Aaron