"One other idea that I have done a couple of times is to set up the private sale of the trade vehicle, and run the sale through the dealer. That way you get even more of a sales tax benefit (I had to pay a $100 doc fee but that was no big deal) as they show the trade at the agreed price to the third party. I also purchased a 94 LS from a friend through a dealer. Since he was trading his vehicle, he was willing to sell it to me through the Lexus dealer at the wholesale price they were giving him. The Lexus dealer required me to pay for a $150 inspection since the car would legally be sold by them"

This sounds like a great arrangement and I have inquired about it a couple of times only to be told, correctly I believe, that doing this is against the State sales tax regulations because as you state "the car would legally be sold by them" and therefore a taxable transaction. In addition to the sales taxes which would be collected in such a transaction my dealer also wanted a really high transaction charge - something near $1,000 including the doc. fees which are high here. And again if the car is legally sold by the dealer they have liablility for whatever might go wrong with the car or transaction. And there is some issue with their dealer status if they pass a car through without the title reflecting that they were involved in the transaction. I have had salesman tell me "sure we can handle that for you" only to be informed by the employee they referred me to that no, they can't do it because .................. Maybe not the same in all states.

Dave Mac

 

I have sold two cars this way., One was with a dealer that did not charge doc fees and one dealer had a $99 doc fee which I paid. The title does technically transfer to the dealer and then to the third party, and the dealer collects the sales tax on the sale to the third party (which the purchaser would otherwise pay at the county clerk's office if it was a private sale) so everything is above board.

I would think these days the potential dealer liability would be the biggest hurdle, as was the case I mentioned when I purchased through a Lexus dealer and they charged me to inspect the car.

 

Dealer liability for the "courtesy trade" deals is not an issue - in PA at least - as the dealer merely sells the car "as is" no warranty.