"Convenience Trade" in Ontario, anyone here done this?

Mike

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#1
My situation: I'm in Ontario. My friend will be buying my '08 Prius from me when the day comes for me to buy my Model 3.

While scanning Reddit last night, I came across the term "Convenience Trade" (see Reddit thread at the end of this post) and that someone had used this technique when purchasing a new Model S.

Essentially, when one "trades in" their current car at a dealership, one does not have to pay the 13% HST on the portion of the new vehicle price that is offset by the trade.

The term "Convenience Trade" seems to imply that a dealership will include one's private sale price of one's vehicle on the new car purchase documentation, thus reducing the amount of HST owed (see details about half way down this link):

http://www.autotrader.ca/newsfeatures/20170501/new-or-used-buying-a-car-in-canada/

Does any Tesla buyer in Ontario have any experience with this?

Does the actual (physical) transaction of selling one's current ride (privately) to the next owner have to take place at the Tesla delivery center? Thanks. Cheers.

 

SoFlaModel3

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#3
I’m not sure how US and Canada, vary but my trade in in Florida did offset the purchase price and reduce tax. I don’t think in the States you can paylay that transaction to another third party though.
 

garsh

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I don’t think in the States you can paylay that transaction to another third party though.
You can, but it's written up as if you traded your car to the dealer, and then the 3rd party immediately bought the used car from the dealer. The dealer just forgoes any profit on the used car.
 

tombar

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#5
My situation: I'm in Ontario. My friend will be buying my '08 Prius from me when the day comes for me to buy my Model 3.

While scanning Reddit last night, I came across the term "Convenience Trade" (see Reddit thread at the end of this post) and that someone had used this technique when purchasing a new Model S.

Essentially, when one "trades in" their current car at a dealership, one does not have to pay the 13% HST on the portion of the new vehicle price that is offset by the trade.

The term "Convenience Trade" seems to imply that a dealership will include one's private sale price of one's vehicle on the new car purchase documentation, thus reducing the amount of HST owed (see details about half way down this link):

http://www.autotrader.ca/newsfeatures/20170501/new-or-used-buying-a-car-in-canada/

Does any Tesla buyer in Ontario have any experience with this?

Does the actual (physical) transaction of selling one's current ride (privately) to the next owner have to take place at the Tesla delivery center? Thanks. Cheers.

I have heard (no confirmation ) that Tesla in Canada will do this for $500. Best way to be sure is check with Tesla in Toronto.
 

oripaamoni

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#6
Are you saying that if I trade in a car worth $32k towards a $56k I will only have to pay tax on $24k? What if the car being traded isnt full paid off?
 

Mike

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I have heard (no confirmation ) that Tesla in Canada will do this for $500. Best way to be sure is check with Tesla in Toronto.
Hold the presses folks.

I just got off the phone with Tesla in Toronto.

The Ontario government just made changes to details regarding the concept of the convenience trade.

The sales person, Greg, told me that it is now colloquially known as the "inconvenience trade".

Under the new rules, the trade in vehicle must be brought into the (Tesla) dealership 24 hours before the new vehicle will be purchased and driven off the lot.

(Tesla) then takes the trade in to the MTO to deal with the paperwork.

The following day, the person buying the trade in must come to the (Tesla) dealership to sign all the paperwork and cheque.

Then (no kidding) the trade in vehicle must be towed (!) to the new owners home prior to being allowed to put plates (permanent or temporary) on it.

In other words, the province has caught on and doesn't want to loose any of the HST to a trade in value, unless that trade in value is via the legacy dealership method........
 

Brett

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Are you saying that if I trade in a car worth $32k towards a $56k I will only have to pay tax on $24k? What if the car being traded isnt full paid off?
Not in California. Here you have to pay the full tax regardless of the trade-in. It varies by state and CA doesn't allow it. In other states you would be correct and I believe the remaining balance on the trade-in wouldn't matter.
 

SoFlaModel3

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#9
Are you saying that if I trade in a car worth $32k towards a $56k I will only have to pay tax on $24k? What if the car being traded isnt full paid off?
I can’t speak for Ontario, so best to confirm for sure with someone like @TrevP

Not in California. Here you have to pay the full tax regardless of the trade-in. It varies by state and CA doesn't allow it. In other states you would be correct and I believe the remaining balance on the trade-in wouldn't matter.
I believe 7 out of 50 states don’t allow for this. Fortunately Florida is one of the 43. I was also pleasantly surprised to find out it was on value of the car being traded in and not on value of the car less your payoff amount as I never realized that.
 

TrevP

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#10
Are you saying that if I trade in a car worth $32k towards a $56k I will only have to pay tax on $24k? What if the car being traded isnt full paid off?
That’s correct. You save tax because the trade is taken in and will be resold where tax is applied to it. You pay tax on the balance difference
 

Sandy

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#11
I was selling a car when I bought my bike. The dealer let me run it through as a trade and it saved me $1300 in tax on the bike.
 

oripaamoni

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#12
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I can’t speak for Ontario, so best to confirm for sure with someone like @TrevP



I believe 7 out of 50 states don’t allow for this. Fortunately Florida is one of the 43. I was also pleasantly surprised to find out it was on value of the car being traded in and not on value of the car less your payoff amount as I never realized that.
Damn there is no way to win with taxes in Cali... (still sore from doing my taxes over the weekend)