The dealership where I am planning to buy a new truck is telling me that the seller pays tax on a Carmax sell (not trade-in), and therefore they are willing to match roughly 94% of the Carmax appraisal I got for my current vehicle. Is this right or am I getting the run around?

You are getting the runaround. There are no taxes on a straight sell to CarMax. By NOT trading in at the dealer, you lose 6.25% tax credit on your trade allowance, but that doesn't change the cars value. If CarMax says its worth 10000 cash, why wouldn't your dealer pay the same? Easy answer because he like taking advantage of you.

^^^Boom.

It's the same net impact to you... but I would tell them to beat Car Max straight up if they want the trade-in.

Also… 10k in straight cash is better than a trade allowance. You don’t necessarily have to put it all down on the car (assuming your trade is free and clear).

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You are getting the runaround. There are no taxes on a straight sell to CarMax. By NOT trading in at the dealer, you lose 6.25% tax credit on your trade allowance, but that doesn't change the cars value. If CarMax says its worth 10000 cash, why wouldn't your dealer pay the same? Easy answer because he like taking advantage of you.

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This. A lot of dealers try to offer less and then use the tax savings to make up the difference. Don’t let them do that. The tax savings comes out of the gov’ts pocket, not theirs, so there is no reason to accept that as a logical excuse to offer less.

besides the fact that carmax "holds" $1000 on every appraisal, meaning the actual cash value (ACV) of the car is $1000 higher than they offer you anyway, no negotiation. So your dealer is giving you a trade in offer of ACV-$1000-6.25% without doing any work. pretty ****ty dealer.

Thanks for all the info guys. Mookie, I am still a little confused on your post. Would you be able to dumb it down anymore for me? Sorry.

If the new car is listed for 25k, you pay 6.25% in taxes on the full amount. If you trade in a car and a dealer gives you 10k value on your trade, you’ve already paid taxes on your current vehicle once, so you are only taxed the difference on the new vehicle (15k).

The dealer is basically telling you “we’ll give you $9400 and with the trade tax savings it brings it close to Carmax’s offer of 10k”.

That’s BS…just a reason to offer less. A car is worth what it is worth.

The impact to you is little…you’re financing almost the same amount either way. But the dealer sees profit in both offering you 6% less, and also getting your car to sell it on the used lot. You're basically doing them a favor if you accept that, and they're not doing a thing for you.

Mookie says.... ACV. 10,000 - 1000 (carmax hold) = 9,000 - 562.5 (6.25%)= 8437.5 the amount your dealer is offering

sure... take the earlier example of getting a written cash offer from carmax for 10000. they ACTUALLY valued your car at 11000 but they HOLD 1000 from you to cover their fixed costs. they had market information telling them that the true value of your car is 11000, but when they hit "send" on their computers, their internal system deducts 1000.

If you take your car anywhere else for evaluation, their systems won't deduct that 1000, so if a dealer is honestly evaluating the value of your car, they will use the same market data available to carmax and should evaluate it at 11000. so, the dealer you are working with right now is offering to buy your 11000 car for 9400. pretty good deal for him.

that is why you see a lot of places now advertising (like henna chevrolet in austin) that they will offer $500 more than carmax because they know they are still coming out $500 ahead.

Is that $1000 from a percentage? One of the cars I am looking to trade in or sell (we have 2 to get rid of) is in the $2000 range according to KBB and NADA.com.

it used to be scaled based on the value of the car. anything over 3500 was hit 1000, 1500-3499 was hit 500, and under 1500 was hit 250.

but yes the 500 over carmax offer henna chevrolet in austin offers looks like it is good for any car:

http://henna.com/We-Purchase-Vehicles/

^^^^