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Trade-In Allowance

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A trade-in allowance reduces the purchase price when the seller takes a motor vehicle in trade.

The vehicle must be titled in the name of the customer trading in the vehicle except in the following situations:

  • A child is trading in a vehicle titled in his or her parent’s name
  • An individual is trading in a vehicle titled in his or her spouse’s name

The trade-in of an off-road vehicle does reduce the purchase price of a motor vehicle. However, sales tax for the motor vehicle is calculated on the full purchase price before the trade-in allowance.

What type of vehicle is being purchased? What type of vehicle is being traded in?  What price is sales tax calculated on?
Motor vehicle Motor vehicle The purchase price after subtracting the trade-in allowance
Motor vehicle Off-road vehicle The purchase price before subtracting the trade-in allowance


For more information, see Off-Road Vehicle.