Tips on Buying Cars: Taxed on Rebates in Florida, florida sales tax, department of motor vehicle

Question
QUESTION: Hi Jeremy, I have a situation I could use some advice on. I have been searching for a new car and have spoken to a salesman about a car I test drove and really like. When he did the write up, I noticed that he calculated Florida's sales tax of 6% before the rebates and my cash down payment. I havent bought the car yet and would like to know what I should do? If I'm reading another responce from you correctly, then he is calculating the rebates incorrectly, right? Here is a copy of the write up for a 2009 Ford Focus, its written exactly like this:


Base Price of Vehicle - $19102.99
Less Trade In - $4000
Florida Law Waste - $8.50
Delivery & Document Fees - $399.50
Florida Sales Tax 6% - $936.54
Florida Tag & Title Transfer - $150.00
Outside Tag Agent Fee - $43.00
Payoff on Trade- $5800
Total before down payment or deposit - $22591.03
Rebate - 1000
College Rebate - 500
Cash Down Payment - 500
Final Amount Due - 20491.03


ANSWER: Michelle,

If I am reading the Florida law clearly, if that is possible, you are to only pay sales tax on the actual sales price of the vehicle, AFTER any and all rebates, and after any trade in credit.  Now, understand that I don't live in Florida, and am not completely knowledgeable of the Florida law regarding sales tax on the purchase of an automobile. If I were you, because I am not the final source on this issue, I would call your local Department of Motor Vehicle office and ask them what you should be charged sales tax on.  They would be intimately knowledgeable of the sales tax laws and procedures.  Now, I can tell you that you will pay taxes before your down payment.  Your down payment does not get deducted off the sales price for tax purposes.  

I hope this helps.  Sorry I can not definitely give you an answer, but I would call your local DMV office and they can tell you the absolute final law.  Laws are changed so often, and the Internet resources aren't always up to date.  

Let me know what you find out, so I can be sure to pass on the accurate information in the future.

Thanks - JB

---------- FOLLOW-UP ----------

QUESTION: Thanks!

One more question... Since I would like to buy a Ford, they are having the Ford employee pricing so called deals going on. I was told that the employee pricing is not negotiable since thats the price that the employees pay. I dont remember the invoice price but maybe you let me know how I can get the price down further than $19102.99 (employee price) before any rebates are applied. I'm not trying to rip off the dealer, im just trying to cover my end so I dont get ripped off.

Thanks again for all your help!

Michelle

Answer
Michelle,

Thanks for your feedback.  I appreciate it.  On Employee pricing with Ford, that is the price.  It is the actual price that the Ford employees pay, which is below invoice.  There isn't any negotiation on that price since they already discounted the car.  When a dealership advertises a car, or the manufactures advertise special programs, they usually already have most of the profit taken from them.  On employee pricing, the dealership can not sell a vehicle for more or less than than the manufacture says or they do not get the advertising dollars on that car from the manufacture.  I wish I could help you get a better deal, but on something like that, there just isn't any play.

Thanks again.

Thanks - JB