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Need to buy a new vehicle on the same day I close on my house

Established Member

Need to buy a new vehicle on the same day I close on my house

I have to sell my Truck to lower my DTI to get a mortgage. What sucks is that I am going to lose all the tax value that is in my truck. I am thinking I should buy a new vehicle on closing day.  Does anyone have any suggestions or experience doing this?

Message 1 of 16
15 REPLIES
Frequent Contributor

Re: Need to buy a new vehicle on the same day I close on my house

Lose the tax value?
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Message 2 of 16
Established Member

Re: Need to buy a new vehicle on the same day I close on my house

In Georgia you pay taxes up front and then $20 a year on every vehicle. When you trade in a car you carry over the taxes you paid to the new vehicle. So by just selling the vehicle and then buying a new one a few weeks later, I would lose around $2800......those are taxes I would have to pay again on the new truck.
Message 3 of 16
Established Contributor

Re: Need to buy a new vehicle on the same day I close on my house


gravytrain912 wrote:
In Georgia you pay taxes up front and then $20 a year on every vehicle. When you trade in a car you carry over the taxes you paid to the new vehicle. So by just selling the vehicle and then buying a new one a few weeks later, I would lose around $2800......those are taxes I would have to pay again on the new truck.

Most states are similar, provided you are trading in a vehicle . . then you just pay tax on the net balance on the purchase that day.

 

Here's the thing though . . . if you sell your vehicle outright, you are going to get significantly more $$ for it than a dealer would give you on a trade.

 

If you can get $2800 more selling private party than a dealer would give you on a trade in, it's really a wash.

Ch 7 Discharge May 2015: EQ 588/TU 552/EX 570
Nov 2017: EQ 683/TU 660/EX 668 w/ 24% CC util reporting
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Message 4 of 16
Established Member

Re: Need to buy a new vehicle on the same day I close on my house

I have it listed on cars.com for 4k over what carmax offered me, which is kbb private sale value. I also have a paid off mini van I can drive for a couble weeks. It sucks but I am willing. Do you think I should apply for Penfed and DCU loans right after closing? just trying to get a game plan together. my fico 8 scores are 761,776 and 761....

Message 5 of 16
Established Contributor

Re: Need to buy a new vehicle on the same day I close on my house


gravytrain912 wrote:

I have it listed on cars.com for 4k over what carmax offered me, which is kbb private sale value. I also have a paid off mini van I can drive for a couble weeks. It sucks but I am willing. Do you think I should apply for Penfed and DCU loans right after closing? just trying to get a game plan together. my fico 8 scores are 761,776 and 761....


If you get the $4k over, I see you coming out $1200 ahead on this Smiley Happy

 

I would personally drive the paid off mini van for a while. Get used to your new expenses . . . make sure the house doesn't need any unexpected spends . . save some money . . finance another vehicle down the road.

 

 

Ch 7 Discharge May 2015: EQ 588/TU 552/EX 570
Nov 2017: EQ 683/TU 660/EX 668 w/ 24% CC util reporting
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards - $46k total revolving
Message 6 of 16
Established Member

Re: Need to buy a new vehicle on the same day I close on my house

I have a catering business that I take a huge amount of write offs on my taxes, thats why I need to sell truck because my income is low on paper. The mini van is usually driven by an employee. I frequently have events going on at the same time....2 vehicles is a must. The Mortgage will reduce my monthly expenses by $925 and my 45000 renovation investment and home purchase will yield me 140000 in home equity when its all said and done.

Message 7 of 16
Established Contributor

Re: Need to buy a new vehicle on the same day I close on my house

I hate car payments so am always going to try and keep folks out of them, but if you're going to go for one just make sure everything is DONE DONE DONE with the mortgage before your apply.

 

Congrats on the home purchase and good luck!

Ch 7 Discharge May 2015: EQ 588/TU 552/EX 570
Nov 2017: EQ 683/TU 660/EX 668 w/ 24% CC util reporting
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards - $46k total revolving
Message 8 of 16
Established Member

Re: Need to buy a new vehicle on the same day I close on my house

Thx!

Message 9 of 16
Established Contributor

Re: Need to buy a new vehicle on the same day I close on my house

So what Steeler is saying is that depending on whether it is a wet or dry closing state you may not have table funding at closing and there may be processing in the works after "closing" . Make sure that is done before applying for any credit.
Message 10 of 16