Business ProfileforOpenRoad Honda

One of the reasons for trading in a vehicle when buying a new one from a dealer rather than selling it privately and paying full price is the tax savings based on the value of the trade in and tax implications. An simple example:The full cost of Vehicle $53,000 if paid with no trade, taxes are ***@7% =$3710 + GST@5%=$2650 for a total of $6360 taxes. With a trade in value $22000, the taxes are $53,000 - $22,000= $31,000, *** $2170 + GST$1550 total = $3720 taxes This is a tax savings differential of $6360 - $3720 = $2640 This is how the agreement for sale should read. and has happened at other dealerships I have made deals with in the past.Open Road Honda in *******, now on ************, not Kingsway has a practice that deprives the customer of tax savings when making a trade in.What the do is they recalculate the trade in value downwards as such. They reduce the savings from the trade in value by the amount of the tax savings differential eg: $22,000 - $2640 = $19360. That's what they put on the sales agreement and calculate the sales tax on.They calculate the trade in value deduction this way. Appraised value $19360, Tax Credit Value $2640, Market value of trade in $22,000. Remember, the customer agreed to a trade in value of $22,000 and thinks the are still getting it with the "tax credit" deduction entered into the contract.The dealership explains it this way. We reduce the agreed to trade in value to create a tax credit (savings) between the taxes on vehicle where the customer would pay the taxes on the full cost of the car with no trade in and the actual taxes paid on the car with the trade in. In fact the customer has paid the taxes equal to the taxes on the full cost of the car without trade in.The customer looses the tax advantage and the dealership pads their bottom line at the cost of the customer. I'm sure most customers don't really understand the dealers underhanded practice. This may be fraud under both the *** and GST legislation.