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Like many states, Texas only requires sales tax to be paid on the difference between the price of a trade-in and the vehicle one is buying<\/a>. If you buy a new car for $25,000, for example, and trade in your old car for $5,000, you\u2019ll only be paying sales tax on $20,000. This is due to the fact that, if you think back to math class, 25,000 \u2013 5,000 = 20,000. <\/p>\n\n\n\n The trade-in sales tax benefit does not apply, however, if you simply sell your old vehicle yourself. The vehicle must be traded in at the dealership where you\u2019re getting your new ride. To take advantage, hit up a local dealership. Personally, we recommend one of our delightful Third Coast Auto Group locations!<\/a> \ud83d\ude09<\/p>\n\n\n\n The Texas sales tax for buying a vehicle is 6.25%. So, using our above example, if you buy a vehicle for $25,000, you\u2019d normally owe a sales tax of $1,562.50 (.0625 * 25,000). If you also trade in a vehicle for a $5,000 value, however, you\u2019ll only be paying a sales tax of $1,250 (.0625 * 20,000). That means you\u2019ve saved more than $300 in tax fees. Heck, that\u2019s enough to buy a Nintendo Switch.<\/p>\n\n\n\n As with most states, the automotive sales tax formula in\nTexas is: Taxable Value = Purchase Price – Any Trade-In.<\/p>\n\n\n\n![\"A](\"https:\/\/www.dealerfireblog.com\/thirdcoastautos\/wp-content\/uploads\/sites\/767\/2020\/05\/piggy-bank-on-dash-b_b.jpg\")
<\/figure><\/div>\n\n\n\nHow much is the sales tax on a new vehicle in Texas?<\/h3>\n\n\n\n