Not sure you understand what I was saying . . .
Hypothetical numbers here:
I buy a vehicle for $25,000
I have a trade in that the dealer has allowed $20,000
I pay taxes on the Difference between the price of the vehicle and the trade in value, so I pay taxes on $5000, and at 6.25%, that would be $325
Vs:
I buy a vehicle for $25,000
I put $21,000 in cash down, because I sold the vehicle I would have been trading in for more than the dealer allowed
I pay taxes on $25,000, which at 6.25%, would be $1562
Total price including taxes for the trade in deal would be $25,312, and subtract out the trade in allowance, the amount to finance would be $5312
Total price including taxes for selling the vehicle and putting the proceeds of the sale toward the purchase price, would be $26,562, and subtract the down payment of $21,000 and the amount to finance would be $5562
$5562 - $5312 = $250
So, in these hypothetical situations, if I trade in my vehicle, even though I get less for it on the trade in, the taxes are a LOT less, than if I were to sell the car for even more money and then had to pay the taxes on the full sales price of the car I was buying . . . and it would actually cost me $250 more to do that than by trading the car in . . .
Hope that makes sense . . .