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In NB, what should I know about trade-in tax benefit for car loans?
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Car Loan Glossary • nb

In NB, what should I know about trade-in tax benefit for car loans?

In New Brunswick, you absolutely benefit from a trade-in tax reduction when financing a car at a dealership. The Harmonized Sales Tax (HST), currently 15% in NB, is applied only to the *net price* of the new vehicle, which is the agreed-upon purchase price minus the value of your trade-in. This means you are not paying HST on the full value of your trade-in twice - once when you bought it, and again effectively by not deducting its value from the new purchase's taxable amount. This provincial tax policy significantly lowers the overall tax payable on your new vehicle purchase, directly reducing the total amount you need to finance. For consumers, this translates into immediate savings, a smaller principal loan amount, and consequently, lower monthly payments over the life of your car loan. This is a consistent and valuable incentive across many Canadian provinces, encouraging consumers to trade in their existing vehicles and making new car acquisitions more financially accessible. Always ensure the dealership clearly outlines this calculation on your bill of sale to verify the full benefit.

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