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

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

In Yukon, when you trade in your existing vehicle towards the purchase of a new one at a licensed dealership, you benefit from a significant tax advantage. The 5% federal Goods and Services Tax (GST) is calculated on the *net* price of the new vehicle, meaning the purchase price less the value of your trade-in. This effectively means you are not paying GST on the portion of the new vehicle's cost that is covered by your trade-in, directly reducing your taxable base.

This policy is a crucial financial benefit for consumers, as it immediately lowers the total amount you need to finance, leading to reduced monthly payments and less interest paid over the life of your car loan. While market conditions in 2025, such as the ongoing demand for quality used vehicles, can influence your trade-in's valuation, the underlying tax benefit remains a consistent and valuable component of vehicle acquisition in YT. Always confirm this calculation is clearly reflected on your purchase agreement to ensure you receive the full advantage.

References:

Related Topics: province topic yt

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