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      New law offers tax break for trade-ins

      Starting December 15, 2013, a new law goes into effect giving drivers that want to trade in their vehicle the opportunity to put some extra cash in their pockets.

      The trade-in vehicle has to be worth at least $2,000.

      "The $2000 is the benchmark, so you get a trade difference on the benchmark. In other words $120," said Garry Tollefson, General Sales Manager of Marquette Public Service Garage.

      With Michigan sales tax at six percent, if you want to buy a car worth $30,000 you will pay $1,800 in sales tax.

      With the new law, even though your current car is worth $4,000, in 2013, you can only get a $2,000 reduction. You pay $1,680, a savings of $120.

      The tax cut will continue to increase each year by $500 until it reaches $14,000.

      "Your first credit is for $2,000; next year it goes to $2,500. It will take 24 years for you to get full credit, so a lot of these people that we're selling cars to right now will never see the full effect like Wisconsin with tax on the difference," Tollefson said.

      The Senate Fiscal Agency said, "...the vast majority of other states--including all of those surrounding Michigan--impose sales tax on the difference in vehicle purchases."