Truck Buying New vs Used?

[Larry&Donna-AK]

I've been reading more people are considering buying New and/or gently used to avoid the 12% FET and thought we could share information and my experience of buying a 2017 Volvo 42T780 to my specifications.

FYI: I don't claim to know anything about the Commercial Trucking industry, all I can do is share my experience.

 

It's been a year since I was bashed by the group when I announced that I bought my New Volvo and wasn't required to pay the 12% FET which discouraged my sharing.

[DanBree]

We are in the process of buying a used truck. I wouldn't consider a new truck, not because of the FET, sales tax, issues, but because of the break-in needed for its long term health, and the value loss all vehicles incur the moment you drive it off the lot.

 

Hope to see your new truck on the road sometime.

[sclord2002]

Larry, how did you avoid the FET ? I don't think we should pay any more taxes than we have to. If there is a legitimate way to avoid or reduce taxes, I am all for it. Be safe, Charlie

[GeorgiaHybrid]

We were not able to avoid paying the FET tax even though the build sheet called us as recreational use only, not for commercial service. I even tried to have the GVWR reduced to get under the weight limit.

 

What we found out is the government now uses the capacity of the components that make up the truck to decide if the weight is over the limit where the excise tax comes into play.

 

In other words, they will say a 23K rear is 23K even if you have it down rated to 19K. The dealer can hide that in the price they sell it for but we tried working a deal with Freightliner and Kenworth at the start of our quest for a new truck and hit the same dead end with both.

 

You would be surprised at how much of a margin they have on those trucks though and that amount could be hidden in the price very easily.

[Heavymetal]

We are in the process of buying a used truck. I wouldn't consider a new truck, not because of the FET, sales tax, issues, but because of the break-in needed for its long term health, and the value loss all vehicles incur the moment you drive it off the lot.

DanBree,

We found a demo with 52k that had been titled to the dealers LLC so it had had the FET already paid. The funny thing is they had a few of them but they did not advertise them on the web. When my I mentioned to the salesman that I refused to pay the FET and would wait 6-12 months for them to start hitting the market used he said well if you don't mind a used one we do have demo's. He was under the impression that I had to have brand new but what I really wanted was one that was still under warranty for the next few years.

[Drift]

My research indicates that the IRS must approve all non FET purchase request by a buyer of a new truck. The purchaser must provide the dealer the IRS approval control number to legitimately eliminate the FET. The request can be made by a company or individual directly with the IRS via form 637, although I have not found anyone who has successfully completed this process yet.

[13speed]

I've been reading more people are considering buying New and/or gently used to avoid the 12% FET and thought we could share information and my experience of buying a 2017 Volvo 42T780 to my specifications.

FYI: I don't claim to know anything about the Commercial Trucking industry, all I can do is share my experience.

 

It's been a year since I was bashed by the group when I announced that I bought my New Volvo and wasn't required to pay the 12% FET which discouraged my sharing.

 

 

You started a thread to share your experience and then didn't share it I am not in the market for a new truck but might be in a couple of years after I get the trailer paid for. I would have loved to buy new. Even with the low mile clean newer truck I bought there is still a long list of expensive things to fix both cosmetic and non safety related mechanical items.

 

There is always someone on the internet to dog you about the choices you make. Some is out of stupidity and some stems from jealousy but don't let the few jerks discourage you from sharing and helping those that do want to share and learn.

[Big5er]

Larry, they were really just jealous, they weren't bashing you. I know I'm jealous of anyone that can afford a "new" truck. I bought a great 5 year old truck in 2010 and then paid for the build. Paying cash that was an "investment" for me. I don't even want to think what a new one would have cost.

 

EDIT...I missed Chris's post about jealousy....lemme bash him for using my theory of the crime before I could ?

[Larry&Donna-AK]

First, let me say we decided to change from a Newmar 40' Motorcoach and I was like everyone else trying to find a Truck to Convert and register as a "Motorhome".

 

Eventually we visited a Volvo dealership, Boise, ID, to look at another used Truck, the AD said clean 64T780 510,000 miles. It was not clean therefore not for us.

After being disappointed, again, I asked the questions: Can we buy NEW? Being out of my expertise and since we are not buying a tractor but a non commercial Motorhome will we have to pay the Commercial Tax, 12%FET? The answer from the sales department was "I don't know, let's find out". This was a key step in buying, afterall you're asking the dealership to step out of what is normal for them.

Then the question for me was, Who governs FET? I discovered IRS Publication 510 Chapter 6 provides the rules for this tax with exemptions and exclusions for certain vehicles. There is a paragraph that exludes Recreational Vehicles. Remember, we are buying a non commerical motorhome not a truck/tractor. In my opinion this is key and a hard concept for most people and dealerships.

Anyway, the short version is I personally talked with the governing IRS office responsible for Publication 510, explaining that we are attempting to buy a new vehicle, that is normally considered Commerical use, for Recreational Vehicle Use Only. I explained in detail the make and model of our Volvo to the IRS. The IRS confirmed we were excluded from the FET because of use.

After receiving the IRS green light we proceeded to create our build sheet. I never considered the gross weight or any other work arounds. However I eliminated 5er hitch, only for cost savings. Our Volvo arrived with manufacturers label stating Model "42T780" "Incomplete Vehicle manufactured by Volvo". We then proceeded to Herrin SmartBed installed that completed our Volvo, "Motorhome". After some debate with my State DMV and being confirmed we were not commercial by the State Commerical Enforcement Division we registered our Volvo as a "Motorhome"

 

Also it was suggested the dealership mark up covered the cost of the FET, truthfully I don't believe this because of the open discussion, the IRS conversation, and research we put into our order, we are extremely happy with the final negotiated price.

[Larry&Donna-AK]

We are in the process of buying a used truck. I wouldn't consider a new truck, not because of the FET, sales tax, issues, but because of the break-in needed for its long term health, and the value loss all vehicles incur the moment you drive it off the lot.

 

Hope to see your new truck on the road sometime.

I'm not overly concerned with "value loss" because this is my last RV tow vehicle, I have a factory warranty, and my research reveled a newer moderate mileage 64T780 converted (no warranty when converted) will have a comparable price to what I paid.

[Larry&Donna-AK]

Larry, they were really just jealous, they weren't bashing you. I know I'm jealous of anyone that can afford a "new" truck. I bought a great 5 year old truck in 2010 and then paid for the build. Paying cash that was an "investment" for me. I don't even want to think what a new one would have cost.

 

EDIT...I missed Chris's post about jealousy....lemme bash him for using my theory of the crime before I could ?

You provide some good information, whether or not I use it is a different story thanks.

One thing is the "Not for Hire" & using LLC. As stated in a different thread I would only use "Recreational Vehicle Use Only" and will not use LLC, afterall that is the bottomline reasoning to why I didn't pay FET, being a non commerical recreational vehicle.

[Larry&Donna-AK]

My research indicates that the IRS must approve all non FET purchase request by a buyer of a new truck. The purchaser must provide the dealer the IRS approval control number to legitimately eliminate the FET. The request can be made by a company or individual directly with the IRS via form 637, although I have not found anyone who has successfully completed this process yet.

Apples and Oranges. You're using a Commerical Use form to exempt the Commercial Vehicle from the FET. My approach is to Forget "if it looks like a duck" duck rules apply, think duck rules don't apply if it's only a Recreational Vehicle, the rules are different.