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You're paying the sales tax on the credit used to buy the car. This what I'm getting from this.
I buy a $22,000 Camaro LS and use a 3,500 CARS credit. So I pay 18,500, but have to pay the sales tax on the full purchase price.
So I'd be paying 324 dollars more in sales tax than if the car was taxed at $18,500. (9.25% sales tax for me)
Not really as big deal as everyone is making it out to be. Also the majority of the clunkers aren't worth more than 1500. Theres a few nice cars in the mix, but most are; unreliable, dirty, leaking, smelly, torn, oxidized, oil burning, eyesores that needed a good crushing.
If I had a 93 Aerostar that smelled like a locker room I'd probably take 3500 or 4500 minus 9%. Better than next to nothing.
Also if I was buying the car without the credit I would have to pay full sales tax anyways.
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