Arrie

It is taxed because they can do that!
But, at least in some states, you don't pay tax for the full car price if you trade on old car in for the deal. You pay tax only for the money paid between the cars.

LasVegasMike

That's how it is here in Nevada, we don't pay the the full tax with a trade in. We also get registration fees prorated towards the new car. or instance I had about 6 months until my registration was due on the Hummer I turned in, so when I register the Mercedes they will prorate me that 6 months against the Mercedes registration. In Calif where I used to live you lose any remaining registration time.