Quote:
Originally Posted by Frank Miller
Just a thought. If one took the 40k cash they could probably negotiate a 2018 pickup with a list of 55k and only be taxed on 40k instead of 55k.
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I think if your goal is a new truck, then selecting the truck option is probably the better choice since you'd get to "design" the truck that you want. I don't think you'd be able to negotiate a dealer down to $40k on a $55k MSRP truck unless it's been sitting on their lot for a long while.
Here's a theoretical scenario.
$55k taxed at 30% = $16.5k taxes out of pocket
$40k taxed at 30% = $12k taxes deducted from winnings
$40k - $12k = $28k net winnings
Working out the math to purchase a truck using your net winnings:
Assume you negotiate a dealer down to $46k on a $55k MSRP truck that's sitting on its lot (local dealers are currently at $48k after discounts and rebates). Keep in mind that this means no getting to pick the exact options you want, as you'd be able to do with the raffle truck.
$46k - $28k = $18k, which would need to be paid out of your pocket to the dealer.
$18k out of pocket > $16.5k out of pocket.
Plus you likely aren't getting a truck that's optioned exactly as you may want.
In both cases you'd also need to pay your state's title and registration taxes/fees.
Of course, YMMV.
Personally, if I were to win, I'd probably take the $40k, and then use the net amount on shop tools and parts to finish my '32 pickup.