[wparsons]

Hold up... when you say leased car and trade in in the same sentence it sounds like you're mixing things up.

If you owned the car (leased at one point or not) then you can trade it in, and you get that much off the price of the new car. If you were currently leasing it you didn't trade it in, you simply returned it at the end of the lease. In the lease scenario you didn't actually get money off the new car, you just returned the leased vehicle.

So in both cases, you get the different between the trade in value and the new car, but in the lease case the trade in value is $0 since you didn't actually own the car and didn't actually trade it in.

Look at your bill of sale and see what the amounts for new vehicle value, down payment and trade in amounts are. It doesn't matter what the dealership told you, it's the government that collects taxes. The only way the dealership can screw this up is if they put the trade in amount in as a down payment instead of a trade in.