Do You Have to Pay Tax on a Used Car?

February 26, 2019

While it would be great if car dealers were able to stock used cars that didn’t have any sales tax — unfortunately, that’s simply not possible.

Buying a car is a big-ticket item, and you should factor in the amount of tax to the total cost when determining how much you can afford to purchase.

Between state sales or tax and title fees, you could find yourself adding a pretty penny to the cost of your used car.

Here’s how to estimate how much tax you’ll have to pay on your next used car.

Estimate the Base Vehicle Cost

Since it’s always best to be prepared, estimate high when you’re looking at the vehicle.

You can often get a trade-in or other discounts but estimating high upfront allows you to plan more effectively for the final cost of your used car.

Determine the Tax Rate

If your state collects sales tax, simply find the rate of sales tax and multiply it by the cost of your vehicle to get the total tax due.

If you’re buying from another individual instead of from a dealership, you may be required to pay tax instead of sales tax — which is generally the same rate as sales tax.

Estimate Title, License and Registration Fees

Licensing and registration fees will need to come from your local Department of Motor Vehicles, along with the title transfer fee.

Your registration fee may vary based on the type of vehicle that you’re purchasing.

Add the costs together and you’ll have the total cost of your new vehicle!

Buying a used car couldn’t be easier when you’re working with the professionals at Auction Direct USA, your used vehicle superstore. What’s better, we even offer an online cost calculator that will help you determine what you can afford.