SUVs

Buying a Used SUV: Understanding the Taxes Involved


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Whether you are buying a used SUV or new, you will always have to pay a car sales tax. The new car tax or used car sales tax is tacked on to the final price of the vehicle you are purchasing from a dealer. The rules for private seller taxes differ by area and situation. Below is a guide to help you understand these taxes so you are better prepared for your next car purchase.

Who You Pay

Something you should know when you are out shopping for a used SUV is that the dealer generally does not include the car sales tax as part of the overall price they end up quoting you. This is because the money is due to the Department of Motor Vehicles and not the car dealership itself. Thus if you are on a confined budget, you need to allot additional money for taxes beyond the dealer price.

How Much You Pay

Most states do have a car sales tax that is a percentage of the actual sale price of the SUV you are purchasing. An example would be four percent sales tax on a $5,000 vehicle, which would mean that you would owe the DMV $200. The tax percentage can range from four to six percent depending on the state.

When You Pay

The buyer is the person that will be hit by the car sales tax of their own state. It does not matter what state you bought the car in. As soon as you take the Bill of Sale in to get the SUV registered, your local DMV will expect you to pay the sales tax on the vehicle you just purchased. 

What You Need

No matter how or where you bought the SUV, even from a dealer, your DMV will ask for a Bill of Sale at the time you are registering it. This will then show the price you bought the vehicle for, so the State can figure out the sales tax.

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