This is probably a dumb question, but do you pay sales tax on a used car you purchase from an individual? I live in California if this helps. I have never purchased a used car before, need to know for my budget.
Typically you won't pay sales tax to the seller, but you'll pay sales tax to your state's tax assessor when you title and register the vehicle....at least that's the way it is in my neighborhood.
Typically you won't pay sales tax to the seller, but you'll pay sales tax to your state's tax assessor when you title and register the vehicle....at least that's the way it is in my neighborhood.
How does that work regarding the loan and such? Is there any way around this?
Vermont does have a sales tax on new and used car purchases. When I lived in NH, they had a yearly "use" tax, based on the value of the car, so you paid a decreasing amount each year (not sure if that has changed).
Does anyone have experience buying a registering a used car in IL, specifically if the price is >$35K. I moved here recently from CA and the IL DMV website is terrible.
As far as I can tell, if I buy a new car I pay a 9% sales tax, while if I buy a used car for about $40K I pay a $1500 fee. I don't quite see the logic of such a huge difference in taxes with new vs. used but I'm sure someone somewhere has a great reason for it.
Anyways, if anyone familiar with IL knows exactly what the deal is that would be great.
I looked into it further and I think I have the right information. Apparently if you buy it from a dealer you pay tax but if you buy it from an individual you just pay the fee according to their schedule.
Does anyone have experience buying a registering a used car in IL, specifically if the price is >$35K. I moved here recently from CA and the IL DMV website is terrible.
As far as I can tell, if I buy a new car I pay a 9% sales tax, while if I buy a used car for about $40K I pay a $1500 fee. I don't quite see the logic of such a huge difference in taxes with new vs. used but I'm sure someone somewhere has a great reason for it.
Anyways, if anyone familiar with IL knows exactly what the deal is that would be great.
I looked into it further and I think I have the right information. Apparently if you buy it from a dealer you pay tax but if you buy it from an individual you just pay the fee according to their schedule.
If you buy from a dealer you pay the county tax (usually 6% to 6.75%). If you buy a car from a dealer and they have a lower county tax than the county you live in you may see a bill from the local municipality some day for the difference. If you buy a car from a private party all you pay is $1,500 (no matter what the cost). Obviously if you can find a private party you are much better off. As for why? Well our DMV used to be run by the governor, who is now gonna go to jail because he sold licenses illegally for money and fried some innocent family (eight kids) in a van. Go figure.....Good Luck
Last edited by Comfortably Numb; 05-15-2006 at 11:58 PM.
Well , I guess no one answered your question . Since you live in California , buying a vehicle from a private party goes something like this.
If you pay cash for the car , DMV will ask you how much you paid for it. You will have a bill of sale and " Pink Slip " from the owner stating how much he sold it to you for. Be careful , when the owner sends in his release of liability for the car he gives them your name and states how much he sold it for. DMV will then charge you a " Use Tax " ( Sales Tax ) about 8% of the total purchase price .Car sells for $ 1000 ...you pay $ 80 bucks.
You then pay for your current registration ( only if the seller hasn't already done so ) If he has , you get the remainder of the year for $3.00
You must have a current smog certificate . Oh yes , before you can register the car you must have proof of current insurance .
If you get a bank , finance company , or credit union to finance the vehicle for you , they will incorporate all the above costs and list themselves as the leinholder , thereby keeping the " Pink Slip " until you have finished paying for the car. Thats it ! Good luck.
Also, if the seller is in California, it's his/her responsibility to get the car smog tested. If you buy one out of state, it's on your dime when you get the car home.
__________________ Steve
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1993 Torch Coupe A4 - gone
2000 MagRed Coupe A4 - gone
1985 Hotrod coupe - gone
2001 QS Z06 (wife's car) - gone
2002 QS Coupe Z51 6-sp - gone
2006 MS Coupe Z51 6-sp - gone
2011 SSBlue GS 'vert 6-sp
One other thing - if you buy an out of state car, be very careful about modifications. Many, like long tube headers and "open" air filters, will not pass CA smog requirements.
One other thing - if you buy an out of state car, be very careful about modifications. Many, like long tube headers and "open" air filters, will not pass CA smog requirements.
Does this apply to 2006 model year cars? You have to smog those as well?
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Question regarding used car purchases
