How to Figure the Amount for Tax, Title and Registration When Purchasing a Car
You are ready to purchase a new or used car. The purchase price is not the only thing you need to consider. There are many other financial obligations that come with the purchase of a car. Here is how you can figure to amount of money needed for tax, title and registration when purchasing a car.
Fees for taxes, title and registration vary by state. Taxes are added to the total price of the vehicle in every state, except Alaska, New Hampshire, Delaware, Oregon and Montana. Talk with your dealership because many times additional taxes for city, county and municipals are also added to the total tax due for your new or used vehicle purchase.
Use a reputable search engine such as Google, Yahoo or Ask to search for your specific state’s tax. If you are not in one of the no tax states, then your taxes may be as little as 2.9% if you are in Colorado to as high as 8.25% if you are in California. Multiply this figure by the total purchase price to get the amount of taxes you will need pay on the vehicle. For instance, if your new vehicle cost $10,000 and you live in California, you will pay an additional $825 in taxes.
Title and registration fees are also set by the state in which you reside, but average around $100 each. If you live in Illinois and travel to Missouri to purchase a vehicle, you will have to pay the title and registration in your state. Many out-of-state dealers will not charge sales tax, but you will be required to pay the sales tax in your home state when you register the title. Again, use a reputable search engine such as Google, Yahoo or Ask to search for your specific state’s registration and title fees. These fees are paid separately through a title or licensing company. To get the exact cost, find a reputable company in your area by searching the communities of MerchantCircle. Any licensing or title company listed with MerchantCircle will be able to help you calculate the exact figures for your state.
Remember that the monthly cost of a vehicle may only be calculated on the sale price of the vehicle. The taxes, title and registration fees are usually paid in one lump sum in addition to the monthly cost of the vehicle. This lump sum may be over $1,000. You need to be prepared for these costs before purchasing a car.