# How to Calculate Tax & Title Fees on a Used Car

Save

Most states charge sales tax and title fees when you purchase a used car. However, some dealers will try to squeeze out extra profits by fiddling with extra fees after you have completed negotiating the price of the car and you have let down your guard. To accurately calculate the sales tax, you need to know how your state taxes the value of your trade-in and dealer incentives as well as the sales price of your car.

### Things You'll Need

• Calculator
• Ascertain the final sales price of your car.

• Find out if your state taxes dealer incentives or not. For example, if your state taxes them and your new car's price is dropped by \$1,000 due to a manufacturer's rebate, you have to pay sales tax on that \$1,000, though it was not part of the sales price. Thus, if you paid \$23,000 after rebates, you would have to pay sales taxes on \$24,000.

• Check if your state offers a sales tax break for the value of your trade. If your state offers this tax break, you only pay sales tax on the difference between the price of the new car and the value of the old car. For example, if you are trading in a \$6,000 car to buy a \$24,000 car, and your state offers this tax break, you would only pay sales tax on \$18,000, not \$24,000.

• Find out what the state, local and county sales tax rates are for your area (see Resources).

• Multiply the sales tax rate by your taxable purchase price. For example, if the total of state, county and local taxes was 8 percent and the total taxable cost of your car was \$18,000, your sales tax would be \$1,440.

• Contact your state's department of motor vehicles (DMV) to determine how much it will cost to transfer the title of the vehicle and get license plates. These prices vary from state to state but are fixed within the state, regardless of the price of the used car.

## References

• Photo Credit car image by Goran Bogicevic from Fotolia.com
Promoted By Zergnet

## Related Searches

Check It Out

### How To Travel For Free With Reward Points

M
Is DIY in your DNA? Become part of our maker community.