If I buy a used car, do I have to pay vehicle tax?

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Most likely.

Most states require residents to pay vehicle tax during the titling and/or registration process of a newly purchased used car. The sales tax is generally a percentage of either the purchase price or the value of the vehicle. West Virginia, for example, requires 5% of the purchase price; Texas, on the other hand, requires 6.25% of the vehicle’s value based on the Standard Presumptive Method.

Sometimes the sales tax for used cars is the same as the sales tax for new cars. For example, Indiana residents pay 7% whether the vehicle is new or used.

Keep in mind that your sales tax isn’t the only cost you’ll have to cover when you purchase a used vehicle. During the titling and registration process, you might also have to pay fees for:

  • Transferring the title
  • Registering the vehicle in your name
  • Transferring your license plates
Before you head out to pay your taxes and other fees, be sure to contact your state motor vehicle agency to get exact amounts as well as information about acceptable forms of payment.

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