Sales Tax

Sales tax is a percentage-based tax charged on the purchase price of a vehicle, collected by the dealership or DMV and remitted to the state or local government. The rate varies by state, county, and city, ranging from 0% in some states to over 10% in others.

Sales tax applies whether the vehicle is new or used, and is usually based on the final purchase price after trade-in value is applied but before rebates in most jurisdictions. Some states also charge additional local taxes, making total rates higher.

Buyers should factor sales tax into their total cost of ownership, as it can add thousands of dollars to the purchase price. Certain buyers, such as military personnel or those registering vehicles in different states, may qualify for exemptions or reduced rates.

Understanding how sales tax is calculated and applied is critical for accurate budgeting during the purchase process.