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How to Avoid Paying Sales Tax on a Used Car

car for sale sign on a used vehicle

 

While opting for a used vehicle instead of a new model helps save money, the law still requires you to pay sales tax. However, depending on the vehicle and state you live in, you may not have to pay sales tax on used cars. Learn how to avoid paying sales tax on a used car below. If you have any questions, please contact us online or at 478-387-3188.

When Sales Tax on Used Cars Isn’t Required 

There are a few states that don’t charge sales tax on new or used cars, which include: 

  • Alaska
  • Delaware
  • Montana
  • New Hampshire
  • Oregon

So, if you live in one of the states listed above, and plan to register your car in that state, you won’t have to pay sales tax. That being said, simply buying a car in a state that doesn’t charge sales tax won’t get you out of paying sales tax. If you’re planning to relocate to a state with no car sales tax, you can register your car in your new state of residency if you buy within 90 days of moving. 

What Are Some Used Car Sales Tax Exemptions?

In some cases, used car sales tax exemptions are granted, even if a person lives in a state that requires over 7% sales tax, such as California or Nevada. Legal sales tax exemptions are as follows: 

  • Vehicles that were made before 1973. They’re considered historic models. 
  • Vehicles made for forestry and agriculture. 
  • Certain individuals with a disability may qualify for a car sales tax exemption. 

If you do qualify for an exemption, make sure your exemption certified is clearly displayed on your vehicle! 

Tax Credits for EVs Can Outweigh Sales Tax 

Purchasing an electric vehicle can help you save on taxes. Keep in mind that you can’t use those tax credits when you’re purchasing the car. You’ll earn the tax credits with ownership, which will help offset the cost of the EV. Before buying an electric vehicle, regardless of where you live, make sure you’re aware of the rules and regulations involving federal and state tax credits for EVs. 

Explore Our Used Vehicles for Sale near Eatonton

Now that you know how to avoid paying sales tax on a used car, please note that there are many other ways to keep costs down. While you may be unable to avoid sales tax on used cars, Five Star Toyota of Milledgeville can help you make the most of your budget with a wide range of used vehicle specials. If you’re near Monticello or Gray and shopping on a tight budget, check out our high-quality selection of pre-owned vehicles under $15k

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