How to Avoid Paying Sales Tax on a Used Car?

Car key & credit card on a signed contract

 


Sales tax increases the price of a pre-owned model considerably, so it is understandable that Richmond shoppers often ask how to avoid paying sales tax on a used car. Generally, car buyers by law are required to pay sales tax, but there are a few exceptions depending on the driver, location, and the car. Short Redmond SuperStore is your team of Lexington used car experts, who can tell you more about sales tax on used cars and the scenarios in which it isn’t required below!

Which States Don’t Require Sales Tax on Used Cars?

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

  • Alaska
  • Delaware
  • Montana
  • New Hampshire
  • Oregon

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. Keep in mind, 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 with 90 days of moving.

What are Some Used Car Sales Tax Exemptions?

How to avoid paying sales taxe on a used car is generally through 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:

  • 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 car in the Winchester area!

Tax Credits for EVs Can Outweigh Sales Tax

Purchasing an electric vehicle can help you save on taxes. However, 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. Another tip is to be familiar with the rules and regulations involving federal and state tax credits for EVs before buying an electric vehicle, regardless of where you live.

Find Your Pre-Owned Ride at Short Redmond SuperStore Today!

Select your new-to-you vehicle from our Lexington lot today and then our finance experts can help you secure a favorable plan. If you have any questions about used car shopping near Danville, be sure to reach out to us and we will answer them for you!

 

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