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Costs of Buying a Used Car

Date posted: 07/09/2012

by Kathy Teel on
in Buying & Selling

1592 Costs of Buying a Used CarYou negotiated a price for a new-to-you used car, and it sounded pretty fair…at first. Now you’re looking at the list of fees; with the sales tax, car insurance, and other fees, you might wonder, “Just how much am I going to end up paying here?”

Used Car Taxes and Costs

Here’s a breakdown of the used car taxes and costs you can expect when you buy a used vehicle.

Vehicle Registration Fee

The state charges this fee to register a car, assign a title, and cover the cost of licensing. If you buy the car from a dealer, he or she will usually take care of the vehicle registration fees in the office. Also determine if your state requires smog and emissions testing and whether the seller is responsible for providing a smog certificate (having passed an emissions check).

Auto Sales Tax

The auto sales tax for a car works the same as the taxes you pay on anything you buy in a store, except the percentage on a car is significantly higher.

Document Fee

The dealership charges the document fee, sometimes called the doc fee, to file all the necessary paperwork. In some states, the document fees are capped, so the dealer cannot take advantage of a buyer.

Trade-In Sales Tax

Different states handle the trade-in tax differently – in some states, if you trade one car in for another, you receive a tax break; in others, you pay tax on the full amount of the new used car and the trade-in doesn’t affect the amount.

Dealer Fees

This is a catch-all title for fees that the dealer adds to the price of the car; “shipping and handling,” “dealer prep,” and “advertising” are three of the most popular dealer fees. The savvy buyer can often negotiate them away.

While shopping around, you might also consider ordering a vehicle history report for cars you’re seriously considering. In some cases, a seller might provide such a report. For more tips on making a smart purchase, check out our Used Car Buyers Guide.


About Kathy Teel

Kathy Teel is a freelance writer and editor, a sometime college instructor, and a perpetual student. She has written extensively in the areas of local law, business, politics, addiction and recovery, marriage and sexuality, parenting, education, and religion and spirituality. She is a founding member of her town’s community theatre and works with learning disabled children in her local school. She makes her home in Missouri with her husband, another writer/ editor/ student/ actor, and her three incredibly talented children. Kathy has been writing for a living since 2006, and would love to consider new projects. Contact her at More articles by Kathy Teel

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