car auction tips

Sales Tax on Used Cars in California

If you are interested in purchasing a used car in the state of California, then you should understand the associated car sales tax. Whether you are purchasing your used car, truck, SUV, or van from an auto auction in California, a dealership or a private seller, there will be a sales tax levied on the purchase. Here is what you need to know about sales tax on used cars in California.

What Is the Car Sales Tax in California?

The state sales tax on a car purchase in California is 7.5%. Therefore, you will be required to pay an additional 7.5% on top of the purchase price of the vehicle. Let’s say you are going to purchase a used truck from a dealership. The purchase price of the truck is $30,000. The sales tax will be 7.5% of the $30,000 price. That means that you will have to pay a total of $2,250. That brings the final purchase price of the used truck – including tax – to $3,225.

How to Calculate California Sales Tax on a Used Car

You can calculate the sales tax in California by multiplying the final purchase price by .075%. Going back to the example in the previous paragraph. You can take the purchase price of the used track at $30,000 and multiply that price by .075. The equation will look like the following:

$3,000 x .075 = $225

When is Sales Tax Exempt in California?

The following events are exempt from the sales tax on used cars in Cali:

You receive the vehicle as a gift from a relative such as a parent, spouse or child, grandparent/grandchild.
You buy the used car in another state and bring it into the state of California within 12 months.
You receive the vehicle in a divorce.
The vehicle was inherited
You receive the vehicle from an individual’s revocable trust.
A court judgement provided it to you

Car Sales Tax for Trade-Ins in California

If you are purchasing your used vehicle at a dealership, then there is a chance that you are trading in another vehicle. Therefore, you may be wondering if the trade-in value is subject to the 7,5% sales tax. The answer is that the trade-in value is not subject to sales tax.

As an example, let’s say you want to purchase a used SUV at a dealership for $50,000. You are trading in your current SUV which the dealership gives a value of $10,000. That means the taxable amount on your used SUV purchase is now $40,000.

Tax on Rebates & Dealer Incentives

There is no sales tax on dealer rebates and incentives. So, for example, if you are purchasing a new SUV for $60,000 with a $5,000 rebate. You will pay sales tax on the $55,000 sales tax. However, you don’t have to pay sales tax on the $5,000 rebate. This also applies to dealership incentives.

Used Car Sales Tax on Private Sales in California

If you are purchasing your vehicle from a private party in California, then you may wonder if you need to pay the sales tax on the purchase. The answer is that all used car purchases are subject to the 7.5% sales tax. This tax is payable to the California Department of Motor Vehicles. Ultimately, it is the buyer of the vehicle who needs to pay the sale tax.

Note that once you have purchased your vehicle from a private seller, you have 30 days to pay your sales tax to the California Department of Motor Vehicles.

Understanding Used Car Sales Tax in California

Because the purchase of a used vehicle is a large transaction, you should know the associated sales tax. Remember that sales tax applies to dealerships and private party transactions. Be sure to consider the possible 7.5% sales tax that you may have to pay during the purchasing process.

5 Tips For Buying a Used Car in California

Buying a used car may be one of the smartest decisions you take but it has plenty of possibilities and avenues of failure. Depending upon how you approach it, you can either end up with a car that saves you a lot of money at the very outset while also serving you for many trouble-free years or you could end up overpaying for a piece of junk that constantly breaks down and only gives you headaches all the time. Thankfully, it does not take a rocket scientist to figure out if a used car is worth buying.

Figure out your budget: Be sure to include the price of any minor repairs and also sales tax on used cars in California.

Make sure that there are no major visual blemishes: Even if it is a used car, you will probably end up driving it for a reasonable amount of time. This means that you will have to live with it on a daily basis. To ensure that you can drive it regularly and take it wherever you need to go, make sure that there are no major imperfections. Start with a visual examination of the exterior and check for dents and scratches. A used car will have a few. Make sure that they are minor and barely noticeable. Pay close attention to the paint job. Ensure that there is no flaking or discoloration as a bad paint job can be very expensive to fix. Once you are satisfied with the exterior move on to the interiors. Check the upholstery and all the different panels to make sure that nothing is loose as a rattling panel or a smelly upholstery is the last thing you would want in a car. Make sure that everything is to your liking and that you can make it your everyday transportation option without making major sacrifices.

Review the history of the vehicle: This is perhaps the most important step here. A car can look really good both from the inside and the outside but can still be hiding major defects that are difficult to detect and fix. Cars that have been in huge crashes can be restored to look like their old selves but can still be hiding major problems with the structure and in the chassis. This will make it really dangerous if you are in the unfortunate event of a crash. The car’s history will reveal all such issues and allow you to take a judgment call on whether you should invest in the car. This is not something that should be taken lightly as it concerns your health and well-being as well as the health and well-being of anyone who would end up traveling in the car with you. This will also reveal any persistent issues the car might have had in the past allowing you to get a good grasp of what you would be putting yourself into if you were to buy the car.

Do a test drive to ensure drivability: It goes without saying that this should be very much on the list of things you should do before buying a used car. This helps you to know a few things that are absolutely necessary knowledge before spending your money on the used car. First, it will give you a fair idea of the general condition of the engine. Any rattling or unseemly noises are a good indication of a faulty engine. It will also tell you how well it has been maintained. If it revs unevenly or the gears don’t shift properly then those are good pointers of a car that isn’t in good shape. It will also tell you how responsive the steering is and how well the pedals move. All these are absolutely critical to the drivability of a car and ensure that the car ticks off all these boxes. It doesn’t end there. A car maybe mechanically all right to drive but it should also feel right. If you do not enjoy riding the said car then it is best to look for other options.

Ensure that you are paying a fair price: Buyer’s remorse is one feeling no one should experience as it is one of the worst feelings you could have. Since there is no standardization of the value of used cars, the final price comes down to how well you can bargain. A good starting point would be to go online and check out the usual price a used version of the car that you are looking at sells for. Then look at the specific car and do a quick mental calculation of all the costs you would incur to get it into running condition. It could be anything from changing the brake pads to a full servicing. Factor all of these and see if the price the used car is being offered at is justified or not. If not try to negotiate a price that is more in range with your calculations and if the price is not reduced then look for other options as the last thing you want to do is overpay for a used car.

Have it inspected by a mechanic: This is also vital to ensure that the used car is not hiding any dirty secrets. Every used car will need some type of work done on it to make it “your” car. How much of this work is needed decides how good of a bargain it is. While you can get a fair idea of the general condition of the car, you need a mechanic to truly understand what you are getting yourself into. They can make a fair assessment of the various flaws on the car. Usually, this will cost you some money but it is minuscule compared to what you might have to spend if the car ends up having major issues. With a professional’s opinion you can rest easy that your decision was a wise one. You can also get a good idea of how much extra cost would be incurred allowing you to decide if it would fit into your budget or not.

Five Reasons to Buy a Car at a Car Auction in California

If you are looking to buy a car or truck in California, you really should consider a local car auction that is open to the public. These auctions are a great way to save money when buying a preowned vehicle. Remember: most auction locations allow you to buy a car without actually bidding in the auction. The process is similar to buying a car at a used car lot – but without the hassle of high-pressure sales tactics. The cars come from a variety of sources, including: local car dealers, private owners, government seized and impoundment vehicles, bank repos, and more.

1) It is a really fun way to shop for a used car

So you’re probably already at least a little bit curious about how public auto auctions in California work. First of all, it can be a really fun and exciting experience so do not hesitate to visit a location near you and see for yourself.

2) It is a much safer way to find a used car than Craigslist or other online methods

Public auto auctions provide a safe location for buyers and sellers to conduct their business. Online markets, such as Craigslist Autos, can attract unsavory people that prey on unsuspecting buyers. All car buyers and sellers on auction property are registered with the front office so that their is less anonymity in the car buying process. This means a more reliable, safe transaction so that you can focus on other details.

3) Public Auctions Offer a Large Selection of Cars and Trucks at a Single Location

Instead of driving all around town from car lot to car lot, you can choose from a larger selection of vehicles more conveniently. This can help speed up the car buying process for you and save you some time. Sometimes, buyers will compromise and make a purchase that they are not satisfied with simply because they are exhausted with the process. An auto auction can help relieve some of that pressure by offering a diverse inventory.

4) You Can Use Outside Resources For Financing a Car From an Auto Auction

It is possible to use your bank of choice to provide financing to you for a car you buy at an auto auction. It is important to get the vehicle approved by your bank beforehand. Also, it is not necessary to bid on the car during the auction – you can always just make an offer and purchase it on the spot without waiting for the auction to start. Most locations will also allow you to do this on non-sale days. Contact them before arriving to verify their policy.

5) Buy a Car Without Dealing With Pushy Sales Staff

Auto Auctions are great for buyers that know what they want in a used car and do not wish to be pressured by someone else into spending more than they can afford.

Here are some useful links to get you started:

California Auction Buyer’s Guide

Auto Auctions in California

Online Auto Auctions

Why You Should Buy a Car at a Car Auction

Buying a used vehicle at a car auction in California is a lot easier than most might think. There are many auction locations around the state. Be sure to check out our guide for auction buyers. Below are just a few reasons to buy a car at an auction:

Most car auctions have hundreds of cars at a single location

Auctions offer a lot of convenience to car buyers with their large, varied inventories. Anything from cars, trucks, vans, SUVs, to motorcycles, boats, and ATVs are commonly found in auto auction inventories around California. Also, car auction inventories tend to have vehicles that sell quickly, with more arriving throughout the week. If you do not see what you want during your first visit, you might fight the perfect car at an auction a week later.

Auctions are a great way to find the cheapest used cars in your area

Auction cars can come from a variety of sources: local used car dealers, private owners, lease and rental vehicles, trade-ins, bank repos, police impounds, among others. They are often sold at wholesale, or close to trade-in value. This means you do not have pay retail, aka “sticker price”, for a used car or truck with a dealer’s markup in the price. In fact, car auction prices are probably the most appealing aspect of car auctions for public buyers.

Car auctions can be a lot of fun, even for first-time buyers

Public car auctions tend to move at a slower pace than dealer auctions. They are not as intimidating as some people imagine them to be. If you insist on not bidding during the auction, many locations will allow you to make an offer and buy a car before the auction begins. Most auctions offer lobbies and play areas for children. Auction staff are trained to accommodate first-time auction buyers by helping you throughout the auction process.

Many car auctions in California offer financing

Most auction buyers assume that car auctions are only for cash transactions, but it is very common for car auctions to offer vehicle financing to auction buyers. It is also possible to use your own bank or credit union as a source of financing in order to buy an auction vehicle.

Remember, you can also bid on auction cars in an online car auction in California. Bidding at home or work can be a lot less stressful, but be sure to learn all the details about the car or truck you want to bid on. Most auctions do not offer refunds after the bidding is over.