How Much Tax and Fees Are on a Used Car

How Much Are Dealership Fees on a Used Car?

A cheap used car can be quite dependable and well-equipped. Plus, it can even cost less than buying a new vehicle depending on which you choose. However, there are still a few used car dealer fees you'll need to pay before you can drive home.

When you're budgeting for your used car, it's important to make sure you're considering any extra fees required for your purchase, so you can find the best vehicle for you. In short, you will need to pay title and registration fees, used car sales tax, and documentation fees. To help get a better idea of what you'll need to pay when you're ready to buy, here's a closer look at the used car buying fees you should pay. After checking it out, browse our entire cheap used car inventory online.

1. Title Tax & Registration Fees

How Much Are Dealership Fees on a Used Car? When you buy a used car, you'll need to transfer the title and register the vehicle in your name. Overall, working with a dealership can make the process simple, but you'll still need to pay some fees to have everything done.

You'll also need to pay a registration fee for every year you own the car to get it renewed. There are many states that vary the fees based on the weight, age, or value of the vehicle. Other states have one flat fee, including:

Delaware
Georgia
Kentucky
Massachusetts
Pennsylvania

The title and registration fees you'll need to pay for your used car will depend on where you live. For example, Texas drivers will need to pay around $20 to $30 for the title and $30 to $50 for the registration as well as other state and county fees. For Massachusetts drivers, they'll need to pay $75 for a title fee and $60 for a registration fee.

2. Used Car Sales Tax

Used car sales tax is something all drivers must pay when they purchase a pre-owned vehicle. Most states have a sales tax applied to the items you purchase. Typically, the tax you end up paying will be based on the state you're buying from. However, this isn't the case with vehicle purchases.

The automobile sales tax will be dependent on the state where you live, not where you buy it. For instance, if you buy a used car in Pennsylvania and live in New Jersey, you'll need to pay the 6.625% sales tax for New Jersey instead of the 6% sales tax for Pennsylvania.

This is where choosing to buy used can be a major benefit. The overall price of a used car is typically less than a new one. In turn, the sales tax you're paying on that price will also be less, so it'll be even easier to fit this fee into your budget.

3. Documentation Fee

How Much Are Dealership Fees on a Used Car? Depending on the state, you may need to pay a documentation fee before driving home in your used car. Paying the documentation fee means the dealership can provide you with all the paperwork you need for your purchase. It will also cover most of the dealership preparation of the contract and any other paperwork that may be involved.

The documentation fee covers the dealership's cost of the following:

Sending paperwork to the DMV
Title
Contract
Financial offer
Registration
Paying back-office employees

While it is a common used car buying fee, only some states regulate documentation fees. With that said, it's best to ask the dealership you're buying from if you want to learn more about this charge.

4. Insurance

You need to have insurance on the used vehicle you buy before the dealer will let you drive it off the lot. If you already pay for insurance, chances are, you'll be good to go. If not, you'll need to start paying for it before you head home in your pre-owned car.

The cost of insurance can range greatly depending on a wide array of factors. They include:

State you live in
Age
Driving record
What's being covered
Condition of the vehicle

If you finance your used car, you'll need to purchase full insurance coverage. This will cover the vehicle in an accident whether you are at fault or not. It also includes credit insurance that covers your loan if you are no longer able to make payments.

5. Hybrid/Electric Vehicle Fees

If you choose to buy a used hybrid or electric vehicle, you can expect to pay less or possibly no fuel taxes at the pump. That's why in some states, you'll need to pay extra fees when purchasing a hybrid or electric vehicle.

As hybrid and electric vehicles set the tone for the future of the automotive industry, however, many states have done away with these fees altogether. Some of them include:

Delaware
Florida
Maine
New Jersey
Rhode Island

Even in states where these fees are required, they are easily offset by the time and money you'll save by fueling up less. You'll also have the peace of mind that comes with driving an eco-friendly used car.

What's the Difference Between Sticker Price and Out-the-Door Price?

The sticker price is what the dealership is charging for a used car. The out-the-door price includes the sticker price plus all the additional used car buying fees you'll need to pay.

The easiest way to make sure your used car purchase will fit into your budget is to simply ask the dealership what the out-the-door price is before coming to terms on any kind of deal.

Our dealership has a team of financial professionals that will work with you to determine if the out-the-door price works with your lifestyle and your budget, so you can hit the road in your dream car in a snap.

How Much Will I Pay in Used Car Buying Fees?

If you're in the market for a pre-owned vehicle, you'll probably have to pay a few used car buying fees. Fortunately, working with a dealership like Val-U-Line^®can make understanding and paying all necessary taxes and fees easier and more convenient!

For more information about these and other used car buying fees, get in touch with our team of experts or visit any one of our nationwide pre-owned dealerships today!

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