California Vehicle Sales Tax & Fees [+Calculator]
Sales tax can add hundreds or even thousands of dollars to a new car purchase. For that reason, many people wonder how they can avoid paying car sales tax and if buying a car out of state is an option.
While buying a car out of state may help you find the model you want for a great price, it won’t help you avoid sales tax. Car buyers must pay sales tax for the state they register the car in.
For Californians, this is tough news, as it is one of the most expensive states to buy a car. California sales tax is one reason it is so costly to purchase a car in this state.
Table of Contents
- How Much Is the Car Sales Tax in California?
- How to Calculate California Sales Tax on a Car
- California Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which City Has the Highest Tax?
- Which City Has the Lowest Tax?
- Car Sales Tax for Trade-Ins in California
- Car Sales Tax for Private Sales in California
- Tax on Rebates & Dealer Incentives
- California DMV/State Fees
- California Dealership Fees
- When Sales Tax is Exempt in California
- California EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in California?
Sales tax in California varies by location, but the statewide vehicle tax is 7.25%. Of the 7.25%, 1.25% goes to the county government. The local government, cities, and districts collect up to 2.5%. The sales tax also includes a $50 emissions testing fee.
How to Calculate California Sales Tax on a Car
To calculate the sales tax on your vehicle, find the total sales tax fee for the city. The minimum is 7.25%. Multiply the vehicle price (before trade-in or incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $20,000 with the state sales tax of 7.25%. $20,000 X .0725 = $1,450. $1,450 is how much you would need to pay in sales tax for the vehicle, regardless of if it was used, purchased with trade-in credit, or included an incentive.
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
California Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Buying used is a great way to save on the cost of a vehicle, but it won’t eliminate state taxes. The California sales tax applies to used and new cars. The state taxes are still 7.25% for used cars. Of course, this often means you’ll pay less in sales tax for used cars because the price of the vehicle is less expensive.
Which City Has the Highest Tax?
The state sales tax is 7.25%, but each city may have its own local taxes. Los Angeles County has the highest sales tax. The county charges 9.5% sales tax.
Some cities within LA County, like Culver City, charge even more. The sales tax for vehicles in Culver City is 10.25%.
Which City Has the Lowest Tax?
The least you can pay for sales tax in California is 7.25%. Several counties charge this minimum, including:
- San Benito
- San Luis Obispo
- San Mateo
Car Sales Tax for Trade-Ins in California
Those who trade in a vehicle will still have to pay sales tax. California state sales tax applies to the full price of the new vehicle. In essence, their sales tax does not consider whether or not you traded in your vehicle. For example, if you traded in a vehicle for $7,000 and applied that credit to a new vehicle purchase of $15,000, you will pay sales tax for the $15,000 full purchase price.
Car Sales Tax for Private Sales in California
The car buyer is responsible for paying sales tax during a private car sale. The buyer must pay the sales tax to the California Department of Motor Vehicles upon registering the vehicle.
Tax on Rebates & Dealer Incentives
Dealer or manufacturer incentives are common, and they encourage buyers to choose certain models. For example, a dealer may offer a $1,500 cash rebate on a $15,000 car, so the buyer would only pay $13,500 out of pocket.
Rebates and incentives do not change the sales tax for the car. In California, the sales tax is determined by the vehicle's original price before incentives are applied. In the example above, the buyer must pay sales tax for the initial price of $15,000.
California DMV/State Fees
When buying a car in California, there are additional fees the Department of Motor Vehicles may collect.
On average, DMV fees in California are $244.
- Title Fee: $0
- Registration Fee: $46
- Vehicle License Fee: .065% of the purchase price
- Plat Transfer Fee: $65
- Highway Patrol Fee: $23
- Smog Abatement Fee: $25 if your vehicle does not need a smog inspection
California Dealership Fees
Many California dealerships charge documentation fees. Doc fees cover the dealership preparation for handling the sales contract, tax documents, etc. They are different from other dealership fees.
Doc fees vary by the dealership and even by vehicle, but the average throughout the state is $80.
When Sales Tax is Exempt in California
Given the high price of California sales tax, car buyers are eager to find exemptions. The CA DMV outlines exemptions for the state tax code including:
- Vehicles purchased by insurance companies
- Court-ordered transfers
- Dismantled Vehicles
- Transfer on Death Beneficiary
- Family transfers
- Federal Government sales
California EV Rebates & Incentives
To incentive zero-emission vehicles, California offers incentives and rebates for electric vehicles. Car buyers can get a rebate of up to $7,000 on their plug-in hybrid electric vehicle, battery-electric vehicle, or fuel cell electric vehicle purchase as part of the Clean Vehicle Rebate Program.
The CVRP is a statewide program, but many California counties and cities may offer additional incentives.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
Frequently Asked Questions
What is the sales tax on cars purchased in California?
The state sales tax on vehicles in California is 7.5%. However, it may be higher than this in some locations based on local taxes.
Do I have to pay sales tax on a used car in California?
Yes, you must still pay sales tax on used cars in California.
Which city in California has the lowest tax?
Several California cities have the minimum state sales tax rate. Some examples of California cities with the 7.25% sales tax include Adelaida, Big Bar, Coppermills, and Douglas City.
Which city in California has the highest tax?
Los Angeles County has the highest sales tax rate at 9.5%, but some cities in the county have an even higher rate. Culver City in LA County has the highest rate at 10.25%.
Do I have to pay sales tax on a gifted car in California?
No, you do not have to pay sales tax on a vehicle given as a gift or inheritance. The title must have the word “gift” entered on it instead of a purchase price. The applicant must complete the REG 256 form as well.
How much is registration in California?
Car registration in California is $46. You must also pay a vehicle license fee of .65% of the purchase price.
Does a trade-in reduce sales tax in California?
Trade-in does not reduce the sales tax in California. Car buyers who trade in their vehicle will still need to pay tax on the full purchase price of the new vehicle.
How can I avoid paying sales tax in California?
Some car sales in California are exempt from sales tax, like gifts, inheritance, and more.