California (CA) Vehicle Sales Tax & Fees [+ Calculator]
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’s 7.25% (plus applicable district taxes) sales tax is one reason it is so costly to purchase a car in this state.
California Car Sales Tax Key Takeaways Video
How Much Is the Car Sales Tax in California?
The sales tax on vehicles in California is indeed quite dynamic, reflecting a combined rate of state, county, and local taxes. The base rate across the state is 7.25%, with 1.25% allocated to county governments. Local governments, which include city and district jurisdictions, can levy additional taxes up to 2.5%, making the potential total tax rate as high as 9.75% in some areas.
In addition to this tax, California mandates a $50 emission testing fee, part of the state’s commitment to maintaining environmental standards and reducing pollution. This fee contributes to the regulation of vehicle emissions, ensuring that cars sold in California meet strict air quality guidelines.
One thing to note is that California taxes vehicles based on their purchase price, meaning higher-priced vehicles will incur a larger tax. It is crucial to account for these additional costs when budgeting for a vehicle in California, as they can significantly impact the total amount you end up paying.
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 Car 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%.
More On Los Angeles Car Sales Tax
When purchasing a car in Los Angeles, the cost of the vehicle isn’t the only thing to consider. A significant part of the overall expense is the car sales tax. Los Angeles, often known for its high costs, indeed has one of the steepest car sales tax rates in the state of California.
California’s state sales tax is 7.25%, but counties and cities have the autonomy to impose additional taxes. Los Angeles County charges a considerably higher sales tax rate, coming in at 9.5%. This means that when buying a car in Los Angeles, you should prepare for almost a tenth of the car’s price to be added to sales taxes alone.
But it doesn’t stop there. Within Los Angeles County, individual cities can levy a further sales tax. One of these is Culver City, where the ‘car sales tax Los Angeles’ rule is pushed even further. Here, the sales tax for vehicles is an even higher 10.25%.
In essence, when purchasing a car in Los Angeles, particularly in places like Culver City, it’s crucial to factor in these additional costs. Not doing so can result in a final price that’s significantly higher than the listed price of the car.
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:
- Alpine
- Calaveras
- Colusa
- Glenn
- Kern
- Kings
- Lake
- Lassen
- Modoc
- Mono
- Placer
- Plumas
- San Benito
- San Luis Obispo
- San Mateo
- Sierra
- Siskiyou
- Sutter
- Tehama
- Trinity
- Tuolumne
- Ventura
- Yolo
- Yuba
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
- Plate 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:
- Court-ordered transfers
- Dismantled Vehicles
- Gifts
- Inheritance
- Transfer on Death Beneficiary
- Family transfers
- Federal Government sales
California EV Rebates & Incentives
To incentive zero-emission vehicles, California USED TO offer incentives and rebates for electric vehicles. Car buyers could get a rebate of up to $7,500 on their plug-in hybrid electric vehicle, battery-electric vehicle, or fuel cell electric vehicle purchase as part of the Clean Vehicle Rebate Program, but they shut this program down at the end of 2023.
They do, however, have the Driving Clean Assistance Program (DCAP), a program that offers up to $14,000 for the purchase or lease of a clean vehicle, including EVs and plug-in hybrids (PHEVs). It also offers incentives for home charging equipment or public charging credit.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
