Buying either a new or any used vehicle can be a major purchase, and often it may be complicated process too, but we have provided simple guidelines and following them any consumer can easily minimize or avoid common buying errors.
You may be buying your vehicle from anywhere but as a consumer you must know how to safeguard yourself from any fraudulent deal.
Certain unscrupulous seller will try to sell off his stolen vehicle, tamper the odometer to roll back mileage, alter the title, or sell car with extensive collision or water damage, which has not been repaired properly.
Buyers must be encouraged to carefully do their homework, not come under pressure into buying certain vehicle without doing any basic research.
Calculating auto sales tax if you are resident of Arizona
Every state has got its own rate for sales tax and it may vary based on type of the product purchased. Arizona sales tax on cars is not collected during vehicle purchase rather Vehicle License Tax will be levied against your vehicle.
The tax rate may vary depending upon whether vehicle is new or a used one.
Step 1
For new vehicle the tax rate will be calculated based on every $100 of your assessed value of vehicle, $2.80 and $2.89 for every $100 of assessed value of used vehicle.
Step 2
For assessing the value of your new vehicle, you must multiply 0.6 to its base retail price of your car.
Step 3
For old vehicle, determine for how many years vehicle was previously registered in Arizona. For each year, you have to reduce the price by 16.25%.
Calculating sales tax of new car
Step 1
This calculation will be based on state that you reside and on your total purchase price and purchase price after deducting any kind of vehicle trade-ins or certain cash incentives that have been deducted.
Step 2
Try to itemize various expenses done while purchasing the new car. This will include not only price of your car but even any transfer fee.
Step 3
Now add up all those expenses on which you may not be responsible for paying any tax. This will usually include the warranty costs and any other fees for document processing. Subtract it out of your amount that is taxable.
Step 4
Sum the total expenses for taxes that you must pay including insurance, title transfer and other costs for Motor Vehicles related to obtaining the new license plate for the vehicle.
Step 5
For new car purchase, find out rate of your state’s tax. Check whether in state where you live, cars are considered for tax-free purchases.
Now multiply the rate of sales tax percentage by price of the new car for obtaining your total sales tax bill of new car.
Tip
In case you buy a car from any other source who is not a dealer, like eBay or any other private seller, then the taxes that you will pay may be slightly different.
Try to check with any tax accountant to determine what the specific rules for your state are.
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