How Much Are Used Car Sales Taxes in California?
If you're thinking about buying a used car in California, sales taxes are a fact of life and will increase the total out of pocket you’ll spend on your vehicle purchase.
The current used car sales tax rate in California is 7.25% statewide. Some counties or municipalities also charge sales tax, so depending on where you live, the total rate could be even higher.
The current used car sales tax rate in California is 7.25% statewide. Some counties or municipalities also charge sales tax, so depending on where you live, the total rate could be even higher.
Do You Pay Taxes On a Used Car From a Private Seller in California?
If you buy a used car from a private seller in California, you must pay the 7.25% used car sales tax, plus additional city or county taxes, depending on where you live.
Local taxes can differ, with some cities charging more than others. For example, San Francisco now has a local sales tax of 8.5%, which makes the total sales tax rate 15.75%.
Other cities have a lower local sales tax rate, such as Long Beach, which has a combined sales tax rate of 10.25%.
Here is a table of used car sales tax rates for the top 20 metro areas in California:
Local taxes can differ, with some cities charging more than others. For example, San Francisco now has a local sales tax of 8.5%, which makes the total sales tax rate 15.75%.
Other cities have a lower local sales tax rate, such as Long Beach, which has a combined sales tax rate of 10.25%.
Here is a table of used car sales tax rates for the top 20 metro areas in California:
Los Angeles: 9.50% | Stockton: 9% |
San Diego: 7.75% | Riverside: 8.75% |
San Jose: 9.35% | Santa Ana: 9.25% |
San Francisco: 8.62% | Irvine: 7.75% |
Fresno: 8.35% | Chula Vista: 8.75% |
Sacramento: 8.74% | Fremont: 10.25% |
Long Beach: 10.25% | Santa Clarita: 9.5% |
Oakland: 10.25% | San Bernardino: 8.75% |
Bakersfield: 8.25% | Modesto: 7.87% |
Anaheim: 7.75% | Moreno Valley: 7.75% |
For a complete list of municipalities and their respective sales tax rates, see the California Department of Tax and Fee Administration website. They have an Excel spreadsheet you can download that lists nearly 1800 California cities and towns.
How is Used Car Sales Tax Calculated in California?
Sales taxes are calculated as a percentage of the car’s purchase price. However, some individuals will try to pay a lower tax by negotiating a lower purchase price and then doing a side deal. This won’t work.
If the car is sold for significantly less than its fair market value, the sales tax will be calculated using the car's fair market value rather than the purchase price. This is done to keep customers from avoiding paying the correct amount of sales tax by artificially decreasing the car's purchase price.
The California Department of Motor Vehicles (DMV) figures out what the car is worth on the open market by looking at the Kelley Blue Book or other reliable sources of information about used car prices. If the DMV concludes that the car's fair market value is greater than the purchase price, the sales tax will be assessed based on the fair market value rather than the purchase price.
It's crucial to note that if you acquire a car from a private party, you must declare the car's fair market value to the DMV and pay the appropriate amount of sales tax based on that value. Failing to do so may result in fines and penalties.
The California Department of Motor Vehicles (DMV) figures out what the car is worth on the open market by looking at the Kelley Blue Book or other reliable sources of information about used car prices. If the DMV concludes that the car's fair market value is greater than the purchase price, the sales tax will be assessed based on the fair market value rather than the purchase price.
It's crucial to note that if you acquire a car from a private party, you must declare the car's fair market value to the DMV and pay the appropriate amount of sales tax based on that value. Failing to do so may result in fines and penalties.
How to Avoid Paying Sales Tax on a Car in California?
Almost everyone wants to pay lower taxes. Unfortunately, like property tax, income tax, and other types of tax, California vehicle taxes are a part of life. If you’re buying a car in California, it is not possible to legally avoid paying the car sales tax—unless you meet an exemption.
The following tax exemptions for used vehicle purchases are listed on the California DMV website:
To qualify for these exemptions, evidence must be presented to the DMV.
If you plan to move to a state that has no sales tax, you could always wait to buy the car until after your move. Otherwise, we don’t recommend trying to avoid paying car sales tax, in California or elsewhere. The thousands of dollars you could potentially save are not worth the legal and financial consequences, nor the loss of your peace of mind.
The following tax exemptions for used vehicle purchases are listed on the California DMV website:
•
Gifts: if the vehicle or vessel was given to you as a gift—for example, one family member gifting a used car to another family member—you must write "gift" on the back of the title instead of the purchase price. To qualify for this exemption, the applicant must additionally submit a REG 256 form.
•
Inheritance: to transfer the title, the applicant must supply an Affidavit for Transfer Without Probate California Titled Vehicle or Vessels Only (REG 5) form or a REG 256 form from a surviving co-owner.
•
Death Transfer (TOD) Beneficiary: if the owner of a used car is deceased and a beneficiary is indicated on the title, the vehicle may be transferred without paying sales tax.
•
Vehicles transported under a Ten Day Trip Permit (REG 43): sales tax is not due if a vehicle is relocated under a temporary permission issued by the DMV.
If you plan to move to a state that has no sales tax, you could always wait to buy the car until after your move. Otherwise, we don’t recommend trying to avoid paying car sales tax, in California or elsewhere. The thousands of dollars you could potentially save are not worth the legal and financial consequences, nor the loss of your peace of mind.
Buy and Sell Used Cars on PrivateAuto
Conduct private car transactions easily and safely with PrivateAuto. Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments.
PrivateAuto allows you to negotiate the price you want, schedule the test drive meetup, and pay for the car—all within our app without compromising your personal information.
Whether you want to shop used cars for sale or sell your used vehicle for top dollar, PrivateAuto will help you get the deal done.
Get started with PrivateAuto today.
Here’s how you can sell your car in California with a few simple steps.
1. Gather necessary documentation
You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately handy, so you’re not scrambling to find it at the moment of completing a sale.
2. Register on PrivateAuto and get verified
To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.
3. List your car
Easily create your PrivateAuto listing with our step-by-step guide. Bonus: we include a window brochure with a QR code scannable to your listing.
4. Set your terms
It’s your car, so you drive the deal! You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified to your preference.
5. Vet incoming offers
Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal info is protected: no more giving out your phone number or email address. All communication happens in our app.
6. Choose a buyer
When you find an offer you like, accept it and proceed to the next step with that buyer.
7. Schedule a meeting
The buyer will want to look at your car. No more back and forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test driving and coordinate a time and place for meeting. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)
8. E-sign documents
After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.
9. Get paid, instantly
Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.
10. Transfer title
When you sell your vehicle, fill out the necessary information on the back of the Certificate of Title and sign in order to transfer ownership of the vehicle to the new owner.
PrivateAuto allows you to negotiate the price you want, schedule the test drive meetup, and pay for the car—all within our app without compromising your personal information.
Whether you want to shop used cars for sale or sell your used vehicle for top dollar, PrivateAuto will help you get the deal done.
Get started with PrivateAuto today.
Here’s how you can sell your car in California with a few simple steps.
1. Gather necessary documentation
You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately handy, so you’re not scrambling to find it at the moment of completing a sale.
2. Register on PrivateAuto and get verified
To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.
3. List your car
Easily create your PrivateAuto listing with our step-by-step guide. Bonus: we include a window brochure with a QR code scannable to your listing.
4. Set your terms
It’s your car, so you drive the deal! You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified to your preference.
5. Vet incoming offers
Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal info is protected: no more giving out your phone number or email address. All communication happens in our app.
6. Choose a buyer
When you find an offer you like, accept it and proceed to the next step with that buyer.
7. Schedule a meeting
The buyer will want to look at your car. No more back and forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test driving and coordinate a time and place for meeting. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)
8. E-sign documents
After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.
9. Get paid, instantly
Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.
10. Transfer title
When you sell your vehicle, fill out the necessary information on the back of the Certificate of Title and sign in order to transfer ownership of the vehicle to the new owner.
CA Used Car Sales Tax FAQ
Do I have to pay California taxes if I buy a car out of state?
If you buy an automobile outside of California and bring it into the state, you must normally pay California use tax (sales tax) on the vehicle.
The use tax rate in California is normally the same as the sales tax rate, and it is dependent on the vehicle's purchase price or fair market value, whichever is greater.
If you paid sales tax in another state at or above the California use tax rate, you may be eligible for a credit on your California use tax. Failure to pay use tax on an out-of-state vehicle can result in penalties and interest, so it's critical to follow California's tax regulations.
The use tax rate in California is normally the same as the sales tax rate, and it is dependent on the vehicle's purchase price or fair market value, whichever is greater.
If you paid sales tax in another state at or above the California use tax rate, you may be eligible for a credit on your California use tax. Failure to pay use tax on an out-of-state vehicle can result in penalties and interest, so it's critical to follow California's tax regulations.