When buying a used car in Colorado, don’t get caught off guard by the state’s vehicle sales tax. Vehicle sales tax rates in Colorado are 2.9%.
Colorado’s 2.9% is charged on your vehicle's purchase price. On top of that, you may owe local taxes as well. And then there are the fees.
Keep reading to get the scoop on vehicle sales taxes and fees in the state of Colorado.
Do you Pay Taxes When you Purchase a Car From a Private Party in Colorado?
When making a car purchase in Colorado, you’ll pay 2.9% of the vehicle’s purchase price, whether you buy from a private seller or a car dealer. Colorado tax law does not discriminate between the two. Unless you qualify for a tax exemption (discussed below), you have to pay tax on your vehicle purchase.
In addition to the 2.9% Colorado state sales tax on car purchases, some Colorado counties charge local vehicle sales taxes.
Local Sales Tax
Aside from a statewide tax rate, Colorado counties and cities charge additional vehicle sales tax.
County Sales Tax
The following countries charge additional vehicle sales tax.
Additional Sales Tax
City Sales Tax
Three Colorado municipalities charge vehicle taxes on car purchases.
Hot Sulphur Springs
What is the Difference Between Sales and Use Tax?
Sales tax is a percentage of a car's purchase price owed to the state of Colorado when you buy a car and register it in Colorado. Use tax is the same thing, but for cars purchased outside of Colorado and brought into the state for registration.
When purchasing a vehicle out-of-state you will have to pay a 2.9% use tax (the same rate as the sales tax) when you register the car in Colorado. You may owe additional local use tax as well, depending on your location.
If you paid sales tax on the purchase of a vehicle in another state, Colorado deducts that tax so that you are not taxed twice. There are three potential scenarios (leaving out local taxes for the sake of simplicity).
Colorado Registration, Title and License Plate Fees
In addition to the state sales tax, you may owe other fees when buying a car and registering it in Colorado, such as vehicle title fees and registration fees.
An initial registration must take place in person at a county clerk's office in the motor vehicle owner's county of residence, by submitting the following:
Registration fees can be calculated on Colorado’s DMV website in a matter of minutes.
After you submit the required paperwork and pay the Colorado fees, the Colorado DMV will mail you the registration documents and license plate tabs within three weeks.
How to Pay Colorado Car Sales Tax
How to Pay Colorado Car Sales Tax
Here's how to pay the sales tax owed after purchasing a car from a private seller in Colorado:
How to Avoid Paying Sales Tax on Vehicles in Colorado?
Motor vehicle taxes are something you can't avoid—they are a part of our lives. You are required by Colorado law to pay sales tax on private party used car purchases unless you meet an exemption.
Colorado Sales Tax Exemption
Vehicle sales taxes apply to everybody but the following:
Is Purchasing a Car from a Dealer Better?
A lot of people mistakenly believe that buying a car from a Colorado dealer saves money. The opposite is true: going to a Colorado dealer costs you more money, and it's a pain—unless spending 3 hours in a Colorado dealership is your idea of a good time.
We do admit that dealers bring a certain amount of convenience that you don’t traditionally get in private sales. In fact, that’s why we exist. PrivateAuto gives you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself.
By shopping for used vehicles from private sellers on PrivateAuto, you avoid doc fees and get lower prices.
Colorado Sales Tax Calculator
If you're in the market for a used vehicle, you'll want to calculate the applicable sales tax. With the PrivateAuto used car sales tax calculator, estimating sales tax has never been easier. This free online car sales tax calculator calculates the amount of tax you must pay on a used car purchase based on your sales tax rate (2.9%) and the vehicle's price.
Purchase or Sell Vehicles Online With PrivateAuto
PrivateAuto is the only transactional marketplace where you can sell and buy vehicles conveniently.
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. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.
Here’s how you can sell your car in Colorado with a few simple steps:
How can I find a used car for sale near me?
PrivateAuto is the best place to find the used vehicle of your dreams.
Here is how you can find your dream car in just a few simple steps:
Colorado Sales Tax FAQ
Does Colorado require VIN inspections when registering a vehicle?
When registering a vehicle from another state, Colorado requires a vehicle identification number inspection. This is to help prevent stolen vehicles from being registered. A Colorado law enforcement officer, a Colorado licensed auto dealer, or a Colorado licensed inspection station (such as Air Care Colorado) can perform the inspection.
How to register a car in Colorado from out-of-state?
To register an out-of-state car in Colorado, you’ll need to submit the following:
Which state has the lowest tax rate?
The states with the cheapest car tax are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has a zero tax rate on private-party car sales, though not on dealership purchases.
With the exception of the above states, all US states charge sales tax on private sales. Oklahoma,North Dakota, North Carolina, Colorado, and Alabama charge 4.5% or less vehicle sales tax.
What is the Department of Revenue in charge of?
The Colorado Department of Revenue (CDOR) is the state agency in charge of collecting taxes and fees, issuing state identification cards and driver licenses, and enforcing Colorado laws pertaining to gaming, liquor, tobacco, racing, auto dealers, and marijuana.
The CDOR is in charge of the following: