How Much are Used Car Sales Taxes in Colorado?

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).

1. If you paid less than 2.9%, in which case you will have to pay the difference.
2. You paid no sales tax in another state. Let's say you bought a used car in Montana and didn’t pay sales tax, given Montana’s 0% tax rate. You’ll pay Colorado’s full 2.9% use tax.
3. You paid more than 2.9% in the other state (for example, Nebraska levies a 5.5% tax on every used vehicle purchase). We wish we could tell you that Colorado will give you a refund, but no. At least they won’t charge you any more tax.

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.

The first time you register a car, you will need to transfer ownership, which will cost you $7.20.

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:

• A completed registration application (Form DR-2395)
• Proof of ownership
• A valid emissions test (if applicable)
• Proof of insurance
• Identification
• Colorado license plate fee: up to $100
• Registration fee: varies based on vehicle weight, age, and location

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.

Here's how to pay the sales tax owed after purchasing a car from a private seller in Colorado:

1. To transfer ownership of the vehicle, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Colorado bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
2. The original car title.
3. Proof of Colorado insurance.
4. Valid driver’s license or ID.
5. Calculate the amount of sales tax due (multiply the vehicle's purchase price by 5%).
6. Submit payment for all taxes and fees.
7. Get your vehicle registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary paperwork, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will get your new license plates by mail.

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:

• Charitable organizations
• Tribes and tribal members
• Governmental entities
• Nonresidents

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.

• Dealerships charge documentation fees above and beyond all the other Colorado taxes and fees you have to pay (the other taxes and fees are exactly the same whether you buy from a dealer or a private seller, by the way). An average documentation fee in Colorado is $490.
• Used car dealerships charge higher prices. Their business model is based on buying low and selling high to generate the spread that keeps them in business. To get the best deals, skip the middleman and go directly to private sellers.

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.

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.

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:

1. Gather the required paperwork for selling a car in Colorado
2. Register on PrivateAuto and get verified
3. List your car
4. Set your terms
5. Vet incoming offers
6. Choose a buyer
7. Schedule a meeting
8. E-sign documents
9. Get paid instantaneously
10. Transfer the vehicle title

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:

1. Browse used vehicles for sale on PrivateAuto.
2. Look at the top of the page for the "Filter by Location" button. There, you will enter your location.
3. Set a search radius, such as 25, 50, or 100 miles.
4. You can make your search even more specific by choosing more filters, such as make, model, year, price range, trim, and other criteria.
5. When you click "Search," a list of all the vehicles that match your search criteria will appear.

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:

1. Colorado driver's license
2. Proof of Colorado insurance
3. Proof of vehicle inspection
4. Bill of sale
5. Payment for sales tax, title and registration fees

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:

• Taking care of state and local taxes, such as income tax, sales tax, and use tax.
• Issuing state identification cards and driver licenses.
• Enforcing Colorado gaming, liquor, tobacco, racing, auto dealers, and marijuana laws.
• Giving taxpayers information and assistance.
• Managing the Colorado Lottery.
• Revenue collection and distribution to state and local governments.

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