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How Much Are Used Car Sales Taxes in New York?

How Much Are Used Car Sales Taxes in New York?

How Much Are Used Car Sales Taxes in New York?

Are you thinking about buying a used car in the state of New York? Sales tax rates and other fees can inflate your out of pocket costs well beyond the actual purchase price. We help you understand New York taxes and fees so you won’t face sticker shock.

Quick links:

How much tax will I pay?

How does NY calculate tax?

Can I avoid paying tax in NY?

The statewide rate for used car sales tax in New York is 4% of the purchase price of the vehicle. Some counties or municipalities also levy sales tax, so the overall rate may be higher depending on where you live.

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Do You Pay Taxes On a Used Car From a Private Seller in New York?

Private-party vehicle transactions don’t get special treatment. If you buy a used car from a private seller in New York, you must pay the 4% state car sales tax, the same as if you purchased from a dealership. You may also owe additional taxes levied by your city or county. Local taxes can range from 3% to 4.875%. A total of 639 local tax jurisdictions collect an average local tax of 4.25%.

Combined with the state sales tax, the highest tax rates in New York are in Brooklyn, New York, the Bronx, Staten Island, and 55 other cities that charge 8.87%.

You’ll pay the lowest sales tax rates in Columbia County, Sullivan County, and Ulster County, for a total of 8.12%.

Aside from the sales tax, other fees involved with purchasing a used car may include registration fees, title fees, and documentation fees.

Here is a table of used car sales tax rates for the top 10 largest cities in New York:

New York City: 8.8%

Buffalo: 8.75%

Hempstead: 8.62%

West Hempstead: 8.63%

Brookhaven: 8.63%

Mount Vernon: 8.88%

Islip: 8.63%

Rochester: 8%

Oyster Bay: 8.63%

Yonkers: 8.87%

For a complete list of municipalities and their respective sales tax rates, see the New York State Department of Tax and Finance website.

How is Used Car Sales Tax Calculated in New York?

Sales taxes are assessed as a percentage of the vehicle’s purchase price. Some people get the brilliant idea to negotiate a low “official” purchase price and pay the remainder in a side transaction. That won’t work, as the DMV is way ahead of you.

Person holding a calculator that has the word tax on it

People who try to avoid paying the full vehicle tax by artificially lowering the price they paid for the car will be let down. The New York DMV can simply use the car's "fair market value" (not the car price) as the basis for calculating sales tax.

The New York Department of Motor Vehicles (DMV) establishes what the car is worth on the open market by referring to 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.

If you’re buying the 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 New York?

Unfortunately, property tax, income tax, sales tax, and other taxes are part of life. There is no way to legally avoid paying sales tax on used cars in New York or in any other state—unless you meet an exemption.

The following tax exemptions for used vehicle purchases are listed on the New York DMV website:

  • If the vehicle was a gift or was purchased from a family member, you can receive a sales tax exemption. You’ll need the Statement of Transaction form.
  • If you paid out-of-state sales tax, you’ll need to provide the out-of-state bill of sale. The purchase price and the amount of out-of-state sales tax paid must be shown on the bill of sale. To claim credit for state and local sales taxes paid in another state, use the Sales Tax Paid in Another State Sales Tax form (DTF-804). If New York State and the other state have a sales tax agreement, this approach can lower the amount of your New York State sales tax. (Check the back side of the DTF-804 form to see the list of states with a sales tax agreement.)
  • If you were not a New York resident at the time the car was purchased, you can use the Sales Tax Exemption form (DTF-803) to obtain a non-resident exemption.
  • You can defer paying car sales tax if you are a member of the United States Armed Services and do not live in New York. You need to fill out the Sales Tax Exemption Form (DTF-803) if:
  • You are a NY resident
  • You’re a member of the US Armed Forces
  • You do not currently reside or keep a residence in NY state

To qualify for these exemptions, evidence must be presented to the DMV.

If you plan to move to a state with no sales tax, try purchasing the car after your relocation. Otherwise, we don't recommend attempting to avoid paying car sales tax in New York or anywhere else. The thousands of dollars you might save are not worth the legal and financial implications, 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 vehicles for sale or are trying to sell your used car 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 New York 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, 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, money transfers were 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.

NY Used Car Sales Tax FAQ

Who pays sales tax on a used car in NY?

The person who buys a used car in New York is accountable for paying the sales tax.

Blue wooden car with a block on top that says car tax

If you purchased your vehicle from a private seller, both you (the buyer) and the seller must complete the Statement of Transaction Sales Tax Form (DTF-802). The DMV will calculate and collect the sales tax, and issue a sales tax receipt.

Is it expensive to buy a used car in NY?

The price for the average 10-year-old car in New York is just shy of $15,000. In 2021, New York ranked as the ninth most expensive state to purchase a used car, with an average price of $25,693.

The price of a used car can vary depending on:

  • the vehicle's brand and model
  • its age and condition
  • the region where it is acquired

Additional taxes such as sales taxes, registration fees, and other costs associated with purchasing a used car might increase the overall cost.

Does NY have a vehicle excise tax?

New York State imposes an excise tax on gasoline and diesel fuel sold within the state.

The tax is levied when motor fuel is manufactured or imported into New York State, as well as when diesel motor fuel is sold or consumed for the first time in the state. The motor fuel excise duty does not apply to sales to governments (federal, state, and local).

You can find more information on this on the New York Department of Taxation and Finance’s official website.

How much is the title and registration in NY?

Initial vehicle registration fees for most automobiles in New York include $25 for vehicle plates, $50 for a title certificate, and a $32.50 sales tax for a two-year fee.

There may be additional costs associated with registering the vehicle in New York, which vary by county or municipality.

Registering a used car with the New York DMV is similar to the registration process for new cars. Individuals who buy a used car are required to have the vehicle inspected when the title of ownership is transferred.

Which state has the cheapest car tax?

Each state in the US has its own taxes and fees for purchasing a car. Some states offer tax exemptions for certain types of motor vehicles. Other states are lowering sales taxes and fees for car purchases and ownership.

States such as Oklahoma, North Carolina, Colorado, and Alabama charge less than 3.5% in sales taxes on used cars.

Alaska, Delaware, Montana, New Hampshire, and Oregon don’t charge sales tax when you purchase a motor vehicle. So, if you really want to avoid car sales tax, you might consider moving to one of these states.

Why is New York's car sales tax so high?

New York has higher car sales taxes than many other states. One of the key reasons for New York's high car sales tax might be the state's revenue requirements. Other causes for New York's high sales taxes include:

  • A deficiency in New York State's overall budget
  • The cost of repairing roads following the winter season.
  • Snow removal expenses
  • Increased overall cost of living