Buying a used car in Virginia is a great way to save money, but don’t start celebrating yet. You will still have to pay vehicle sales and use tax.
Virginia's car sales tax rate is 4.15% of the vehicle's sales price. Unlike many other states, Virginia has no local taxes. So, 4.15% is the maximum you’ll pay in sales tax in Virginia, unlike other states where local governments can tack on additional vehicle taxes over and above the state’s tax rate.
Keep reading to get the scoop on how motor vehicles are taxed in Virginia.
Do you Pay Taxes When you Purchase a Car From a Private Party in Virginia?
According to the Virginia Department of Motor Vehicles, “Virginia is required to collect a 4.15% sales and use tax (SUT) at the time of titling whenever a vehicle is sold and/or the ownership of the vehicle changes.
The amount due is based on the vehicle's gross sales price, or $75, whichever is greater.”
You’ll pay a 4.15% tax rate, whether you buy from a private seller or a car dealer. Virginia tax law does not discriminate between the two. Unless you qualify for a tax exemption (discussed below), you are required to pay tax on your vehicle purchase.
What is Sales and Use Tax?
Sales tax is a percentage of a car's purchase price owed to the state of Virginia when you buy a car and register it in Virginia. The use tax ensures that vehicles purchased within the state and cars brought into the state are taxed identically.
Use taxes are pretty much the same thing, but for buying out-of-state vehicles. When you purchase a car out-of-state and register it in Virginia, the state levies a 4.15% use tax (the use tax rate is the same as the Virginia car sales tax rate).
If you paid sales tax on the purchase of a vehicle in another state, Virginia deducts that tax so that you are not taxed twice. There are three potential scenarios.
- You paid no sales tax in another state, in which case you owe the full 4.15% Virginia sales tax. Let's say you bought a used car in Delaware and didn’t pay any sales tax, given Delaware's 0% tax rate. You’ll pay Virginia’s full 4.15% rate.
- You paid less than 4.15% sales tax in another state, in which case Virginia charges you the difference. Let’s say you bought a used car in Georgia for $23,000. Georgia car sales tax rates are 4%, so you paid $954.5 (.0415 X $23,000) in Georgia tax. When you go to register your car in Virginia, your total tax bill will be $954.5 minus the $920 you already paid in Georgia, for a total tax due of $34.5 to Virginia.
- You paid more than 4.15% in the other state (for example, Tennessee levies a 7% tax on every used vehicle purchase). We wish we could tell you Virginia will give you a refund, but no. At least they won’t charge you any more tax.
Virginia License Plates, Title And Registration Fees
In addition to the state sales tax, you may owe other fees when buying a car and registering it in Virginia, such as a vehicle title fee and registration fee.
To register your vehicle at the Virginia Department of Motor Vehicles (DMV) branch office, you must show proof of car insurance. The first time you register a passenger vehicle, you will need to transfer the title, which will cost you $15.
Virginia charges the following registration fees, depending on vehicle type and weight.
- $40.75 for cars 4,000 lbs and under
- $45.75 for cars 4,001 lbs and over
If you want personalized plates, they cost an additional $10.
For the full scoop on Virginia license plate and vehicle registration costs or any additional DMV fees you may face, see the Virginia DMV page.
How is Used Car Sales Tax Calculated in Virginia ?
Sales tax is a percentage of a car's gross price owed to the state of Virginia when you buy a car and register it with the Virginia Department of Motor Vehicles.
If the Department of Taxation (DoT) suspects that the purchase price of the vehicle was artificially decreased, they will calculate sales tax based on the car’s NADA value.
The Department of Taxation establishes what the car is worth on the open market by referring to NADA values or other reliable sources on used car prices. If the NADA value is significantly greater than the car’s purchase price, DoT can opt to base sales tax on the NADA value.
If you purchased a vehicle that is more than 5 years old and the seller has not entered the sales price or an incorrect sales price was entered on the title, you will submit the vehicle price certification (Form SUT 1) or a handwritten bill of sale. The handwritten bill of sale must be signed by both you and the seller and include:
- Purchase price
- Vehicle identification number
- Date of sale
If you’ve purchased a car that is less than 5 model years old, you need to submit an affidavit for procurement of title (Form SUT-1A) to the DMV at the time of transferring the title. This form is required when the sales price exceeds the current trade-in value as listed in the NADA official used car guide by more than $1,500.
It is important to note that underreporting the purchase price of a vehicle in order to avoid paying sales tax is illegal.
How to Pay Virginia Vehicle Sales Tax
Here's how to pay the sales tax owed after buying a vehicle from a private seller in Virginia:
- 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 Virginia 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:
- The original car title.
- Proof of Virginia car insurance.
- Valid driver’s licenses or IDs
- Calculate the amount of sales tax due. Multiply the vehicle's purchase price by 4.15%.
- Submit payment for all taxes and fees.
- Get payment proof from the Virginia Department of Taxation.
- Get your registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary documentation, 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 in the mail.
How to Avoid Paying Sales Tax on Vehicles in Virginia?
Motor vehicle taxes are something you can't avoid—they are a part of our lives. You are required by law to pay tax on private used vehicle purchases in Virginia or any other state that charges sales tax—unless you meet an exemption.
Sales Tax Exemptions in Virginia
According to the Virginia DMV:
If you are titling your vehicle in Virginia for the first time and you hold a valid title or registration in your name by another state or a branch of the United States Armed Forces, you will not have to pay the sales tax. However, if you purchased the vehicle within the last 12 months, you must provide proof that the sales tax was paid elsewhere in order to be exempt in Virginia.
Certain disabled veterans of the United States Armed Forces or the Virginia National Guard may be eligible for a sales tax exemption on the purchase of a vehicle, if that vehicle is owned and used primarily by or for the qualifying veteran. In order to qualify, the U.S. Department of Veterans Affairs must determine the veteran has a 100% service-connected, permanent, and total disability.
Is Purchasing a Car from a Dealer Better?
A lot of people mistakenly believe that buying a car from a Virginia dealer saves money. The opposite is true: going to a Virginia dealer costs you more money, and it's a pain—unless spending 3 hours in a Virginia dealership is your idea of a good time.
- Dealerships charge documentation fees above and beyond all the other Virginia 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 Virginia is $599.
- Used car dealerships charge higher prices on cars. 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 admit that dealers provide a level of convenience that you don't typically get when buying from a private seller. That is, after all, 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 purchasing from private sellers on PrivateAuto, you avoid the doc fee and get lower prices.
Virginia Sales Tax Calculator
If you're in the market for a used vehicle, you'll want to calculate the applicable sales tax. With PrivateAuto's used car sales tax calculator, calculating 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 tax rate (4.15%) and the vehicle's price.
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 via our banking gateway, PrivateAuto Pay. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.
Here are 10 easy steps to selling your car in Virginia.
- Gather the required paperwork for selling a vehicle in Virginia
- Register on PrivateAuto and get verified
- List your car
- Set your terms
- Vet incoming offers
- Choose a buyer
- Schedule a meeting
- E-sign documents
- Get paid, instantly
- Transfer title
Virginia Vehicle Sales Tax Frequently Asked Questions
How to calculate Virginia sales tax on electric cars?
Electric vehicles are taxed the same as all other motor vehicle sales. To calculate the Virginia vehicle sales tax, follow these steps.
- Find out Virginia's sales tax rate (4.15% of your vehicle price)
- Turn the percentage into a decimal and multiply it by your vehicle’s purchase price (.0415 X vehicle’s purchase price)
Which state has the cheapest car taxes?
The states with the lowest tax rate are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has no taxes on private-party car sales, though it does have them for dealership purchases.
If you really want to avoid sales tax on car purchases, you might consider moving to one of these states.
With the exception of the above states, all US states charge sales tax on private-party vehicle purchases. There are some states, such as Oklahoma, North Carolina, Colorado, and Alabama, that charge 4.5% or less.
What is the Code of Virginia?
The Virginia Code is the official record of laws passed and signed by the governor and the Virginia General Assembly.
Is Virginia car tax annual?
While tax on car purchases is only paid once when transferring a vehicle title to your name, your vehicle is subject to annual personal property tax and a local registration fee.
Unlike sales tax rates, personal property tax rates have an average rate of 0.75%.
How can I find a used car for sale near me?
Whether you're looking for a Grand Jeep Cherokee or a compact city car, 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:
- Browse used vehicles for sale on PrivateAuto.
- Look at the top of the page for the "Filter by Location" button. There, you will enter your location.
- Set a search radius, such as 25, 50, or 100 miles.
- You can make your search even more specific by choosing more filters, such as make, model, year, price range, trim, and other criteria.
- When you click "Search," a list of all the vehicles that match your search criteria will appear.