Do Used Cars Require Purchase Tax?
2 Answers
Whether a used car requires purchase tax depends on whether the original owner has paid the purchase tax and the age of the vehicle. Here are the details: Original owner has paid the purchase tax: If the original owner has fully paid the purchase tax, no purchase tax is required when transferring ownership of the used car. Original owner has not (fully) paid the purchase tax: If the purchased used car was a model exempt from or eligible for reduced purchase tax when it was new, the purchase tax must be paid retroactively. The taxable price is based on the taxable price determined when the tax-exempt or tax-reduced vehicle first applied for tax declaration, reduced by 10% for each full year. Therefore, if the vehicle is 10 years old, even if the original owner never paid the purchase tax, no retroactive payment is required during the transfer.
I just bought a used car, and from personal experience, you really don't need to pay purchase tax. Purchase tax refers to the tax levied when a new car is first registered, usually around 10% of the car's price, which the first owner has already paid. When trading a used car, you only need to handle the transfer procedures, involving some small fees such as transfer fees and possible transfer taxes, but not the new car purchase tax. Before purchasing, I checked the vehicle's tax payment certificate to ensure there was no outstanding payment history. This saved me a lot of money. I recommend everyone to choose reliable sources and verify vehicle records. Don't forget to budget for insurance and maintenance. The total cost is much lower than a new car, making it a smart decision.
