How is tax calculated when buying a used car?
2 Answers
Used cars do not require payment of purchase tax or value-added tax, as vehicle purchase tax is levied only once. Below is some information about taxes on used cars: 1. Introduction: Vehicles that have already had vehicle purchase tax levied are not subject to purchase tax again. Therefore, buying a used car that has already paid purchase tax does not require paying it again. However, some vehicle models may have had their purchase tax halved or exempted when purchased new. For these types of cars, the purchase tax must be repaid when sold as used. 2. Regulations: According to Article 14 of the "Vehicle Purchase Tax Law of the People's Republic of China": If tax-exempt or tax-reduced vehicles are no longer eligible for exemption or reduction due to transfer, change of use, etc., the taxpayer must pay the vehicle purchase tax before completing the vehicle transfer registration or change of registration.
Last time I bought a used car, I found that calculating the taxes was actually quite simple, with the transfer fee making up the bulk of it. The transfer fee includes an appraisal fee and a registration fee, and the specific calculation is based on the vehicle's engine displacement. For engines below 1.0L, it might be around one or two hundred yuan, while larger displacements can cost up to seven or eight hundred. The higher the price, the more the appraised value affects the tax. Value-added tax (VAT) is only added when buying from a used car dealer, at a rate of about 17%, but private transactions don’t require it. The total cost is roughly between 1% to 3% of the car's price. To save money, I specifically chose a private seller for the transfer and went to the DMV in advance to clarify the fee breakdown. Remember to check the original car invoice to avoid overpaying on taxes. For a used car in good condition, the tax burden is lighter, and spending some time researching can save a lot. After driving, don’t forget regular maintenance—it saves fuel and ensures safety. Overall, understanding these tax matters for the first time just takes a bit of patience, so don’t get fooled.
