How Many Types of Taxes Are Required When Buying a Car?
4 Answers
When buying a car, the following taxes are required: 1. Vehicle Purchase Tax: This is a tax levied on units and individuals purchasing specified vehicles within the country, evolving from the vehicle purchase surcharge. The calculation formula is car price ÷ 1.17 × tax rate. 2. Insurance: Compulsory traffic insurance is mandatory, costing 950 yuan per year, with a gradual decrease in subsequent years. 3. Commercial Insurance: This depends on personal needs; more coverage means higher costs, while less coverage is cheaper. 4. License Plate Fee: This includes the cost of the vehicle license, motor vehicle registration certificate, vehicle inspection fee, and license plate fee, totaling around 700 yuan.
I have some understanding of the taxes involved when buying a car. The main one I remember is the vehicle purchase tax, which is mandatory as per national regulations, approximately 10% of the car's price. It's calculated based on the pre-tax price and is directly included in the total payment. Value-added tax (VAT) is also significant, with dealers deducting around 17% of the car's price as tax. Although you don't feel it directly when buying, the actual payment includes this. The vehicle and vessel tax is paid annually, but when purchasing a car, you may be required to prepay or register it during the formalities. Additionally, purchasing imported luxury cars incurs a consumption tax, with rates depending on the engine displacement—higher displacement cars face heavier taxes. In total, taxes can account for over 15% of the car's price, so it's essential to budget for this. When I bought my first car, I didn't pay attention to this and almost didn't have enough money at payment. Later, I learned that choosing a new energy vehicle comes with a lower purchase tax, saving a considerable amount of money.
As someone who frequently helps friends calculate car purchase costs, I understand that car purchase taxes mainly include purchase tax, value-added tax (VAT), and vehicle and vessel tax. The purchase tax is levied at a fixed rate of 10% of the invoice price and must be paid in full at the time of purchase. VAT is included in the car price, with a rate of around 13%, which can be higher for imported cars. The vehicle and vessel tax is paid annually based on engine displacement, but the amount must be registered during vehicle registration. I recommend checking online calculators in advance by entering the car price and engine displacement to estimate the total tax. For example, if you buy a car worth 200,000 yuan, the purchase tax would be around 20,000 yuan, VAT a few thousand yuan, and the total tax could require saving for an extra half a year. A money-saving tip is to buy a car with a smaller engine displacement or opt for an electric vehicle model, as the purchase tax reduction can save you almost half.
I bought my first car the year before last, and the most surprising part was the taxes. There are two types: purchase tax and vehicle and vessel tax. The purchase tax is 10% of the car's price and must be paid on the spot when buying the car, along with the VAT deducted from the car price. The vehicle and vessel tax is paid annually, but it's handled together at the time of purchase to avoid missing payments. My budget was 150,000 for the car, and the taxes added over 15,000, almost causing a hiccup at the payment stage. I later learned that policies vary by location—big cities have higher taxes, while smaller cities offer more discounts. Always ask the dealer for a detailed breakdown before buying to avoid overlooking taxes.
