How Many Types of Taxes Are Required When Buying a Car?
2 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.
