How Much Tax Does a Car Need to Pay?
4 Answers
The specific taxes a car needs to pay are as follows: 1. Value-added tax (VAT). VAT is levied on the added value of goods during the circulation process, so VAT must be paid when purchasing a car. The invoice price includes 17% VAT. The calculation formula for VAT on a new car is: VAT = Purchase price (including tax) ÷ 1.17 × 0.17. 2. Purchase tax. Generally, cars need to pay a vehicle purchase tax of 10% of the transaction price. Vehicle purchase tax = Tax-exclusive sales price × Tax rate. 3. Consumption tax. The consumption tax is an internal tax included in the car's sales price. The consumption tax rate for passenger cars is determined based on the engine displacement. The larger the displacement, the higher the tax rate. 4. Tariff. For imported cars, customs will levy a 25% tariff based on the CIF price. 5. Vehicle and vessel tax. Currently, the vehicle and vessel tax is included in the vehicle insurance. New car insurance consists of compulsory insurance, commercial insurance, and vehicle and vessel tax. The vehicle and vessel tax is also determined based on the engine displacement, with slight variations in standards across different provinces.
When I bought my new car last year, I was really shocked by the taxes. The purchase tax accounts for 10% of the car's price—for example, a 200,000 yuan sedan incurs a 20,000 yuan tax. Additionally, the vehicle and vessel tax is calculated based on engine displacement, with a 1.6L car paying around 420 yuan annually. Insurance also includes a value-added tax, roughly 5% of the premium, amounting to a few hundred yuan. In total, it added tens of thousands of yuan, significantly increasing the cost of buying a car. As a first-time buyer, I lacked experience and later learned that choosing an electric vehicle could exempt me from the purchase tax—for instance, new energy vehicles only pay a small registration fee. Next time I change cars, I’ll definitely check the policies carefully and opt for an energy-efficient model to save money. Daily car use also requires timely tax payments to avoid potential fines.
As a veteran driver with ten years of experience, annual vehicle and vessel tax is unavoidable. The tax is tiered based on engine displacement—my compact SUV with a 2.0L engine costs 600 yuan per year. The purchase tax was paid long ago when buying the car, but annual costs add up. The tax portion within insurance premiums also changes yearly—this year’s 5,000 yuan premium included over 200 yuan in taxes. Money-saving tips include opting for low-displacement or used cars, and some cities offer discounts for new energy vehicles, saving hundreds. Overall, taxes make up a small part of car ownership expenses but are crucial for budget planning—best to track payment deadlines via mobile apps to avoid missing them. Long-term, policies favoring eco-friendly cars can save a lot of hassle.
From an environmental perspective, vehicle taxes directly influence purchasing decisions. Currently, electric vehicles are exempt from purchase tax, while conventional fuel-powered vehicles are subject to a 10% tax based on the vehicle price. The vehicle and vessel tax is calculated based on engine displacement: small-displacement engines (below 1.5L) incur an annual tax of 300-500 yuan, whereas larger-displacement engines may cost thousands of yuan annually. For new energy vehicles, the government also provides subsidies, resulting in even lower actual tax payments. For example, the Tesla Model 3 is entirely exempt from purchase tax, with only a few hundred yuan in registration fees. Under policies encouraging energy-efficient models, personal vehicle tax reductions are significant, but the charging costs for electric vehicles must also be considered.
