Is Purchase Tax Required When Buying a Used Car?
2 Answers
Purchase tax is not required when buying a used car, as the purchase tax is a one-time levy policy. Below is relevant information about vehicle purchase tax: 1. Definition of Vehicle Purchase Tax: Vehicle purchase tax is a tax levied on units and individuals who purchase specified vehicles within the country, evolving from the vehicle purchase surcharge. 2. Calculation Method of Purchase Tax: Vehicle purchase tax is calculated based on the ad valorem rate method. The calculation formula is: Tax Payable = Taxable Price × Tax Rate. If the consumer buys a domestic private car, the taxable price is the total payment made to the dealer, including all additional fees, excluding the value-added tax (VAT) (tax rate 13%). Since the purchase price in the special invoice for motor vehicle sales includes VAT, when calculating the vehicle purchase tax, the 13% VAT must first be deducted, i.e., Vehicle Purchase Taxable Price = Invoice Price ÷ 1.13, and then the vehicle purchase tax is calculated at a 10% tax rate.
I've bought several used cars and can share some experience. The purchase tax is only paid when buying a new car, usually around 10% of the car price, and it's a one-time payment. For used cars, since the tax was already paid when the car was new, there's no need to pay purchase tax again during subsequent transactions. However, this doesn't mean there are no other fees. For example, the transfer fee is mandatory, ranging from a few hundred to over two thousand depending on the car model, and there may also be inspection fees or intermediary fees. When handling the transfer, you'll need to visit the vehicle management office once with the necessary documents to make things easier. Additionally, when choosing a used car, it's best to check the vehicle's records—don't just go for a cheap deal and overlook potential accident risks. This way, overall, you can save money and get a good deal, unlike the hefty expense of buying a new car.
