Is Vehicle and Vessel Tax Required When Purchasing Compulsory Traffic Insurance?
3 Answers
Yes, it is required. The Vehicle and Vessel Tax is included as part of the tax fees when purchasing Compulsory Traffic Insurance, which is a mandatory insurance required by the state. Without purchasing it, you cannot drive on the road. Otherwise, according to the "Road Traffic Safety Law," you may face a warning or a fine ranging from 20 to 200 yuan. Article 95 stipulates: If a motor vehicle driven on the road does not display an inspection compliance mark or insurance mark, or if the driver does not carry the vehicle license or driver's license, the traffic management department of the public security organ shall detain the vehicle and notify the party to provide the corresponding license, mark, or complete the necessary procedures. Compulsory Traffic Insurance: The full name of Compulsory Traffic Insurance is "Compulsory Liability Insurance for Motor Vehicle Traffic Accidents." It is a mandatory liability insurance where the insurance company compensates for personal injuries, deaths, and property losses of victims (excluding vehicle occupants and the insured) caused by road traffic accidents within the liability limits. The premium is based on the nationally unified standard rates. However, the price of Compulsory Traffic Insurance varies depending on the vehicle type, with the main influencing factor being the number of seats. Compared to the over 20 exemption clauses in commercial third-party liability insurance, the exemptions for Compulsory Traffic Insurance cover losses caused by intentional acts of the victim, the insured's own property losses, related arbitration and litigation costs, and some indirect losses caused by the accident, offering much broader coverage. Moreover, regardless of whether the insured vehicle is at fault in the accident, Compulsory Traffic Insurance will compensate within the liability limits without any deductible. Vehicle and Vessel Tax: Vehicle and Vessel Tax refers to a tax that owners or managers of vehicles and vessels within the territory of the People's Republic of China must pay according to the "Vehicle and Vessel Tax Law of the People's Republic of China." Starting from July 1, 2007, vehicle owners are required to pay the Vehicle and Vessel Tax when purchasing Compulsory Traffic Insurance. Introduction to Electronic Insurance Policies An electronic insurance policy refers to a digital policy issued by an insurance company with an electronic signature, using digital signature software and enterprise digital certificates that comply with the PKI system. An insurance policy, abbreviated as a policy, is the official written proof of an insurance contract between the insurer and the insured. The policy must fully record the rights, obligations, and responsibilities of both parties to the insurance contract. The content recorded in the policy serves as the basis for both parties to fulfill the contract. The policy is proof of the establishment of the insurance contract. Advantages of Electronic Insurance Policies: Saves paper resources, eliminating the need to print insurance proof marks on paper; Saves time and is convenient, not restricted by time or location, with information accessible online anytime, quickly and easily; Allows for reissuance and resending, eliminating worries about losing it. If a paper version is needed offline, it can be printed or mailed; Facilitates management, as electronic unification makes it easier for insurance companies and traffic police departments to manage the insurance information of various vehicles.
As a veteran driver with over a decade of experience, I've learned that vehicle and vessel tax is typically collected alongside compulsory traffic insurance by insurers. When I bought my first car, I initially thought insurance was just about coverage, only to discover the tax was bundled in. This annual vehicle tax is calculated based on engine displacement—smaller engines (e.g., under 1.6L) pay less, while SUVs or high-displacement vehicles face higher rates. Neglecting payment brings serious consequences: failed annual inspections and potential fines of several hundred yuan. That's why I always check local tax standards and prepare funds before renewing my compulsory insurance—avoiding last-minute hassles while contributing to public infrastructure development as a civic duty. Nowadays, digitalization simplifies payments; no need to visit tax offices, just handle it through insurers or apps.
When I first bought a new car, I was also confused about the relationship between these two things. After researching online, I learned that purchasing compulsory traffic insurance does require paying the vehicle and vessel tax. The vehicle and vessel tax is a fixed tax that must be paid annually. For the convenience of car owners, insurance companies collect this tax when handling the compulsory traffic insurance. For my 1.5L displacement car, the tax is about over 300 yuan per year. After paying both the tax and insurance, you receive a receipt. Failure to pay not only prevents the insurance from taking effect but may also affect vehicle registration, and in severe cases, the vehicle could be impounded during road inspections. I recommend asking for details when handling it for the first time, as tax amounts may vary by city, but the process is generally similar. Keep the payment receipt safe for future verification. Overall, integrated processing saves time and is efficient, so there’s no need to handle them separately.
