Taxes, Fees, and Expectations | Car Buying Questions Answered

Car Buying Questions about Taxes, Fees and Expectations

How Much Tax do I Pay on a Vehicle Purchase?

Anytime people come by a car they, you know, they want to know that the price is totally fair, right? One of the things that plays into price are taxes and fees, and then anything you've added to it. So, as far as taxes or fees are concerned, you really have to know what they are in your area. 

Tax Rate Based on State of Residence

In our area, here in the Boise area, sales tax is six percent, but if we sell to an Oregon resident they don't have to pay Idaho sales tax. In virtually every state that I've seen that operates this way, you pay tax based on where you're going to register the vehicle, and you can register the vehicle typically where you have proof of residence. 

I know if you're watching this in California, they're real sticklers if you have a home here and a home in California it's likely you'll have to pay California sales tax. If that home is worth more than this home, and again that's gonna come down to actual lending rules. But just to understand, right, a car price you see very likely doesn't have the sales tax for your area in it, or other fees, but most dealers are regulated pretty heavily in what fees they charge and most people charge the same fees. 

What Other Fees are Involved in a Car Purchase?

In our market, the average doc fee is $299 and title is $14 now. In Oregon I think the max dealer doc fee is $75 and they all pay the same, but just understand that you're gonna pay for the car, and for those fees.

Who All Has to Pay These Fees?

It sounds cheesy or sounds made-up, but once fees are levied to one customer, they do have to be levied against all customers. And what I mean by that is it's actually an anti-competitive, or it's a really a consumer protection act move because they don't want someone from a different race, color, background, to get fees that someone else didn't. So, like at our store, whether it's the doc fee, everybody who comes in including employees pay that fee. And trust me, I know it's a hot topic and people don't love it, but over time the profit and sales price and things have gotten so much more competitive that those line item fees just started to show up because discounts started to get so great, and people don't love them but it is what it is. Just be aware of it, if someone is afraid to show those to you that's a great sign that maybe you should not be doing work there. You want to know your out the door price, it should be an easy thing to get.

What can I expect when Buying a Car?

One of the questions we get all the time when we're not at the store is what can I expect when I come buy a car? You know it's tough, if you show up to a dealership and you have no idea what to expect, you haven't done any research, it's probably gonna be a big circus and you'll probably hate it. And, I hear all the time that people do really dislike the car buying process. But nowadays, start it on your phone, start it on your laptop, start it on the internet, do some research on manufacturer websites and review sites to find exactly what kind of car you want and then look at actual dealer sites. Find the highest reviewed stores, and look at what you like. Just look at their blogs, look at their Facebook, if they match you and your personality, that's a good place to start because then you're really gonna put yourself in a situation to enjoy the experience. Expect them to want to show you cars, expect them to ask you to take a test drive. They should be happy to give you a price and payment information, but if you've done what we talked about you should know about what your payment will be before you get there. If you've used any of the pricing tools, you should know about what the car should cost before you get there, so you really help yourself by having a good experience by picking a dealership and a car that matches your lifestyle, and go in with a good attitude, go in to enjoy the experience. And I promise you, you will.
 
Most dealerships and most stores with good ratings, they're really there to help your people. Like our store, we are a really high volume store and we just live on that repeat business because we want to see you here at the coffee shop, we want to see you at the grocery store, we want to see you at the ski resort, and we want to be your friends. So we sell a lot of cars, we help people into them, it's what we love to do and I hope that you find a place that works like that for you.
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