How to Avoid Paying Sales Tax on a Used Car?

When you’re after a used vehicle in Chicago, you’re looking for an amazing deal, but sales tax can easily bump up the total cost. So how would you avoid sales tax on a used car? In most cases, car buyers are required by law to pay sales tax, but there are a few exceptions depending on the driver, location, and the car. Learn more about sales tax on used cars, and the situations in which it isn’t required below from the finance experts at The Autobarn Volkswagen of Countryside. 

When Sales Tax on Used Cars Isn’t Required 

There are a few states that don’t charge sales tax on new or used cars, which include: 

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

If you live in one of the states listed above, and plan to register your car in that state, you won’t have to pay sales tax. Still, simply buying a car in a state that doesn’t charge sales tax won’t get you out of paying sales tax. If you’re planning to relocate to a state with no car sales tax, you can register your car in your new state of residency if you buy with 90 days of moving. 

What Are Some Used Car Sales Tax Exemptions?

In some cases, there are used car sales tax exemptions, even if a person lives in a state that requires over 7% sales tax, such as California or Nevada. Legal sales tax exemptions are as follows: 

• Vehicles that were made before 1973. They’re considered historic models. 
• Vehicles made for forestry and agriculture. 
• Certain individuals with a disability may qualify for a car sales tax exemption. 

If you do qualify for an exemption, make sure your exemption certified is clearly displayed on your vehicle! 

Tax Credits for EVs Can Outweigh Sales Tax 

Purchasing an electric vehicle in LaGrange or Naperville can help you save on taxes if there are tax credits or incentives available. Keep in mind that you can’t use those tax credits when you’re purchasing the car. You’ll earn the tax credits with ownership, which will help offset the cost of the EV down the road. Also, before buying an electric vehicle– regardless of where you live– make sure you’re aware of the rules and regulations involving federal and state tax credits for electric cars. 

Find Your Quality Pre-Owned Car at The Autobarn Volkswagen of Countryside

Now that you know about sales tax on used cars in general, learn more about sales tax in Illinois through our FAQ guide! At our Countryside lot, we also carry a wide range of used cars, SUVs, trucks, and more, all priced affordably. Check out what we have in stock now, and be sure to enjoy our pre-owned vehicle specials as well!