When comparing car quotes, it's important to know exactly what is included in the price quoted. Car fees or car sales tax which one car dealer includes in their quote and another dealer does not can be confusing and cause you to set aside the actual best deal in favor of one which seems cheaper, but isn't. This information may help you interpret car dealer quotes to ensure you're finding the true car pricing to compare.
Fees to Look Out For
These are the fees which will apply to your car purchase. When determining if certain fees are included or not, these are what you should be looking for:
- Destination Fee - This is a significant charge which you will have to pay on any new car purchase. It is normally in excess of $600 depending on the vehicle.
- DMV Fees - These charges are necessary to register your vehicle with the DMV. They will be the same for all vehicles and will not be included in the price quote.
- State Sales Tax - This is usually not included in the price quote and will vary by state.
- Dealer-Installed Accessories - These are usually not included in the price quote unless you ask for the price of a specific vehicle rather than a base new car.
Online Price Quotes
Online price quotes may or may not have extra fees and taxes included in the quote - this is a matter of what each individual car dealer chooses to do. When you receive an online price quote, look at the bottom for the disclaimer and other notes. There should be a short paragraph which explains exactly what is or is not included in the price quote.
Quotes In Person
The only way to know exactly what is included in an in-person quote is to ask the person who quoted you the price. Make sure you go through the list of fees to watch for so that you know whether or not each is included.
You should always take extra fees into account when comparing the prices you've been quoted. Making sure everything is compared at the same level will help you find the best deal on a new or used car.
Related Questions and AnswersAre there any Tax Rebates for New Cars?
Tax rebates for new cars at this time apply only to fuel-cell technology cars and they continue until 2014. Until the end of this year, there will still be limited rebates on hybrid car purchases. They are from $1,200 to $2,400, and will be phased out at the end of the year altogether. At this point, it is unknown, and highly unlikely, that this type of program will be started again, as changes in Congress have seemed to weigh against this type of rebate. About the only other tax rebates that may be available to you are if you are purchasing a new car or truck strictly for business and can show that the car or truck is only for business. If it is not, only that portion of the time that it is used for business, can you claim a rebate, and the records must be detailed very closely.What are the States that Have No Sales Tax when Buying a New Car?
The states that have no sales tax at all on their car sales are among the following: Alaska, Delaware, Montana and New Hampshire. This means that if you purchase a car in any of these states, you do not have to pay any sales tax. However, if you live in a sales tax state, there are some dealerships that are charged, by law, with collecting a sales tax. If this is the case, then you will have to have a special receipt filled out and notarized so that you can collect your sales tax back. This may take some weeks to accomplish, unless you buy your car online from that state and have it shipped back to you. This is probably the best way to handle this. Unless you are planning to fly out and drive the car back yourself.Is there Such Thing as an SUV Tax Credit?
Yes, there is an SUV Tax Credit that you can deduct from your taxes if it is close to the end of the tax year and you are buying a new truck or SUV strictly for business. A couple of years ago, that tax deduction was quite sizeable - on the order of the cost of the vehicle itself, plus some depreciation - and we have not heard that this situation has changed. Though, be advised that this situation plays out at the end of the model year and not at the beginning of the new model year. This can be a substantial savings to you if you are buying many vehicles at one time.Is a Car Loan Tax Deductible?
The circumstances that make a car loan tax deductible are very strict. Those circumstances come into play if you have taken a credit line on your home for improvements or to meet other obligations. Since, much of your home loan tax is still tax deductible, you can then deduct that portion of the tax you paid on your car from your taxes, along with the rest of the home loan. If, you purchase your car for business, and keep detailed records of your mileage and that your car is strictly for your business, then it is also deductible. Other than these two limited cases, your car loan is not tax deductible.Is My Car Registration Tax Deductible?
Yes, your car registration tax is deductible provided it is treated as a personal property tax and not as a new license registration. If your state treats your car registration as a simple fee to the state and not a tax, then you have no recourse on your federal taxes. If, however, your car tax is treated as a property or excise tax, then it is deductible from your federal taxes. How much can you save? It depends on the age of your car and the type. For example, if you have just purchased a new $40,000 luxury sedan and your state charges you 5 percent excise tax on the balance, it is quite possible that you will be facing a tax of $2,000 or better. While, if your car is quite old and is at the other end of the spectrum, it is quite possible your excise tax will only be $25.