23 Hidden Costs of Owning a Car

NEW YORK - Jan. 30, 2025 - PRLog -- Link to full article at end:

1. Car Payments
The average new car payment is $734 a month and $525 for a used vehicle. (2) The price of cars has skyrocketed due to all the technological advancements automobiles have experienced over the years. Sensors and cameras abound and the average price of a new car is over $40,000.

2. Taxes
State sales tax varies by state, and the national average car tax is $1,182 per year. (1) For instance, California's sales tax is 7.5%, Texas' is 6.25% and New York's is 4%. Vehicle tax is applied at the time of purchase, whether you buy a new or used car. Even if you buy a car from another state, you must pay your state's sales tax. Some states call this type of sales tax an "excise tax" and offer a flat rate while others consider the weight of the car along with other factors like fuel efficiency.

Title taxes is another term applied by some states, like Georgia and Maryland, to refer to sales tax on a vehicle purchase. Some states also apply a tax for title transfers. If you buy a car as a trade-in, the trade-in value may or may not be deducted from the full sales tax, depending on where you live.

Leasing options often have different sales tax rules in some states. For instance, in some states you only pay taxes on the leased amount whereas elsewhere you may pay sales tax on the total vehicle value. Wherever it is you live and what the tax laws are, you can count on paying taxes when you buy a car or transfer a title from a private owner.

3. Title
A vehicle certificate of title proves you are the rightful owner of the vehicle. The lender mails you the title after the car has been paid off. If you buy from a private owner, you would have the title transferred to you. A transfer fee is roughly $15 to $150 depending on where you live.

The transfer process and cost varies by state. In some states, you may get a discounted fee for transferring from a family member to another. Make sure tickets and tolls are paid off by the previous owner or you may be buying yourself a small debt.

For 20 more costs, visit https://smartfinancial.com/hidden-costs-car-ownership