While California has the highest statewide sales tax, its lower local rates offset that amount which keep it from making this list. In other words, a state’s sales tax rate could be high but local sales tax low, resulting in a more balanced-and more manageable-total tax rate.įor example, consider these top five states for most expensive combined sales tax rates, according to the Tax Foundation: Tennessee (9.55%) Louisiana (9.52%) Arkansas (9.51%) Washington (9.23%) and Alabama (9.22%). In some cases, the local sales tax rates are indirectly proportional to their state tax, thereby offsetting the total sales tax. There are 38 states that also impose a local sales tax on top of their state tax, each varying by location. State sales tax, however, is only part of the equation. For example, if you were to buy a new car for $45,000 in California, where the combined state and average local sales tax rate is 8.68%, you could end up spending an extra $3,906 in taxes alone. State sales taxes can make a big difference in the final cost of a car, too. Alaska has no limit on dealer documentation fees, but it does require that the fee be included in the final price of the car.Ĭurrently, the states with the lowest average dealer doc fees include: Some states place a limit on what dealers can charge for documentation fees, but most don’t. Dealer documentation fees, which help cover the dealership’s administrative cost of selling a car, are usually non-negotiable. Alaska: $29,656 (20% above the national average)Įven once you’ve agreed on a final price with the dealer, you can expect other added fees.Indiana: $21,961 (11.1% below the national average cost)Īlternatively, the five states with the highest average used car prices are:.Here are the five states with the lowest average used car price based on car sales from February to July 2021, according to : But keep in mind there could be shipping costs and additional registration fees for out-of-state vehicles. That said, certain markets are cheaper than others so if you’re looking to save money on the initial cost of a used car, you might want to consider looking out of state. According to, the average used car costs around 35% more today than it did at the beginning of 2021. On Consumers Credit Union's Website Best States To Buy Used Carsīuying a used car can save you money, but even used car prices are on the rise. One way to avoid paying top-dollar for a car is to buy used. Supply chain disruptions have led to a shortage of inventory, which means consumers could end up paying more than the MSRP to get their hands on a highly coveted car. That is, during normal times.Įven two years into the Covid-19 pandemic, car prices are still way up and consistently breaking record-high prices. In fact, it’s commonplace for car buyers to end up paying less than the vehicle’s MSRP. The MSRP is not set in stone, however, and simply serves as a starting point for negotiations. That price is established by the car’s manufacturer. For new cars, the price is based on the Manufacturer’s Suggested Retail Price (MSRP), which is the sticker price you see on a car window. One of the biggest expenses associated with buying a new car is, well, the car itself. If you’re currently in the market for a new vehicle, your search has likely produced some sticker shock, as the average cost of a new car is now a record $47,000, according to Kelly Blue Book. ![]() Next to a home or college education, a car is one of the most expensive purchases one can make. But if you want to buy a car and hope to keep costs as low as possible, where you make the purchase matters. The cost of buying a car can fluctuate depending on various factors.
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