Can car sales tax be financed? This is a question many new car buyers ask. The simple answer is yes. The complex answer is that yes, it can be.
It may surprise you to learn that many banks, credit unions and other financial institutions offer financing options for purchasing new cars. In fact, many dealerships also offer financing. The key is to know how much you can afford to spend and how long you plan to keep the car. If you are buying a car as your primary vehicle, you may want to take the time to determine exactly how much you can afford to spend each month on car payments. Keep in mind, some dealerships will finance up to two-thirds of the total cost of the vehicle. There are also several programs offered by the government that allow you to deduct a portion of the cost of a new or used car.
The best approach is to first determine what the tax credit you are applying for will do for your monthly payment. You can figure this out by using the dollars you are able to save on your current interest rate. Add this to the dollars you can afford to spend each month and calculate the amount you can spend each year towards a new car. You may want to include an additional fee for insuring the car. These fees can amount to thousands of dollars depending on your situation.
To get the answer to can car sales tax be financed, take the appropriate steps to find the information you need. Look at your current bank statement. Look at the interest you are paying on other loans and credit cards. Determine if you have other options available.
The best approach to determining can car sales tax be financed is to do your homework. Look at what your monthly payments are on all your bills. Look at how much money you have available in savings. Calculate how much you are spending each month towards car payments. Look at your income versus expenses.
The second step in determining can car sales tax be financed is to ask questions. If you have any doubts about your ability to make the payments, find out what your income and expenses would be if you didn't own a vehicle. It can be helpful to have a monthly budget. Take a look at your credit report. Make sure all your accounts are current.
The third step in determining can car sales tax be financed is to remember that you are not locked into anything. If you change your mind, if you no longer feel comfortable with the vehicle you want, you can sell it. Keep in mind, though, that there may be a waiting period before you can legally trade in an existing vehicle. If you do plan on keeping the car, however, you will be able to finance it through the dealership. There may also be various rebates available.
Finally, the last step in determining can car sales tax be financed is to be proactive. If you have been thinking about buying a car, don't sit around waiting for an answer. Go out and test drive a car before you decide. If you don't feel comfortable with driving, forget about buying it. You will have plenty of time to think about it later.
In order to get the best financing rate possible for your new car purchase, you need to have good credit. This means paying down any high interest credit card debt and making all of your payments on time. Remember, if your credit score drops, regardless of whether or not you have good credit, you will still pay a higher interest rate on your car loan. If your credit score is already low, consider taking out a vehicle loan that offers a higher interest rate. Even if your credit rating has declined, though, you can still improve it by making your monthly payments on time, handling your debt in a responsible manner, and by avoiding excessive spending.
Some people are leery of purchasing a new car because they don't want to pay sales tax. However, this isn't necessarily a problem. If you are a resident of the state you are purchasing the car in, you will not be required to pay sales tax on the car. In some cases, this can be negotiable, especially if the buyer lives in another state and purchases the car from a dealer in that state.
Even if you do pay sales tax, though, you may be able to avoid paying it by finding a state that exempts sales tax from its licensing fee. Many states exempt vehicle registration, but not vehicle licensing fees. These fees can add up, particularly if you make frequent trips between state lines. If you are able to find one that does not charge sales tax on the basis of where you live, you can save a lot of money on your vehicle purchase. To find out if the dealership that sold you your car qualifies for this exemption, contact the Department of Revenue in your area.