Read THIS if you are considering purchasing a new car in California

So, we bought David a new car last year and obviously have to pay for it's registration this year.

We get the bill and I nearly faint: $429.00.

Two years ago when we first moved here, David and I owned two cars: a 2004 Nissan Xterra and a brand new 2007 Jeep Wrangler that we had purchased 3 months before our move. At the time, my car was 2 years old and, even though it was purchased in Texas and brought here I wasn't subject to any of the Non-resident Vehicle fees (thank God!) but David was. :( Based on the MSRP of the Jeep, we would've owed $2,600 in sales tax but, because we had a trade in and paid the rest of the cost in cash, we only owed the dealership back in Texas $186.00. Standing at the counter at the DMV, this lovely woman tell us that before they would allow us to get license plates and registration for the Jeep we had to pay the State of California that $2,600.

What?!?!? I know, I nearly fainted and was super upset...

Basically, California wants to discourage it's residents from buying vehicles out of state so, if you purchase a car that is brand new OR less than 1 year old and/or has less than 5,000 miles on it, you have to pay sales tax to the State of California upon entering this state as if you had purchased the car here even if you already paid sales tax in another State or were exempt from paying sales tax. Double sales tax whammy!

So, we pay the money (of course, we had no choice), register the Jeep and end up paying it off and selling it one year later (last year) when we bought David his new Ford ShelbyGT500. We pay the sales tax and actually pay cash for the whole car and leave the dealership with the registration for the year taken care of.

Fast forward to this month:
We get our bill and it's $429.00. $355 of that total is a License Fee, which is basically a property tax on all vehicles that is determined initially by the purchase price of the car. Yeah, well, we paid $57,000 for David's car and, apparently, California feels that if you can afford a car like that, you can afford nearly $500 a year to drive it. argh! AND, it seems this amount will decrease only a slight amount, over the next 11 years OR it will reset itself should we purchase another vehicle.

Talk about frustration: we get screwed on sales tax two years ago and get another lesson in just how expensive it is to live in California this year. I guess David will be driving that Mustang for the next 20 years or his new car will be "used".

If you are planning to buy a new vehicle, check out this Vehicle Registration Calculator to see what you will owe.

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