We all have our dream cars and even thinking about purchasing them brings positive emotions. But, in reality, the buying process can be totally different. Actually, it’s not as easy as we could imagine. Even so, you don’t have to worry, as I’ve combined a bunch of necessary information that helps you to make the whole process easier. Wisely planned trading will save you money and time.
Below we’ll shortly review the purchase process, what you should take into account while choosing a car, and clarify the official part. The official part of the trading might seem too complicated if you live in Canada. As you might already know, the law is different for each province and taxes depend on many details. For that reason, below we’ll discuss what taxes are on used cars in BC (British Columbia) and try to simplify the complicated and boring process. So, let’s start the journey and explore it in detail!
Step by step, how to choose a vehicle
I guess you already have a dream car that meets all your requirements. While thinking about vehicles we have to combine many details. Nowadays, there are about 250 automobile models in the world and it’s quite hard to choose the one in a big variety. If you have not yet decided the model you want to purchase, below is the list that helps you to make a decision.
- Budget – Defining a budget will help you to search for automobiles within a certain amount of budget online. There are many websites, where you can find cars under the budget, for instance, CarMax. Remember, what tax do you pay on used cars in bc, is defined by the cost of the car as well.
- Budget on a monthly cost – Besides the automobile cost, you should determine the monthly budget for the fuel, insurance, and repair cost. That will help you to decide, whether you need a fuel-efficient car or not.
- Living area – Your living area can define the type of car. It will help you to decide which car type fits you the best, sedan, coupe, SUV, or hatchback. If you live in a mountainous area then you should definitely choose an SUV.
- The purpose and hobby – Likewise to the previously mentioned aspect, realizing the purpose and hobby will help you to define the car type. If you need a car for getting to the office in the city center, where the parking area is limited, you might don’t think about purchasing an SUV. Besides, if you love spending vacations in mountainous areas, then you might search for a four-wheeled hatchback.
Analyzing and combining all the above-mentioned details will help you to correctly choose a model. Since you already know how to pass the first step, we can move on to the next step and explore how much tax on used cars in bc is mandatory.
What taxes are on used cars in bc – GST, PST, and HST
As I’ve already mentioned above, talking about the purchase process can be boring and time-consuming. Of course, we all think only about the comfortable journeys with our “best buddies” and forget that we have to pass many boring steps to get to the car. But still, the process can be easier if we own all the needed information. First of all, before exploring the exact amount of taxes that we should pay upon purchasing used vehicles, we should review what taxes are on used cars in bc.
While reviewing information about the tax law, you might meet the following abbreviations, GST, PST, and HST. At the first sight, it seems very confusing, but don’t worry, I’ll try to explain it in simple words.
- GST – Under the abbreviation is meant Goods and Services Tax. It’s a federal tax of 5% that is mandatory to pay for any individual. Only in the case of purchasing a car from a private owner, you don’t have to pay the GST.
- PST – Provincial Sales Taxes (PST) is paid in case you buy an automobile from the private owner.
- HST – HST is a harmonized sales tax. It combines GST and PST. In other words, it’s the total amount of what tax do you pay on used cars in bc.
What tax do you pay on used cars in bc?
After clarifying the main differences between tax-related terms, I guess you already have a clearer picture of the taxation. Now we can move on and explore in detail how much tax on used cars in bc you should pay. As I’ve already mentioned, the cost of a vehicle defines the amount of the tax fee. The tax fee may be different whether you bought it from a dealer or private seller. Below you can view the tax fee in case of purchasing a vehicle from a dealer.
|Purchase price||PST rates|
|55,000$ — 55,999.99$||8%|
|56,000$ — 56,999.99$||9%|
|57,000$ — 124,999.99$||10%|
|125,000$ — 149,999.99$||15%|
Please note, the above-mentioned tax fee applies even if you received a vehicle as a gift. Besides, you might wonder what happens in case of buying a car from a private owner. Here are all the details:
|Purchase price||PST rates|
|55,000$ — 55,999.99$|
|56,000$ — 56,999.99$||12%|
|57,000$ — 124,999.99$|
|125,000$ — 149,999.99$||15%|
I guess the above-mentioned tables helped you to determine what taxes are on used cars in bc. As you see the tax fee may vary between 7-20% depending on the seller source and the cost of a vehicle. I know paying an extra 20% tax fee is not too exciting, but there is some tip that helps you to reduce the cost. Let’s explore the amazing news!
How much tax on used cars in bc can be lowered by trade-in?
The easiest way to save money on what tax do you pay on used cars in bc is a trade-in. Let me explain in detail how it works. If you own a vehicle that you want to replace with the help of a dealer, you can trade-in and reduce the tax fee on the purchase. For instance, if your old car was valued at 5,000$ and the used vehicle costs 35,000$, you will have to pay the tax fee only for the difference of 30,000$, instead of 35,000$.
Of course, dealers always evaluate cars much cheaper than they actually cost. This is the main idea of the dealership and how they get the benefit out of buying and selling used vehicles. You might sell your car much more expensively, but in that case, tax fee applies to the total amount of a new vehicle you are going to purchase. Hence, if you analyze all those details, you might see that it’s much profitable to trade-in, save tax fees and make the process much easier.
All in all, nonetheless the official part of trading might seem boring, hopefully, you found all the above-mentioned information useful. We’ve covered all the needed details related to purchasing a used vehicle. Now you know what details should be taken into account for choosing a model correctly, what the difference is between GST, PST, and HST. And last but not least, we’ve explored how much tax on used cars in bc should be paid upon different circumstances and the value of a car. I’m sure now you are ready to purchase a vehicle with a great deal and enjoy your rides. Good luck with your purchase!