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In North Carolina, there is a flat-rate highway-use tax of 3% when you buy a car.
When you’re looking at new or used cars, it’s easy to concentrate on the sticker price and forget about any additional costs. But to make a budget for your car purchase, you’ll need to factor in sales tax as well. The exact amount of money you’ll pay in sales tax depends on where you’re buying your car.
North Carolina doesn’t charge regular sales tax on vehicle purchases. Instead, you’ll pay a flat-rate highway-use tax of just 3%. That’s low compared to the national average!
To learn more about the taxes you’ll pay when you purchase a car in North Carolina, check out this helpful guide by
car insurance
expert and licensed broker super app Jerry
. Then stick around until the end to find cheap car insurance in North Carolina
in seconds!Make auto loan refinancing easy with PriceProtect™
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4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversHow much is the car sales tax rate in North Carolina?
In North Carolina, the flat, highway-use tax of 3% is applied to all vehicle purchases in the state. While the regular sales tax in North Carolina can range from 4.75% to 7.5%, if you’re buying a new or used car, you will always pay a tax rate of just 3%.
MORE: 7 things to look for when buying a used car
How are car trade-ins taxed in North Carolina?
To help you save money when buying a new car, most dealerships allow you to trade in your old vehicle in exchange for credit. In North Carolina, you won’t be taxed on the value of your trade-in.
To keep things simple, let’s imagine that you’re buying a new
Kio Rio
for $19,000 in North Carolina. You want to save some money on your new car, so you decide to trade in your old Honda Accord
for a $2,000 credit. Because you aren’t charged tax on the credit earned from your trade-in vehicle, you’ll only pay North Carolina’s highway-use tax of 3% on $17,000 of your purchase. If your dealership offers you a rebate or incentive on your car purchase, you should be aware that the North Carolina highway-use tax is applied to the full price of the vehicle before any cash incentives or manufacturer rebates. Rebates and incentives are still a great way to save money, but you’ll be taxed for the total cost of your new car.
How to calculate sales tax on a car in North Carolina
If you’re purchasing a vehicle in North Carolina, you will always pay a flat 3% highway-use tax. The state and county sales tax rates do not apply to vehicle purchases anywhere in the state.
Key Takeaway All vehicle purchases in North Carolina are subject to the 3% highway-use tax.
Exemptions from North Carolina car sales tax
You will need to pay the highway-use tax on almost all vehicle purchases in North Carolina, but there are some specific circumstances where you might be exempt. If you believe you qualify for an exemption, you will need to fill out an
MVR-613 form
and return it to the North Carolina DMV. To see if you qualify for a highway-use tax exemption, visit the North Carolina DMV website
.How to estimate North Carolina tax, title, and registration fees
The highway-use tax isn’t the only extra charge you’ll be responsible for when buying a car in North Carolina. Most dealerships will also charge a documentation fee with any car purchase. Additionally, you’ll need to pay to transfer your license plates and cover the fees associated with your title and
vehicle registration
.Here’s a list of extra charges you should be aware of if you’re buying a car in North Carolina.
Cost type | Average cost |
|---|---|
Highway-use tax | 3% |
Registration fee | $28 to $59.75 |
Title fee | $40 |
Plate transfer | $15 |
Documentation fee | $550 |
Make auto loan refinancing easy with PriceProtect™
Make auto loan refinancing easy with PriceProtect™
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversHow to find affordable car insurance in North Carolina
Once you’ve picked out your new car and figured out how much it’ll cost, including the highway-use tax and extra fees, you’ll need great
car insurance
before you can hit the road. Finding the best coverage can be tough, but that’s where Jerry
comes in.Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!
“I was paying $350 a month for my new car. WithJerry, I set up a new policy in under 30 minutes that will save me over $1000 a year!” —Mariah K.
Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversFAQs
How much is sales tax on a used car in North Carolina?
In North Carolina, the 3% highway-use tax applies to both new cars and used cars.
By Alison Daurio
Expert Insurance Writer
Reviewed by Jessica Barrett.
- How much is the car sales tax rate in North Carolina?
- Exemptions from North Carolina car sales tax
- How to estimate North Carolina tax, title, and registration fees
- How to find affordable car insurance in North Carolina
- FAQs
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