Buying a new car is very exciting and a bit stressful as well. For many people, a car is the biggest purchase that they will make aside from a home and education. That's why knowing exactly how much you'll pay is important. After all, you don't want to be coming up short after finding the perfect ride. The most obvious way to control your budget is to know the sticker price that you can afford and to understand how your interest rate will affect your monthly payment if you're financing.
However, it's also critical to understand what you need to spend to get your new car legal to drive on the road. This includes things like registrations, inspection, title transfer and sales tax. In Missouri, calculating a vehicle tax can be confusing since it involves both state and local tax rates.
Who Must Pay Missouri Vehicle Taxes?
Any resident of Missouri who purchases a car or other vehicle needs to pay Missouri auto tax. The tax needs to be paid within 30 days of buying a vehicle. If this isn't done, the state will assess a $25 late fee for every 30 days, with a maximum fine of $200. However, if you're planning to use your vehicle regularly, you'll need to pay Missouri auto taxes almost right away. That's because in order to transfer license plates or get new ones, you need to prove that the Missouri car tax has been paid.
How Much Are Missouri Car Taxes?
Missouri vehicle tax is 4.225 percent of the sales price of the car. If you used a trade-in, you should deduct the trade-in amount when figuring out the sales price on which you will be taxed. Missouri vehicle taxes add up quickly. For example, if you buy a $10,000 car, you can expect to pay $422.50 to the state.
However, that isn't the only tax you'll pay. After purchasing a new vehicle in Missouri, you also need to pay local vehicle sales tax. This rate is set by each county in the state and generally runs between 1 percent and 5 percent. The local vehicle tax rate is added to the Missouri auto tax, meaning that most people in the state will pay between 5 and 11 percent tax on new vehicle purchases. Because of the differences in local tax rates, actual Missouri car taxes can vary greatly. The state has a tax calculator that can help you find the specific tax rate for your situation.
Can I Finance Missouri Auto Taxes?
If you're taking out a loan to pay for your car, you can often include taxes and fees in the amount that you're financing. Car dealerships are often able to roll this right into the financing package, making it easy for you to pay your Missouri car taxes without stressing. However, if you're getting financing through a bank or other third party, you need to be sure to plan ahead in order to have your Missouri vehicle tax covered by the loan. If you're approved for a $20,000 loan, be sure to choose a car that comes in well below that price so that you'll still be able to pay the taxes with the borrowed money.
Kelly Burch is a freelance journalist living in New Hampshire. Her writing on educational issues has appeared on Bright, The Washington Post, We Are Teachers and School Leaders Now.