Buying a car in WA
August 21, 2009 11:43 AM   Subscribe

I'm thinking of buying a used car from a private party. I'm in WA state and have no idea about how sales tax will apply.

Do i pay the tax to the private party, to the state(how?), or do i pay sales tax at all since it's a private transaction? And how do i navigate transferring ownership to me once the sale is complete? I've only ever bought vehicles from dealers so this is a new experience for me. Please help.
Thanks
posted by ramix to Shopping (6 answers total) 3 users marked this as a favorite
 
You'll be charged sales tax when you take the title over to the Department of Licensing office to register it in your name. They will base the sales tax on the amount written on the back of the title. You should also draw up a bill of sale, with the same amount shown on it, plus the name and address of the seller and buyer, the year/make/model of the vehicle and its VIN number.

It's pretty easy, and there are Department of Licensing offices all over ... many local grocery stores, mailbox/packing places, etc. can do this for you.
posted by dacoit at 11:46 AM on August 21, 2009


BTW, yes, I'm in Washington State too. So, just to be more clear:

1.) You negotiate the price with the seller, write up the bill of sale with them, and you both sign and date it.

2.) You pay the seller, adding no tax. The seller writes the selling price on the appropriate space on the title and signs it off to you.

3.) You take the title and bill of sale to your local licensing office and tell them you just bought the car. They'll charge you about $50 for registration, plus sales tax based on the selling price.
They don't take cards, just check or cash.

4.) The car is yours. You'll walk away with your new registration, and your new title will arrive in the mail in a couple of weeks.
posted by dacoit at 11:54 AM on August 21, 2009


In the State of Washington when you buy a used car from a private party you will pay a "use tax" which is calculated based on the average fair market value of the vehicle rather than the reported purchase price. They don't care one whit about what you or your bill of sale claims you paid.

The licensing bureau will use the National Market Reports (formerly known as the "Red Book") to determine the market value. You can contest this but they'll generally want an appraisal from a registered dealer or a repair estimate that is close to the amount below the average market value. Alternately, if you can show them a Blue Book or NADA or other recognized valuation that is within $2,000 of their fair market value, they'll go for it.

Oh, and they want an additional .03% use tax is charged for motor vehicles on top of the market price use tax.

As if this all weren't enough, depending on your ZIP code and whether or not you live in an "urban" area within King, Pierce or Snohomish counties, you will also be charged an RTA excise tax and it is yet another ~.03% based on some value code system that they use. For example, a 2004 BMW 545i will cost an additional $106 above the use taxes if you live in, say, ZIP 98121 (Seattle, proper). This is to recoup the costs from some failed regional transport effort upon which they are still collecting excise tax. It used to be a lot higher but is slowly ebbing away.
posted by bz at 1:10 PM on August 21, 2009


That's true, I stand corrected ... the sales tax used to be calculated based on the bill of sale, but too many people were getting the seller to write an absurdly low price to save them on taxes, so it switched to the new system. It's still basically a sales tax.
posted by dacoit at 1:55 PM on August 21, 2009


I was going to say . . . I thought maybe it had changed, but in 1997 when I registered my very old, VERY high mileage Sentra, they claimed its value was $2300 and wanted to charge me sales tax on that. I had purchased it YEARS before (in Oregon) for $950 and I was PISSED.

My memory is vague, but I think I brought it somewhere (a strip mall DMV or the DEQ place or something?) and had it appraised. Sorry I can't specifically remember what happened, but I'm pretty sure they agreed that it wasn't worth $2300.
posted by peep at 2:18 PM on August 21, 2009


The licensing bureau will use the National Market Reports (formerly known as the "Red Book") to determine the market value. You can contest this but they'll generally want an appraisal from a registered dealer or a repair estimate that is close to the amount below the average market value. Alternately, if you can show them a Blue Book or NADA or other recognized valuation that is within $2,000 of their fair market value, they'll go for it.

Maybe this is true for newer, more expensive vehicles, or for busy offices. But my experience has been, with older and cheaper vehicles and with less busy DOL offices, that as long as the value you claim is even vaguely plausible, they just go by the value you report. And since it isn't like you have to drive the vehicle to the DOL office, how are they to know whether you bought a decrepit beater or a creampuff worth many thousands?

Or maybe some licensing offices are much kinder than others, and you need to make sure you go to a good one? At any rate, in my neck of the woods it is a mark of etiquette for the seller to ask the buyer what price they want on the paperwork, since it's the buyer who is going to have to deal with sales tax issues. When you buy the car, be ready in case that question comes up.

That said, Dacoit describes the process perfectly. I'd add only that many (if not all) DOL offices take cash and checks only -- don't walk in expecting to pay with plastic, and be ready to show ID.
posted by Forktine at 9:38 PM on August 21, 2009


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