Question for car sales people-?

California used car sales tax question?

• Say I bought a car for $20,000 and assume for simplicity California county sales is 10%, so I paid 22,000 at the time of sale. Say 3 years later I sell the car to a private party for $10000. The buyer will pay the 10% tax (1000) at the time of sale. My question is should the seller (me) not get a tax refund for 10% of 10000? Otherwise the same car originally worth $20000 has gotten taxed twice for a total of $3000? If there is no tax refund, then isn't leasing a better option (assuming I want to get a new car at the end of 3 years), because then I pay taxes only on the portion I have used the car for.

• Answer:

  Why would you get a refund? You buy a car...you pay tax. That's the way it works. You are correct when saying that you would have saved taxes leasing. That is one of the benefits of leasing. Would it have been a better option? Only you can determine that. All you would have done is saved tax $$$. That does not mean it would have been a better option.