It’s become pretty common knowledge that the end of the year can be one of the better times to go car shopping. While there is no guarantee that all year end auto dealership sales will affect every single model on the floor, more often than not you can score on a 2013 model while the 2014 models are rolling out on to the floor. Remember, that dealerships are businesses that need to hit sales goals, so I would encourage you to go toward the latter part of the month (especially at the end of a quarter) and even at the end of the day when the salespeople are motivated to get a deal done. But why could from now until the end of the December be a great time to specifically buy a car in Georgia?
Beginning March 1, 2013 of this year, state and local sales tax no longer apply to the purchase of a motor vehicle (except for the 1% transportation tax on the first $5,000 of any vehicle sale in regions that have this tax). All vehicles purchased or transferred into ownership after this date are no longer be subject to the annual ad valorem tax (sometimes called the birthday tax). Instead, vehicle purchases are subject to a new, one-time state and local title ad valorem tax (TAVT) that is paid at the time the owner registers the vehicle and applies for the title with the county. In 2013, this tax is at a rate of 6.5%.
However, what most Georgia taxpayers do not know is what lurks around the corner in 2014. Beginning January 1, 2014, the tax rate will increase to 6.75%. It will increase to 7% on January 1, 2015. It will remain at that rate unless defined revenue targets in the law are not met at which time the rate could adjust up to a maximum of 9%. Wow! Can you imagine a TAVT tax of 9%? How much money can this mean to you if for a vehicle purchase here in 2013?
While ¼ of a percent doesn’t seem like a big number, imagine that you purchase a car (new or used) for $30,000. The savings wouldn’t be huge with about $75 more dollars going into your pocket. However, if you are leasing or buying a luxury car, it could mean several hundred dollars in your pocket in addition to this time of year being a particularly good time to purchase a car. Keep your eye on this TAVT tax especially at the number grows over the next several years.
Your Smart Money Moves readers already know that I am not a big fan of new cars. I haven’t purchased one in over twenty years. However, I am a big fan of saving every dollar I can by being strategic with my financial purchases. So this might be a neat way to buy a holiday gift and put the stocking stuffer of some extra cash in your pocket.
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