When you buy a new or used car in Florida, you have to take a lot of expensive factors into consideration. Car insurance is exorbitant - living in our beautiful state means you have to pay top rates for insurance nationwide. Also, Florida tax on the purchase of a vehicle is a part of the full sale price of the car. With these factors in mind, an purchasing a cheap older vehicle can serve you in two ways.
A person over the age of 30 with a good driving history and a car on loan or lease will usually end up paying a minimum of $1600 for 6 months of insurance coverage in Florida. However, the game changes when you buy a car in full and do not have to deal with a loan or lease.
While it may raise your insurance rates if it is a particularly sporty older car like a 2-seater, Honda S2000 or Nissan 350Z, more modest vehicles won’t influence the monthly cost of insurance much, and since you’ll own the vehicle in full, you can lower your insurance coverage to save you money so that you’re not paying the monthly price of a Ferrari to enjoy driving in the Sunshine State.
Florida Sales Tax
Right now, Florida sales tax is 6%. This percentage can make a huge difference on the ultimate cost of your vehicle. Let’s say you finance a $20,000 vehicle - you’re going to have to pay $1,200 to the state of Florida, which will get compounded over the course of the loan and expand even more by the time you’re out of the loan.
Even if you get the vehicle at that $20,000 price, you still have to include all additional fees when calculating sales tax. Any dealer/delivery fee, handling, freight fee, or commission to the salesman goes to the state at the same rate. So that $1,200 number is just an underestimate.
In addition to that, certain Florida counties charge their own sales tax on the first $5,000 spent on the car! And if you’re late paying the sales tax, guess what happens? The Florida Department of Revenue will add an additional 10% as a penalty.
You do NOT have to include the following: registering the vehicle, car title, or license fees.
Owning vs. Leasing or Financing
It will almost always be a better deal to own a vehicle, even if you end up with a beater. Riding around in a jalopy may not seem cool, but it’s going to leave your wallet much thicker at the end of the day. Stay tuned for our follow up blog on the best cars to buy under $5,000 in Florida!
If you need help registering a vehicle, getting a new car title for a sale, or getting custom license plates for your car, contact Auto Tags of Florida!