Question

What was the price of the car before the sales tax was added?

Answer 1

Answer:

One big reason why a car’s total price won’t match the price on its window sticker relates to fees charged by a car dealership and the automaker. For example, although a car may cost $19,995 according to the window sticker, that figure might be the price before the addition of a destination charge, which is a pricy manufacturer’s fee that can add up to $1,000 to the price. A dealer may also charge a documentation fee to prepare the vehicle’s documents for sale, and this figure can sometimes cost as much as $500. There are mandatory government fees too, such as the cost to process the car’s title work or change the registration to your name.

Step-by-step explanation:

Dealer and manufacturer fees usually aren’t the biggest add-ons to a car’s purchase price. The priciest addition typically comes in the form of taxes, since most states levy a sales tax on the entire price of a new or used vehicle. Since sales taxes can range as high as 8-10 percent in some areas, this can easily add thousands of dollars to your vehicle’s purchase price. For example, a $20,000 car purchased in an area with a 7 percent sales tax will cost an extra $1,400 on top of the purchase price, while a $30,000 car bought in a place with a 9 percent sales tax will see a whopping $2,700 price boost before you can drive it home.