If you purchase a car from a private seller, in New York State you have to pay sales tax at the DMV. The tax amount is determined by the sale price of the vehicle. My question is: Can the amount that you will have to pay for tax be added to the bank loan; in turn not having to pay the taxes at the DMV because it’s already included in the loan? (I’m in New York State)
I know that taxes are not payable to the bank. But if you were to purchase a car from a dealer, they could add all the costs, including registering the car, and taxes, and you could get a loan from a bank to pay for all of that. But my question is, when buying from a private seller, can the tax be included in the loan so as to give the buyer a break from having to pay cash out of his pocket to pay the tax at the DMV. It is in NO way a tactic to try and get around paying taxes, it is simply having the cost of the tax included in the loan. The state will still get the tax money.
Can sales tax for a private party car purchase be added to a bank loan?
21
Apr
Paul Ding
April 21, 2010 at 2:12 am
Taxes aren’t payable to the bank. They’re payable to the state. You still have to pay the taxes, whether you borrow the money to do so or not.
If your banker is loaning you the full purchase price of the car, he ought to have his head examined. If he’s loaning you not just the full purchase price of the car, but sales tax as well, FDIC oughta have the bank’s books examined.
Pat K
April 21, 2010 at 2:23 am
You would be required to pay to the state (the DMV) the sales tax on the car purchase. So no, you would still have to pay the tax at the DMV. However, you could probably include the sales tax in the bank loan. That amount would just increase the amount you would owe to the bank. Hope that explanation helps.