March 20, 2014

Car registration costs are much higher the first time you register your new vehicle. What is the costs in Iowa in the first year?

3 thoughts on “March 20, 2014”

  1. Katherine Graham says:

    The costs in Iowa in the first year are 6% of the total cost of the vehicle. For instance, if you were to buy a Lexus (you want to act like you are rich), you would pay $3,600 in registration fees that first year alone!

  2. Garrett Haag says:

    Registration fees for vehicles up to 11 years old are $0.40 per 100 lbs. plus a percentage of the vehicle’s value:
    vehicles up to 7 years old – 1%
    vehicles 8-9 years old – .75%
    vehicles up to 10-11 years old – .5%
    For vehicles 12 years old and older registration fee is $50
    While a first year cost is a 5% tax on top of the normal registration price.

  3. Mike Finley says:

    Nice job, you two. Let’s piece this mess together.

    If you were to buy a new Lexus for $60,000 in the state of Iowa you would pay a total of 6% (5% one time registration and 1% for the vehicle being less than 7 years old) in taxes on that vehicle when you first register it. This applies to new vehicles AND newly acquired used vehicles. That would equal $3,600 as Katherine stated. Yikes!

    If instead, you kept driving your reliable older vehicle that may be older than 10 years or more, you might pay as little as $50 to register it. Once again, you can look rich (drive the expensive and depreciating Lexus) or you can be rich (drive the reliable older vehicle and invest the money others use to act rich). The choice is yours. The choice is always yours!

    Remember, cars are wealth depleting assets. The more times you go through the process of buying a new car, the poorer you will become. What to do? Identify a quality car (2, 3 or 4 years old ideally), buy it with cash if possible, maintain it consistently over time, and finally, drive it for a very long time (well over a decade).

    This will be easy if your self-image is not tied up into the vehicle you drive and very hard if it is. Know thyself!

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