April 8, 2014
Most states have a 1 time first year registration fee (tax) for a vehicle purchase. What is that fee in Iowa? Options?
Most states have a 1 time first year registration fee (tax) for a vehicle purchase. What is that fee in Iowa? Options?
For Iowa it is a 5% first time fee along with the usual 1% giving you a total of 6% for your first year of registration. An easy way to get out of paying this high 5% extra fee is to not buy a new car, a one year old car would not have this fee on it, and the older the car the smaller dollar amount the 1% yearly registration would be. This is one more reason to not buy a new car. You are much better off buying a 4-6 year old car and driving it for the life of the car. Or find a nice condition older car that some old lady has treated like her baby and driving that around until the car is no longer viable to keep running. If you shop around and look at private sellers you can sometimes get a really good deal on a used car that will cost you a lot less in the end.
Well said, Garrett. Let’s review.
In the state of Iowa, if you buy a new vehicle that first year registration will come to 6% of the value of that car. Example: A $30,000 vehicle will cost you $1,800 to insure in year 1. The registration costs drop by year based on the age of the vehicle and the elimination of the 5% one time cost of registration that takes place in the first year. Every time you go through the process of buying new or used car you will pay that 5% one time fee (plus the percentage based on the newness of the car). This is why you should avoid going through this process often in your life. It gets expensive! What to do?
Buy a quality 3 or 4 year old car, get it checked over carefully by a trusted mechanic, and if you choose to buy it, hang on to it for a very long time. Private party purchases will usually provide you the best deal simply because their overhead is much lower than the overhead that a car dealer must bake into the price of a car or truck. Bottom line: Go through as few vehicles as you can in your lifetime and that means buying quality vehicles, maintain them carefully, and then drive them for a very long time. Your future self will thank you one day!