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The Cheapest Autos to Tax in the United States


Various taxes apply to autos driven in the United States, and it is through car reviews that you can spot which models attract less tax.

A registration fee must be paid every year in every state to fund the maintenance of public roads. The fee varies according to the type of vehicle. In some states, electric vehicles attract a lower fee.

There are sales taxes in 45 states which apply to autos, which can be less than three percent or more than eight percent, with a national average of 5.75 percent. Some counties, municipalities, and even school districts also have a sales tax. As any Mazda 3 review will tell you, this auto is cheap, and you will make savings when you pay sales tax and even more on insurance. In some states, you can reduce the amount you pay by trading in a vehicle.

Vehicles weighing more than 55,000 pounds are subject to a federal highway use tax, which encompasses buses, truck tractors, and trucks. This tax does not apply to vehicles used for 5,000 miles or less on public highways, or 7,500 miles or less in the case of agricultural vehicles.

Gas guzzling passenger autos that fall short of fuel economy standards have been subject to extra tax since 1978. This ranges from $1,000 for vehicles achieving 21.5 miles per gallon (mpg) of gas to $7,700 for those that achieve only 12.5mpg. The extra tax is paid by manufacturers and importers of vehicles and passed on to consumers. It does not apply to used autos. An executive order passed by the Obama administration will make such autos extinct by 2025. No longer will you be able to have your eyeballs thrust back into your skull in your Ford Shelby Mustang, but $1.7 trillion less will be spent on fuel and greenhouse gas emissions will be reduced.

There are tax credits for electric vehicles of $2,500 to $7,500. A good auto dealership will say which vehicles qualify, while the Energy Department provides a list at its website. The size of the credit depends on the size of the auto's battery, with hybrid Chevy Volts receiving the maximum amount. Electric cars currently available are the Ford Focus, Nissan Leaf, Mitsubishi I, Coda sedan, and Wheego Life. There are many state and regional incentives.

There is a tax credit for conversion to electrical power of 10 percent of the cost of the exercise, with a maximum of $4,000. Diesel vehicles might be eligible for a tax credit of as much as $3,400. Credits are phased out for manufacturers when they sell 60,000 hybrid or diesel vehicles, as occurred with Honda due to the Insight. Vehicles purchased after 31 December 2010 are ineligible.

SUVs used for business purposes and weighing more than 6,000 pounds but less than 14,000 pounds receive tax deductions. If the SUV is used for recreation, the deduction is reduced by that percentage. Interestingly, a Toyota Kluger review will tell you that not all SUVs attract high tax fee. Indeed, the insurance and tax costs for this car are quite reasonable for a vehicle in this segment.

A federal tax credit of $4,000 for natural gas-powered autos expired on 31 December 2011, although natural gas proponents seek to have it reinstated. Credits for conventional hybrids and clean diesels such as the Toyota Prius and Honda Civic ended with 2010. Such vehicles do not have batteries which can be connected to the power grid.

Good news was received by U.S. drivers when the federal luxury car tax was abolished in 2002. The tax had diminished gradually since its introduction in 1990, and was only four percent by 2002. It was not renewed by Congress due to its unpopularity with consumers and automakers.