Tax Laws in North Carolina for Buying a Vehicle

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    Bill of Sale

    • Whether you buy your car from a dealership or a friend, you must have a bill of sale, says DMV.org. The bill of sale acts as proof that ownership of the vehicle has changed to you. Your local Department of Motor Vehicles will use the bill of sale to determine the amount of local sales tax you owe.

    Highway Tax

    • North Carolina doesn't assess state tax when it comes to vehicles, says the North Carolina Department of Motor Vehicles. Owners pay the local tax, which is determined by the make, model and age of the vehicle, says WakeGOV.com. In addition to that, owners also pay a "highway use" tax at a rate of 3 percent of the vehicle's sales price.

    Registration and Title Fees

    • After you pay your taxes and have your vehicle inspected, you need to register your car, says the North Carolina Department of Motor Vehicles. Take a notarized copy of your vehicle title, if you have one, to your local DMV and complete a vehicle title application, proof of odometer reading, proof of any damages to the vehicle and proof of liability insurance.

    Indemnity Bonds

    • If the car you bought has no title, you can have a new one created in your name through an indemnity bond. To get the title this way, complete a title application in front of a notary public and complete an Affidavit of Facts. A DMV License and Theft Bureau agent will inspect your vehicle. If it passes inspection, have an insurance company write an indemnity bond worth one and a half times your vehicle's worth.

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