Can dealer back charge you tax after buying car?


I live in California and bought a used car from a Toyota dealership about 2 months ago. I have already received the new license plate, registration, and owners slip in the mail from DMV. This week, they sent me an invoice stating they charged the wrong sales tax for the car and that I owe then more money. Do I have to pay them or should I just ignore them. The car was paid in cash. Thanks you your help!

I believe this has been posted here before and the jury is out on this one. The dealer normally should calculate the fees with some safety margin. Every time I do this, I get a check from them for some 1-20 Dollars difference. In your case, I think you might just sit tight since you have all the papers and have the dealer absorb the extra $$.

WHY does this happen so often? Dealers are in the business of selling cars; you’d think they’d know how much tax to collect. Yet, this seems to be a monthly topic.

If the car was paid cash, you already have the pink slip and registration, I wouldn’t do a thing. If it’s a sizeable enough amount that they are willing to pursue it through legal channels, let them. Otherwise, if it was just an honest mistake, then it’s theirs and they can absorb the cost.

If you got home and McDonalds called you and said they forgot to include the sales tax on your Big Mac would you go back and pay them?

I seem to remember this same complaint being made on this forum several times in the past year.
I’m also sure there was a Toyota dealer involved in one and possibly the second along with California being involved.

If it’s mistakes then carelessness must be part of the business model out there. Imagine if they pull this on say 200 car buyers in one month. Some may pay all or part without a fight. That’s a lot of money on the bottom line.

Personally, I don’t think the dealer has a legal leg to stand on and I wouldn’t even respond to them unless you hear from an attorney.
You could tell them you noticed a mistake in the amount you offered them for the car which conveniently matches the amount they say you owe so maybe there can be a quid pro quo…

In Ill when I lived there sales tax was due upon registering the vehicle based on their appraisal of the car value. I do not know the procedure in your state, if it were me I would talk to someone in a position to make decisions offer to pay the tax and receive x amount of oil changes to call it even. Sometimes negotiating is easier than fighting.

When this was discussed in the past year on this forum, it was noted that some dealers were caught using this technique to illegally get more money from the buyer.

Not sure about CA but in PA you cannot get your title until the taxes are paid. Check with the state DMV, see if the records for the car are clear. If they are, give the dealer all the consideration they are due (none). That is assuming the letter is from the dealer and not from the DMV. If the letter is from the DMV you need to find out if the dealer paid the taxes or held them, that is another problem and you could be on the hook for the balance of the taxes.

It is also possible that the dealer paid the taxes owed so that you could get the registration completed even though they were short changed. No comment on probability. One way to determine if they undercharged you is to pull out your receipt for the vehicle. Each tax charged should be a line item, and the % tax changed may be listed. There may be more than just sales tax; I don’t know what Cali charges when the title is transferred. If their math is correct on the sales receipt, then ignore the call. If not, consider giving them the difference. It is the ethical thing to do, but only if you really owe it. Forget about teaching them a lesson they will never forget.

Google is your friend . You can find the sales tax rates online by county and city . Do that first and compare the results against your paper work .

Call the DMV. If they say no taxes are owed and you have a “Paid in Full” on your contract seeing as how you paid cash then tell the dealer to can the incompetent help and hire someone else.

Taxes seem to be high in CA regarding car sales and since the complaints on this forum seem to originate from CA it could be the dealers are pretending the taxes never exist in an effort to close the deal and get the customer gone.

My feeling is that these oversights are not accidental. It’s planned all the way…

Ditto for what ok4450 said. The buyer is not in control of the taxes they pay. The seller is so the seller takes the loss.

Your title or registration should have the total paid in taxes and registration on it. If it doesn’t, then go to the DMV and ask them to look up what was paid. Then compare that to the contract you have for the sale of the car. If you underpaid, then pay up. If not, see you local district attorney.


I agree on your CA observations. Since I moved here I notice that this state is a bit out there in regard to many issues.

The sales tax in CA depends on the zip code you are registering the car to/where the owner lives. It is not rocket science. The DMV site has a calculator that I always use before even going in to the dealership so I know the approximate.

Would be curious on what the purchase price was and how much this tax is. If it is substantial, I would be more inclined that it might be a bait and switch tactic by the dealer. Essentially they might be making a profit already, but they won’t mind making “more” from naive costumers.

I’m mystified as to why this happens. California sales tax varies by where you live (local taxes passed by populace), but it isn’t hard to find the rate and apply it to the sales price. If the dealer really did make a significant mistake and can demonstrate the error, I’d pay up, as mistakes do sometimes happen. If the difference was a small one, I’d suggest they could pay it to keep a potential future customer happy.

Sounds like a scam to me. A scare tactic to squeeze extra profit from the unwary.

It should not be hard to figure out if you have a bill of sale from the dealer if you payed the correct amount. The only way they could try charge you more now is if it were a clerical error or they made a mistake on the trade in or discounts for you. Depending upon the tax in your state, the sales tax and tittle transfer fees have to be paid before you will receive the tittle. If you have received it,( not the application) breath easy. If you haven’t, it may be a drawn out afair. First, do the math yourself from the numbers provided.
@Keith is right…as far as registering the car is concerned. There is a set amount of sales tax that has to be paid in our state regardless of what you actually paid to the dealer. If In our state, the amount you paid to the dealer matchs the expected amount on the bill of sales and they registered it, , you should be home free. If it is less, you will probably have had to make up the difference where you register the car. Under no circumstances would I hand over any more “tax” monies to the dealer.

Tell them to go pound sand. This is a common scam; they want you to think you’re getting a good deal on the car and then try to hit you up on the back side for more money once the car’s already home and you hopefully like it too much to give it back, but will be scared of angering the government.

If you owe the government money, the government will be happy to tell you. And if you owe the government money, you should send the dealership a certified letter demanding reimbursement for it, because part of buying a new car is that the dealership charges you the tax and then pays it for you. Hidden taxes are not part of the deal.

Along with the others ; tell them no more money from you.
THEIR accounting needs to simply move some of the numbers on their ledger !
show Less profit in column ‘B’ and show more tax in column ‘C’.

There has been similar tactics used in other facets of car sales. Someone drives off with a new car and gets notified a week or so later there’s an error on the paperwork about interest rates, term of the loan, value of the trade was figured incorrectly, etc, etc.