Car dealership asking to pay more for tax after contract signing

Maintenance/Repairs
21

“There are two aspects you need to consider. First, is the dealership asking you to pay them for the $500 sales or excise (it’s one or the other) tax,”

In some states it could be Personal Property Tax.

" or are they advising you that $500 is still due?"

They let someone out the door with a car with $500 still due? Hmmm.

“Read the letter carefully, since non-payment of sales tax (yes, even after the purchase and registration is complete) is your problem, not the dealership’s.”

In most jurisdictions the merchant is responsible for payment of sales tax whether or not it was collected from the customer. When dealing with cars “sales tax” is really a “you bought a car tax” and may be handled differently.

“Your RMV or DMV or what have you WILL suspend your car’s registration”

In which case they will most likely send you a letter.

“and nullify your insurance”

Whoa, there, hoss! The State can’t nullify a contract between you and your insurance company.

“and may even suspend your license to drive.”

Seems unlikely. On what grounds?

“If you get pulled over on the road and these things have happened, you will pay a lot more than $500. You may even need a lawyer. You can sue the dealership if they are at fault. But you have a verbal agreement, not a written contract. You’d need to prove your position in a civil court. You have the burden of proof.”

The proof is that the dealer let the OP have the car. The burden is on the dealer.

22

More important is does the OP have the actual title.

23

The fact that you paid with cash and checks is somewhat offputting.

24 
If it is a property, sales or use tax the dealer is likely acting as a agent of the state.  Under those conditions I believe most states would require that YOU pay the tax.

The only place you are going to get a true answer would be the tax department. Really. Most have people there who do really want to help. Having said that, there are some state or local tax departments who only want to collect.

I was the administrative officer for my state tax department for about 25 years.  We were interested in collecting the correct tax AND helping the taxpayer.
25

I’ve read every response. You are still responsible as the would-be title owner of the vehicle for any taxes unpaid on the sale of this vehicle. You signed a contract that you might want to read now. You should also find out what demand is out there and pay any taxes due to protect your ownership or right to title for this vehicle. It is not in your best interest to assume that this is the dealer’s problem. It’s not. It is your problem.
You should document everything and pay the tax bill and sue someone after the fact. But in the meantime, get clear of any tax debt for the car to at least clear the way to getting the title in the mail.

26

The state doesn’t care at all WHO pays the tax, only that the tax is paid.

27

The more I look over this story the odder it sounds.

28

How about this. Go to the motor vehicle registrar or the local tax collector. Pay them the tax and get a letter. Go to the dealer with this receipt and deliver a summons to small claims to produce the title and the amount of tax you are owed from the dealer.

29

I am in the middle of this situation right now over a car i purchased jan 17, 2011 at Koons Tysons Toyota. They called yesterday to say i was charged the wrong sales tax and must pay $838.95 more before they will put on my license plates. I put down $13K and financed the rest with them, and I feel CHEATED! I am going to refuse to pay, even if I need an attorney’s assistance. I am a single woman, who purchased this car on my own, and i feel like i must look like an easy target.

30

Did they charge you MD, VA, or DC taxes? Which one do you live in? You might check with your state government to see if this is legitimate. I know it’s frustrating, but calm down and investigate the issue.

31

Maybe this is a shell game being played on paper. You need to go over all of your paperwork very carefully as it’s possible they could have performed a legal screwing here. Throw a number on that line, put one there, etc. and this could easily get lost in the murky proceedings.

If something looks a bit off you might also consider letting Toyota Motor Company know about it. They give the dealers pretty much carte blanche on sales but they will not condone any fraud.

In the future, never let the dealers handle financing as it becomes too easy to manipulate things. With 13 grand down any bank in the world should finance you.