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The question of whether to buy a car in Brazil or the US is common for many. Find out whether it is worth buying a vehicle in the United States and how the rates applied in the North American country work.
Buying cars in the US is a very different experience compared to Brazil. Starting with the financial and bureaucratic aspects involved in buying a car. The difference between the countries is quite striking. Therefore, some questions arise, such as whether it is worth buying a car in Brazil or in the US, or whether there is IPVA in the US. In this article, we will clarify these doubts.
Is there IPVA in the USA?
Buying cars in the US has significant financial advantages. Low prices combined with affordable financing options make the process attractive. The automotive market in the US, impacted by local purchasing power, is considerably larger than that in Brazil.
To get an idea of whether it is worth buying a car in Brazil or the USA, we will use the example Toyota Corolla, which would require about 106 months of work at the national minimum wage.
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In contrast, in the United States, it would take just 11 months to achieve the same goal, considering the current minimum wage. Each US state has its own tax rules. In Florida, for example, buyers face a number of charges when purchasing cars in the US.
Interestingly, half of the American states do not charge the tax that is quite famous in Brazil, known there as Auto Property Tax (APT). Virginia, however, has the highest rate. In Florida, this tax is non-existent, providing savings to owners who are unsure whether to buy a car in Brazil or the USA.
How does it work?
In the United States, the equivalent of IPVA, charged in Brazil, varies from state to state, and is often called “Vehicle Registration Fee” or “Property Tax” (property tax).
Unlike the Brazilian IPVA, which is generally a fixed annual tax based on the value of the car, in the US vehicle taxes depend on local laws, which can create large variations in the amount charged.
In some states, such as California and Virginia, the tax is calculated based on the market value of the vehicle and its age, and rates can be high, especially for newer and luxury cars. Other states, such as Montana, have lower rates or a flat rate regardless of the value of the car, attracting vehicle owners looking to save on taxes.
In states like Oregon and New Hampshire, for example, vehicle owners do not pay this type of annual tax; they only pay a registration fee when purchasing the vehicle, which can significantly reduce costs. Overall, while Brazil has a more standardized and annual IPVA charge, in the United States, the cost of maintaining a car varies greatly, influenced by each state's tax policies and the vehicle's profile.
Is it worth buying cars in the USA?
Now that we know if there is IPVA in the USA, it is important to know how the American automotive market works.
In the general US scenario, although taxes and fees are charged during the purchase, the subsequent cost is limited to the annual renewal of the registration. Furthermore, when buying cars in the US, in the event of a transfer of ownership, the license plate remains with the original owner, simplifying the sales process.
Those who live in the US have also noticed the strong presence of car manufacturers in the country. Popular models dominate the market, further reinforcing the attractiveness of local offerings. The differences in price and accessibility when buying a car in Brazil or the US are substantial.
To buy cars in the USA, in Florida specifically, the buyer will pay the following fees:
- Registration fee (initial registration fee);
- Title fee (ownership transfer fee);
- Sales tax;
- License plate fee (fee to issue a new plate);
- County tax.
New IPVA Law in Brazil will arrive in 2025
Now that we know whether there is IPVA in the USA, it is important to remember that, starting in 2025, a group of people who live in Sergipe will be able to count on exemption from paying the Motor Vehicle Property Tax (IPVA).
The new law, which has already been published in the DOU, expands the benefit to vehicles worth up to R$120 for people with physical, visual, severe intellectual disabilities, Down syndrome and autism.
Previously, the IPVA exemption was only granted to cars worth up to R$70. With the new legislation in Sergipe, the limit has been increased, which means that more people will now be able to benefit from the partial tax exemption.
People with physical, visual, severe intellectual disabilities, Down syndrome and autism, as well as their legal representatives, may request exemption from IPVA, as long as the vehicle is in the beneficiary's name and has a value of up to R$120.
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