What Does My Arizona Vehicle Registration Fee Go Towards?

Sun Devil Auto Expert, published on 03/14/2016

Once you purchase a new or used vehicle, you will need to obtain registration for it. Certain fees are associated with registering your car, and it helps to know exactly what you are paying for and where your money is going. You will likely find you are paying for items that are ultimately for your benefit.

Fee Breakdown

Every state is different, but currently in Arizona, your vehicle registration fee is broken down into the following categories: 

  • $8.00 registration fee
  • $4.00 title fee
  • $1.50 fee for air quality research
  • Vehicle license tax

The vehicle license tax is the only non-fixed value, but the good part is that it will slowly decrease from one year to the next. 

Vehicle License Tax

This tax is the costliest component of registering your vehicle, and you should be able to calculate what yours will be before you submit your paperwork. First, you will need to determine the assessed value of your automobile, which is 60 percent of the initial retail value. A reduction of 16.25 percent will take place for each subsequent year. For example, a vehicle that is initially valued at $20,000, the assessed value for the first year would be $12,000.

Do not worry. You will not be paying $12,000 for the vehicle license tax. There is still more to be done. In order to determine what your actual tax would be, you will need to calculate your rate based on whether you bought a used or new vehicle. For used cars, you will pay $2.89 for every $100 in assessed value. For new cars, $2.80 will need to be paid for every $100 in the assessed value. Using the example above, the assessed value is $12,000. Assuming that this vehicle is new, we would divide 12,000 by 100 to come up with 120. That number is then multiplied by 2.89, so the person in this scenario would need to pay $346.80 in a vehicle license tax for the first year.

What Is a Vehicle License Tax Used For?

This tax goes to several worthy causes. Part of it goes towards the funds devoted to city and county roads. A portion of your vehicle license tax also goes toward a state highway fund to build better roads. Additional portions are distributed into your city and county general fund.

Make sure to renew your registration before it expires, at the end of one, two, or five years depending on your emissions requirement. For more information, contact your local MVD.