Two different tax systems: private sale vs. dealer
The first question that decides your tax bill is who you bought from. BC treats a private sale (buying from another person) very differently from a dealer sale (buying from a GST-registered business).
Private sale: You pay PST only. There is no GST on a used car bought from a private individual. For a passenger vehicle the PST rate is 12% on values under $125,000, 15% from $125,000 to $149,999.99, and 20% at $150,000 and above. You pay this when you register and insure the vehicle at an Autoplan broker.
Dealer sale: You pay 5% GST plus PST, and the PST scale starts lower and climbs in finer steps: 7% under $55,000, then 8%, 9%, and 10% through the $55,000 to $124,999.99 range, 15% from $125,000 to $149,999.99, and 20% at $150,000+. Because GST is added on top, a dealer car can carry more total tax than a private sale at the same price, though dealers often offer warranties and financing that private sellers cannot.
For the vast majority of British Columbians buying an everyday used car privately, the number that matters is 12%.
The rate table at a glance
Private sale, passenger vehicle: under $125,000 = 12% PST; $125,000 to $149,999.99 = 15% PST; $150,000 and over = 20% PST. No GST.
Dealer / GST-registrant sale, passenger vehicle: under $55,000 = 7% PST; $55,000 to $55,999.99 = 8%; $56,000 to $56,999.99 = 9%; $57,000 to $124,999.99 = 10%; $125,000 to $149,999.99 = 15%; $150,000 and over = 20%. Plus 5% GST on all dealer sales.
Note that the higher bands are tied to the value of the vehicle, not just the sticker price you negotiated. As the next section explains, for private sales ICBC may use a book value that pushes you into a higher number than your bill of sale suggests.
The rule that catches people: tax on the greater of price or book value
Here is the part that surprises buyers. For private sales, and for vehicles imported into BC on or after October 1, 2022, PST is calculated on the greater of your purchase price or the vehicle's average wholesale value as listed in the Canadian Black Book.
In plain terms: if you buy a car for $6,000 but the Black Book average wholesale value is $9,000, ICBC charges 12% PST on the $9,000, not on what you actually paid. You would pay $1,080 in tax instead of $720. The province built this rule to stop people from writing a fake low price on a bill of sale to dodge tax.
The problem is that book value is a generic average. It assumes a car in normal condition for its year and typical mileage. It does not know that your specific car has 280,000 km, hail damage, a salvage history, a blown transmission, or rust. When your real-world car is worth genuinely less than the average, the greater-of rule taxes you on value your car does not actually have.
When you are likely being over-taxed
You should pause before paying if any of these describe your situation, because the Black Book figure probably overstates what your car is worth:
Unusually high mileage for the year. Significant unrepaired damage (collision, hail, flood). A rebuilt or salvage-branded title. Mechanical problems that would cost thousands to fix. A genuinely low arms-length price you can document, for example a sale between people who are not related but the seller simply wanted a quick sale.
If your bill of sale is well below book and the gap reflects real condition, you are a candidate for documenting a lower value rather than accepting the book figure by default. The savings are simply the rate (usually 12%) multiplied by the difference between book value and your car's true value.
How a FIN-320 appraisal lowers the tax
The Government of BC provides an official path for exactly this situation: the FIN-320 Motor Vehicle Appraisal form. It is the document ICBC accepts to charge PST on a vehicle's actual appraised value instead of the Black Book average.
A qualified appraiser inspects the vehicle, records its true condition, mileage, and any damage, and assigns a fair market value on the FIN-320. You bring that completed form to your Autoplan broker when you register the car, and PST is assessed on the appraised amount.
Example: book value $9,000, but an appraiser documents the car's real value at $5,500 because of high mileage and prior damage. At 12% PST, you would owe $660 instead of $1,080, a saving of $420. As long as the appraisal fee is less than the tax you save, the form pays for itself. This is the single most common reason BC drivers get a used car appraised: not for insurance, but to avoid paying tax on value their car does not have.
Other situations: gifts, transfers, and out-of-province cars
Gifts and family transfers follow their own rules. BC uses the FIN-319 Gift of a Vehicle form (the ICBC gift letter) and the APV9T transfer/tax form. Eligibility depends on the relationship and circumstances, so do not assume a gift is tax-free. See the separate guide on gifting a vehicle in BC.
Out-of-province and imported vehicles registered in BC on or after October 1, 2022 are subject to the same greater-of-price-or-Black-Book rule as private sales, which means a FIN-320 appraisal can apply here too if the vehicle's real condition is below book.
If you are bringing a vehicle in from another province, it will also need an out-of-province inspection before it can be registered; the tax assessment happens at registration alongside that process.
A quick worked example
Say you buy a 12-year-old SUV privately for $4,800. It runs but has 310,000 km and a repaired front-end collision in its history.
Default outcome: ICBC pulls the Black Book average wholesale value, which comes back at $8,200. PST at 12% on $8,200 is $984.
With a FIN-320: an appraiser inspects it and documents a fair value of $5,000 given the mileage and accident history. PST at 12% on $5,000 is $600.
Difference: $384 saved. If the appraisal cost less than that, you came out ahead, and you have an official record of the car's condition as a bonus.
FAQs
How much tax do you pay on a used car in BC?
From a private seller you pay PST only: 12% on most cars (those valued under $125,000), 15% from $125,000 to $149,999.99, and 20% at $150,000 or more. From a dealer you pay 5% GST plus PST starting at 7% and rising in steps with the vehicle's value. There is no GST on a private sale.
Is there tax on a used car bought in a private sale in BC?
Yes. Even between two private individuals, BC charges PST when you register and insure the vehicle. The standard rate is 12% for most cars. The only thing that changes from a dealer sale is that no GST applies to a private purchase.
Is PST charged on what I paid or on book value?
For private sales and for vehicles imported into BC on or after October 1, 2022, PST is charged on the greater of your purchase price or the vehicle's Canadian Black Book average wholesale value. If book value is higher than your price, you are taxed on the book value unless you provide an appraisal showing a lower actual value.
How do I avoid overpaying tax on a high-mileage or damaged car?
Get a FIN-320 Motor Vehicle Appraisal. It is the official Government of BC form that lets ICBC assess PST on your car's true appraised value instead of the Black Book average. If your car is genuinely worth less than book because of mileage, damage, or a salvage title, the appraisal can save you the rate (usually 12%) on the difference.
Who pays the tax when you sell a used car in BC?
The buyer pays the PST, not the seller. It is collected when the buyer registers and insures the vehicle at an Autoplan broker. The seller's job is to provide an accurate, signed bill of sale and the vehicle's registration/transfer documents.
Does a FIN-320 appraisal always save money?
Only when your car is actually worth less than its Black Book value. The appraisal saves you tax equal to the PST rate times the gap between book value and the appraised value. If your purchase price is at or above book value, there is nothing to correct and the form would not lower your tax.
Informational only, not tax or legal advice or an ICBC determination. Rates and rules can change; confirm current PST rates and forms at gov.bc.ca before you register a vehicle.