California sales tax on newly and used vehicles is 7.25%. Apart from the 7.25% state sales tax, there is a country tax which vary from state to state but that is dependent from where car is purchased. E.g. in California, there is a tourism fee on rental car at a rate of 3.5% and has a $15 title transfer fee, or $20 for out-of-state vehicles. Further, few areas may also have an added city tax to total surcharge. In LA, this rate goes as high as 10.25%.
Besides, state sales tax and tourism taxes, California cities and other localities may levy car rental surcharges. Moreover, Airports may also levy additional charges, which may result in increase the total cost of car rental.
Beyond taxes and fees, car rental insurance is also levied in addition to sales tax, country tax, city taxes, airport taxes etc. which increase car rental cost significantly. Unlike in most of the states, California rental car companies don’t automatically cover liability protection as part of the standard rental agreement. (Some companies may provide the minimum primary liability protection cover to international renters with driver’s licenses which show their registered address outside the United States.
Which means drivers should cover their own liability insurance when renting in CA. Generally, US residents should already be covered by their regular auto vehicle insurance but drivers should also ensure that they have the minimum level of liability insurance cover from their own insurance company. If this is not available then, renters should buy liability insurance cover through car rental company.
Further, if you purchase a car without paying sales tax, you have to pay use taxes separately. This rate is may be as same as the local sales tax and shall depend on the county in which you register your vehicle.