You actually only pay it on the net if there is a tradein or swap for Ontario - I might add. If your vehicle gets written off like mine did in July then it helps offset the replacement cost by the taxes from the insurance, so its good that way.
I know registration here is (was?) based on weight, is that what's changed, or just the sales tax part? Or, are you talking about paying sales tax on the stated sales value vs. an estimated retail value?
...California has done registration rates based on vehicle value for years. It's a (word for female dog) when they do it that way, lemme tell ya, but sales tax has always been based on how much you claim to have paid for the car.
I can maybe understand why Texas would choose to do it according to book value (not that I necessarily agree with it). Since there's no state income tax here, yet the state budget isn't significantly smaller than many other places, the government has to supplement its income with other use taxes and other fees, such as the rather stiff telephone tax. Doing sales tax on vehicles according to book value rather than stated purchase price makes would thus close the loophole of stating whatever paid value you want to in order to save some tax (c'mon, we've all done it where we paid $2200 for that nice 3-year-old Lexus )
'67 Mustang - out of commission after an accident
'00 Echo - DD
'11 Kia Rio - Wife's DD
'09 Harley Nightster - 48mpg and 1/4 miles in the 12's
I just went through this too here in Texas.
I buy cars for very cheap as I find the ones with problems I can fix.
I just bought 2 Mustangs (a 97 and a 96)for $900 total.
These were used car lot back of the yard specials.
Both reported blown head gaskets and possibly other engine related problems
but I was willing to take the risk as I am a good mechanic.
I got them both appraised and it came in about $1300 each.
I was prepared for taxes on $2600 but they were rejected because the lowest catagory they had listed them at $3100 and $2850!!
Was told the only other catagory was "unrepairable" and they would not transfer titles on unsafe cars.
I had my copy of the law and asked for a supervisor.....
I pressed for the $900 total first as I had all the car lot documents and the super accepted it.
I suspect that about 98% of the people pay and don't complain.