The High Cost of Car Registration in California

In California, most residents rely on their vehicles for daily commutes. Owning a car comes with substantial ongoing costs. This article focuses on the cost of vehicle registration. It should come as no surprise that California is one of the most expensive states in the USA for registering your vehicle. Perhaps what will surprise you is that California is not the most expensive in the country. As of February 2026, these expenses are driven by annual registration fees and taxes. For comparison purposes I examined registration costs across the country using 2 example vehicles 1) a 2024 Toyota Camry (base MSRP $26,420) and 2) a 2024 Ford F-150 (base MSRP $36,570), drawing from official DMV data and state revenue sources.

The 2024 Toyota Camry, a reliable midsize sedan known for its efficiency and around 3,300-pound curb weight, remains a top choice for urban drivers. Similarly, the 2024 Ford F-150, is America's bestselling truck with a base curb weight of about 4,700 pounds, offers versatility for work and leisure.

Understanding the Costs

Vehicle ownership taxes and fees fund infrastructure, safety, and environmental programs, varying by state. In California, key elements include a $76 base registration fee, 0.65% Vehicle License Fee (VLF) on value (depreciating over time), $34 CHP fee, tiered Transportation Improvement Fee (TIF), and county add-ons (averaging $17–$23). For the Camry, first-year costs total ~$431; for the F-150, ~$569. Other states use flat fees or value-based taxes, with hybrids/EVs often facing surcharges ($50–$200) to replace gas tax revenue. These are first-year estimates; costs decline with depreciation.

Visualizing Comparative Costs Across States

To make the data more visually interesting, we've represented the annual costs as bar charts.

Bar Chart for 2024 Toyota Camry Annual Costs

Bar Chart for 2024 Ford F-150 Annual Costs

These bar charts vividly illustrate the cost drop-off from high-tax states like Colorado and California to low-flat-fee ones like Georgia, making the disparities more striking and engaging than a simple line trend.

Out-of-State Registration Schemes: A Risky Alternative

The costs have become so high in many states that some residents turn to vehicle registration programs in lower-cost states. To illustrate how these work, let's assume our vehicle owner lives in Northern California and decides to register the vehicle in neighboring Oregon, where the tax rate is roughly one-fifth that of California. These schemes often involve forming an LLC in the low-tax state.

Basics of How They Work: Form an LLC in the target state (e.g., Montana for $500–$1,500 via a registered agent), title the vehicle to the LLC, and register it there (fees $100–$300, with no sales tax in some states). Receive plates and use them in California, claiming business ownership. Similar options exist in Wyoming (privacy-focused, 4–6% tax) or North Dakota (5% excise tax, less common).

Risks and Pitfalls: These schemes are often illegal if the vehicle is garaged or primarily used in California, as they constitute tax evasion. Penalties can include back taxes, interest, fines (up to 150% of owed amounts), vehicle impoundment, and criminal charges (misdemeanor or felony).

Enforcement has become aggressive—California's DMV and CDTFA investigate through audits, traffic stops, data-sharing, and license plate readers; vehicles must be registered within 20 days of establishing in-state residency or primary use. Insurance issues also arise: policies may be voided if the garaging location is misrepresented, leading to claim denials or cancellations. Additional hurdles include financing restrictions, IRS scrutiny for sham LLCs, and resale complications. States like Utah and Missouri have cracked down, with arrests in recent cases. These arrangements are legitimate only with a genuine business presence in the registration state.

Conclusion

California's car ownership costs are among the highest in the nation—thankfully, not the highest—yet. While out-of-state licensing schemes may be tempting, especially for high-ticket vehicles such as large motorhome RVs (where annual registration fees can exceed $1,500/year), they typically violate California law if you will be storing or using the vehicle in California for more than 20 days.