VAT
Value-added tax
The consumption tax built into European and UK car prices. Consumer prices there include it; US prices exclude their sales tax instead.
VAT is the consumption tax that European countries, the UK, and Norway levy on goods including new cars. The crucial fact for a car shopper is not the rate but the convention: consumer prices in these markets already contain it. EU rules require the total price shown to consumers to include all taxes, and UK guidance says the total price should include mandatory charges such as VAT. A German configurator price therefore includes VAT, but check whether delivery and registration costs are included.
Cross the Atlantic and the convention flips. In the US, the FTC lets dealers leave government-required charges such as taxes out of advertised prices, and MSRP is quoted before the sales tax that state and local governments add at purchase. So comparing a French price with a US MSRP overstates the French car by the tax wedge.
CarPairly therefore stamps every price with its tax treatment, "incl. VAT" or "excl. sales tax", and keeps that label attached through currency conversions. Rates change with legislation, so the site states them only with a dated source.
Differs by market
In the EU, the UK, Norway, and Australia, consumer prices include the consumption tax (VAT in Europe, GST in Australia), each at its own rate; the UK standard rate is 20% as of September 2026. The US adds sales tax at purchase instead.