Delaware Vehicle Sales Tax & Fees
One of the best states to purchase a vehicle is Delaware because it does not charge a sales tax on vehicle purchases.
Of course, this only applies to cars that are also registered in Delaware, so you won’t save money just buying a car there to bring home to another state.
Additionally, you will have to pay registration and other state fees that add up to around 4.25%.
Here’s a look at the sales tax and fee information for vehicles in Delaware.
Key Takeaways
- Delaware does not charge vehicle sales tax
- You must register the car in Delaware to enjoy the 0% sales tax
- Car buyers in Delaware must pay documentation fees of around 4.25%
How Much Is the Car Sales Tax in Delaware?
If you purchase a vehicle in Delaware, you do not have to pay a state sales tax. Note that the car must be registered in Deleware to skip the sales tax.
However, buyers will need to pay a 4.25% documentation fee.
Here is an example to illustrate this point:
Let’s say that you purchase a new SUV in Delaware for $50,000. Your sales tax on that vehicle would be $0 if you register the SUV in Delaware.
How to Calculate Delaware Sales Tax
Since there is no sales tax if you purchase the vehicle in Delaware, there is no tax to calculate.
As an example, if you purchase a new sedan in Delaware for $45,000, then the sales tax for that vehicle will be $0.
Other States with No Sales Tax On Cars
Finding a state with no car sales tax feels like a gold mine, but keep in mind you must pay sales tax where you register the vehicle. Fortunately, Delaware is not the only state without vehicle sales tax.
The other states that do not tax car sales include:
- Alaska
- Iowa
- Maryland
- Montana
- New Hampshire
- New Mexico
- North Carolina
- Oregon
- South Dakota
Do I Have to Pay Sales Tax on a Used Car?
In Delaware, both new and used vehicles do not have sale tax. For example, if you purchase a used SUV for $20,000 in Delaware, the state sales tax will be $0.
Local Car Sales Tax in Delaware
Only one county charges local sales tax in Delaware. Sussex County charges 6% vehicle sales tax.
Calculating Documentation Fee for Trade-Ins in Delaware
Deduct the value of the trade-in before calculating the documentation fee.
For example, imagine you’re buying a new car for $40,000 and trading in your old car for $10,000.
You will pay the 4.25% documentation fee on the $30,000 value of the car.
$40,000 new car value- $10,000 trade in value= $30,000 new car price after trade-in
Car Sales Tax for Private Sales in Delaware
Since there is no state sales tax in Delaware, you do not have to pay a sales tax if you purchase a vehicle via a private sale. For example, if you purchase a $20,000 sedan in a private sale, the sales tax will be $0.
Other Taxes & Fees for Delaware
While Delaware does not charge a state sales tax, there are fees associated with registering a vehicle in the state. Also, you may have to pay dealership fees.
Here’s a look at the state registration fees that you may have to pay at the Delaware DMW as well as common dealership fees:
Delaware DMV & Registration Fees
- Registration Fee: $40 per vehicle per year
- Plate Transfer Fee: $10
- Late Renewal: $20
- Temporary Tag: $20
Delaware Dealership Fees
- Dealer Prep Fee: $600 to $700
- Destination Fee: $900 to $1,700
- Document Fee: 4.25% of purchase price or NADA book value (whichever is greater). The average cost is $241.
- Advertising Fee: Average $250
- Title Fee: $55
Bear in mind that you can avoid paying some of these dealership fees. For instance, you can probably get away with negotiating away the advertising fee. You can also try to negotiate down the dealership prep fee.
However, when it comes to the document and the title fee, you may have to pay the full amount. That is because the title fee is required by the state’s DMV and the document fee is covering paperwork required by the state.
Delaware Car Sales Tax Exemption
Since there is no sales tax when purchasing a vehicle in Delaware, there is no need for an exemption.
However, to qualify for the 0% sales tax, you must register the ar in Delaware.
So, if you buy a car in Delaware but live in Florida, you will have to pay taxes back home.
Delaware EV Rebates & Incentives
Delaware offers rebates and incentives for EV vehicles through its Delaware Clean Vehicle Rebate Program (DNREC). Here are the following rebates available by vehicle type:
- New Battery Electric Vehicles (including vehicles with gasoline range extenders): $2,500
- New Plug-in Hybrid Electric Vehicles: $1,000
To be eligible for the rebate, the new vehicle price can not exceed $60,000. The following costs are not included in the total vehicle price: Taxes, tags, rebates, incentives, and trade-ins.
Note that you are not able to get any of these incentives if you purchase a used EV vehicle. Therefore, if you want to take advantage of EV rebates and incentives in Delaware, you will want to shop for new EV models from a dealership.
Delaware Car Sales Tax: Final Verdict
Delaware is one of the few states without vehicle sales tax. As long as you register your vehicle in Delaware, you won’t need to pay sales tax. However, you must pay a 4.25% documentation fee (calculated after the trade-in value is applied).
Looking for the car sales tax in another state? Check out our comprehensive guide on car sales tax in each state!
Tax information and rates are subject to change, please be sure to verify with your local DMV.
