Delaware Vehicle Sales Tax & Fees
Delaware is considered one of the best states to purchase a vehicle since it is one of five states that does not charge a sales tax.
However, you will have to pay registration and other state fees when you purchase a vehicle.
Here’s a look at the sales tax and fee information for vehicles in Deleware.
Table of Contents
- How Much Is the Car Sales Tax in Delaware?
- How to Calculate Delaware Sales Tax
- Do I Have to Pay Sales Tax on a Used Car?
- Which City Has the Highest Tax? Which City Has the Lowest Tax?
- Car Sales Tax for Trade-Ins in Delaware
- Car Sales Tax for Private Sales in Delaware
- Other Taxes & Fees for Delaware
- When Sales Tax is Exempt in Delaware
- Delaware EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Delaware?
If you purchase a vehicle in Deleware, you do not have to pay a state sales tax.
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.
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.
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.
Which City Has the Highest Tax? Which City Has the Lowest Tax?
Delaware does not charge a city tax. Therefore, there are no cities that have higher or lower tax rates.
Car Sales Tax for Trade-Ins in Delaware
If you are trading in your vehicle, you do not have to pay a car sales tax. For example, if you receive a $10,000 trade-in for your vehicle, you will not have to pay any taxes on that 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
- 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.
When Sales Tax is Exempt in Delaware
Since there is no sales tax when purchasing a vehicle in Delaware, there is no need for an exemption.
Delaware EV Rebates & Incentives
Deleware offers rebates and incentives for EV vehicles through its Deleware 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.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
Frequently Asked Questions
What is the sales tax on cars purchased in Delaware?
There is no sales tax on any cars purchased in Delaware.
Do I have to pay sales tax on a used car in Delaware?
Since there is no sales tax in Delaware, you do not have to pay taxes on any used car purchases.
Do I have to pay sales tax on a gifted car in Delaware?
Since there is no sales tax in Delaware, you do not have to pay sales tax on any gifted cars.
How much is registration in Delaware?
The cost of registering a vehicle in Deleware is $40 per vehicle, per year.
What dealership fees will I have to pay?
You will likely have to pay the title fee and the documentation fee since both of these are associated with required paperwork that the dealership has to fulfill with the Delaware DMV.
Which dealership fees can I negotiate?
You should be able to negotiate away the advertising fee since that is pretty much arbitrary. Also, you should be able to negotiate down the destination fee.