Have you bought your car in Delaware? Then, first, you must deal with the registration, titling, and plate fees. The other fee you mustn’t forget is the Delaware sales tax on cars. But how much is it?
Calculating car sales tax in the US can be complicated since every state has set different rules for it. But evading that cost won’t be good for you. Our article will be the perfect guide for in-depth knowledge of Delaware car sales tax. Keep reading!
Is there a sales tax for cars in Delaware?
No. Delaware is one of the states that doesn’t charge sales tax on cars. However, all car purchases in the state are subject to a 4.25% documentation fee. The fee gets fixed based on the buying price or the NADA book value, which is higher. Sussex County is the only area in the state with a local sales tax of 6%.
Is Delaware the only state without car sales tax?
No. The following states also don’t charge you a tax while buying a car.
- Iowa
- Alaska
- Maryland
- New Hampshire
- Montana
- New Mexico
- Oregon
- North Carolina
- South Dakota
Are cars more expensive in Delaware?
Buying a car in Delaware is not as difficult as in some other states. The overall cost will also be less expensive since there’s less sales tax. If buying a car in another state, consider registering and titling it in Delaware to save money.
Does trading in a car reduce sales tax in Delaware?
A trade-in will help you reduce the cost of your car’s documentation fee in the state. When calculating your documentation fee, the value of your trade-in gets deducted from the new car’s sticker price.
For instance, you’re buying a car worth $25,000 and trading your old car for $5,000. Then, the documentation fee will be 4.25% of your new car worth $20,000.
How are rebates and incentives taxed?
Many dealerships offer incentives and manufacturer rebates to accelerate a car’s sale. So, suppose the dealership offers any incentives or discounts. In that case, the dealers won’t deduct it from the car’s sticker price when calculating the document fee.
Don’t have valid auto insurance in Delaware? What are the penalties?
What other fees must you pay while buying a car in Delaware?
Zero Delaware sales tax on cars does not mean you are exempt from extra car buying fees. You must plan your budget to pay fees on documentation, registration, titling, and plate transfer. The following are the fees you must pay while buying a car in Delaware.
| Category | Fee |
| Title | $35-$55 |
| Registration | $40 |
| Plate transfer | $10 |
| Documentation | 4.25% of the buying price or NADA book value |
You must pay $40 to register your car in the state every year. If it’s a new car, the title charge will be between $35-$55. The documentation fee will be 4.25% of the car’s total price. Transferring your plates will cost $10 if you use the same plates as your prior vehicle. The dealer may charge you $10 for the temporary license plates during the initial 60 days of ownership.
Use the Delaware DMV’s online calculator to help you calculate the exact title and registration costs.
Can you buy a car in Delaware from out of state?
Yes. If you buy a from another state, you must complete the documentation, undergo an inspection, and pay the other associated fees. In Delaware, you must apply for the title within 30 days of the transaction. Any car applying for a title must undergo inspection.
Can I buy a car in Delaware if I live in NY?
You can register and title a car bought in your home state. Even if you buy your car from a Delaware dealer, you can still title and register it outside the state.
Can I buy a car in Delaware if I live in MD?
Non-residents can register a car in Delaware if they meet specific requirements. They must bring a copy of the car’s registration and auto insurance proof for a car registered in their residence state.
What is the most bought car sales tax in Delaware?
Based on reliability and quality, Nissan Altima is the most common car in the state.
How do I avoid paying sales tax on a car in Missouri?
To avoid Delaware sales tax on cars, you must register the car in Delaware. If you live in NJ and buy a car in Delaware, you must pay taxes on the purchase in your home state.
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