Colorado Car Sales Tax
The car sales tax rate in Colorado is 2.9%, but the average state, county, and local combined sales tax on car purchases is 6.978%. More on exceptions here.
Written by Melanie Johnson
Reviewed by Jessica Barrett
A state tax rate of 2.9% applies to all car sales in Colorado, but your total tax rate will include county and local taxes, as well—which may add up to 8%. The average total car sales tax in Colorado is 6.978%.
When you buy a car, there’s more to consider than just the big-ticket price. One of the biggest additional costs to keep in mind is sales tax—which will vary by the state, county, and city you purchase your car in.
Colorado has a low car state sales tax of 2.9%, but local governments are allowed to collect up to 8% of additional taxes. Understanding the sales tax in your area is important. That’s why
car insurance
comparison expert Jerry
has made this useful guide to Colorado’s car sales tax. We'll also show you how to lower your Colorado car insurance costs
using our trusted comparison app. Here’s what you should know.
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How much is the car sales tax rate in Colorado?
The car sales tax rate in Colorado is 2.9%. This tax applies to most purchased vehicles—but there are some exceptions, which we’ll dig into below.
You’ll also need to factor in county and local sales tax. Combine these taxes with the state’s base 2.9% tax to calculate the total tax to be paid on your purchase.
The highest sales tax for car purchases in Colorado is in Grand County, where car buyers are expected to pay a whopping 11.2% total sales tax. The average across the state is 6.978%. The Colorado counties with the lowest sales tax rate are Kiowa, Cheyenne, and Kit Carson—all with a combined sales tax of 4.9%.
How are car trade-ins taxed in Colorado?
When you buy a new car, most dealerships will allow you to
trade in your old car
for a credit toward your new one. In Colorado, car sales tax doesn’t apply to the trade-in value, which will save you money.To break that down: let’s say you’re buying a
Toyota Prius
worth $24,525 in Denver
, and you’re trading in your old Toyota Avalon
for a $3,500 credit. You’ll only have to pay Denver’s 8.81% combined state and local sales tax on $21,025 of your purchase. Unlike trade-in value, dealer rebates and incentives are not exempt from sales tax. The taxable price of your vehicle is the price before incentives—so even if you’re getting a rebate on your car, you’ll still have to pay sales tax on the price before the discount was applied.
How to calculate sales tax on a car in Colorado
If you live in Larimer County, you can estimate your area’s total car sales tax by visiting the county website and using the
sales tax calculator
. Keep in mind that this estimate may not include title, registration, or processing fees.If you live in another county in Colorado, you can visit the Colorado
Department of Motor Vehicles
website or check out the Colorado Sales Tax Handbook
for information on local sales tax rates.Key Takeaway The total sales tax in your area can be calculated by combining Colorado’s sales tax rate of 2.9% with your county and/or city’s tax rate.
Exemptions from Colorado car sales tax
There are a couple of exceptions to Colorado’s car sales tax policy. Vehicles exempt from Colorado’s car sales tax include:
- A used vehicle that has a title previously issued in Colorado and a value less than $20,000
- Vehicles delivered to a nonresident of Colorado to be licensed outside the state
- Low emission vehicles greater than 10,000 pounds
A full breakdown of Colorado’s
Sales and Use Tax Exemption for Low-Emitting Heavy Vehicles
is available on the Colorado Department of Revenue’s website.How to estimate Colorado tax, title, and registration fees
There are additional costs to consider when purchasing a car in Colorado. On top of sales tax fees, there are title and registration fees, a documentation fee charged by most dealerships, as well as the cost to transfer your license plates.
Below are the average additional costs in Colorado:
Cost | Average cost |
|---|---|
Sales tax | 6.978% |
Registration fee | $6 to $15 |
Title fee | $75 to $90 |
Plate transfer | $4 to $68 |
Documentation fee | $490 |
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Costs will vary based on your specific situation. You can visit the Colorado General Assembly’s website for more information on
registration fees
, as well as the Department of Revenue’s website for more information on license plate fees
. MORE: Is car insurance tax deductible?
How to find affordable car insurance in Colorado
After you pay all the applicable fees but before you take that sweet new ride for a spin, there’s just one more major cost to consider:
Colorado car insurance
. Use the Jerry
app to find great insurance that won’t break the bank.As a licensed broker and
trusted insurance comparison tool
, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy. The best part? Jerry users save an average of $887 per year on car insurance!“After I bought my new car, the insurance companies tried charging me $315/month.Jerry, on the other hand, found me full coverage for only $220/month. Thank you!” —Mari E.
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FAQ
How much is sales tax on a used car in Colorado?
If you buy a used car in Colorado that has been previously titled and is worth less than $20,000, your vehicle is exempt from Colorado’s car sales tax.
If both of these stipulations are not met, the total tax on your vehicle will include the statewide base rate of 2.9% and your local or county tax rate.
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