Car Sales Tax in Delaware
Delaware is one of a few states that does not charge any sales tax, car purchases included.
Written by Amber Reed
Reviewed by Jessica Barrett
There is no state sales tax in Delaware—but before you cross state lines to save money on buying a car, be well aware: the car must be registered in Delaware in order to skip the sales tax.
When you’re shopping for cars, you’re typically focused on the sticker price more than any other number. However, it’s important to remember that there will be additional costs as well, such as dealership and title and registration fees.
Delaware doesn’t have a state sales tax, so that’s at least one number you won’t have to worry about. In this article,
car insurance
super app Jerry
is talking taxes (and other costs) around purchasing a car in Delaware. We'll also show you how to lower your Delaware car insurance costs
for that new ride. How much is the car sales tax rate in Delaware?
Delaware is one of a few states that has no state sales tax. Of the three counties in Delaware, the only one that has a county tax is Sussex County, at a rate of 6%.
However, Delaware does charge a documentation fee of 4.25 % on all automobile sales. This is based on the purchase price or the
NADA book value
, whichever is greater. MORE: Delaware gas tax
How are car trade-ins taxed in Delaware?
If you have a trade-in, the value of it is deducted from the purchase price of the car when it comes to determining your documentation fee.
For example, let’s say you’re buying a new
BMW 230i
in Wilmington for $37,000, and you’re trading in your old Dodge Charger SE
for $7,000. This means that you will only pay the 4.25% disposition fee on $30,000 of your new car’s value. Be aware that if the dealership is offering any incentives or rebates, those generally aren’t deducted from the price of the car when it comes to determining your document fee.
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How to calculate sales tax on a car in Delaware
There’s no sales tax to calculate, so you don’t need to sweat this aspect of your new car purchase.
Key Takeaway Delaware is one of a handful of states that does not have any sales tax. However, there is a document fee of 4.25% when purchasing a car.
Exemptions from Delaware car sales tax
If you live in Delaware, you’re already exempt as there is no car sales tax. Awesome! That being said, the car must be
registered in Delaware
to avoid any sales taxes. If you live in New Jersey and buy a car in Delaware, you’ll have to pay taxes on the purchase back home in the Garden State. How to estimate Delaware tax, title, and registration fees
Just because there is no sales tax in Delaware doesn’t mean you’ll get off scot-free when it comes to additional car purchase costs. Document fees, title and registration fees, and plate transfer fees all contribute to the final price of buying a car.
Here’s how the extra cost for buying a car in Delaware breaks down:
Cost | Average cost |
|---|---|
Sales tax | 0% |
Registration fee | $40 |
Title fee | $35-$55 |
Plate transfer fee | $10 |
Document fee | 4.75% of purchase price or NADA book value |
The Delaware DMV has a handy
online calculator
to help figure out what your exact costs for title and registration will be.MORE: Is car insurance tax deductible?
How to find affordable car insurance in Delaware
Now that all your other costs have been figured out, there’s one thing left to do: make sure that you have car insurance that meets Delaware’s
minimum legal requirements
. Car insurance in Delaware is higher than the national average, but that doesn’t mean you can’t still get a great deal. That’s where Jerry
comes in!Using Jerry is fast and easy and can be done entirely on your phone. Just download our
trusted insurance comparison app
, enter a bit of information, and within minutes Jerry will bring you competitive quotes selected from over 50 top insurers. You can get help from beginning to end if you have any questions, and Jerry can even assist you in canceling your old policy. “Jerryhelped me so much, and all I did was press a few buttons. They helped me go from paying $395 with my old insurer to $231 a month with Progressive!” —Jada E.
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FAQ
How much is sales tax on a used car in Delaware?
There is no sales tax in Delaware, and this applies to used cars as well. Your document fee will be 4.75% of the purchase price or the NADA book value, whichever is greater.
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