Car Sales Tax in Indiana
In Indiana, the average combined state and county sales tax on car purchases is 7%.
Written by Tiffany Leung
Reviewed by Jessica Barrett
All car sales in Indiana are subject to a state sales tax rate of 7%, which applies to the entire state.
Staying within budget can be difficult when you buy a new car. There are additional costs that can exceed your budget if they are overlooked. In particular, you should pay attention to the sales tax, which can vary depending on where the car is purchased.
The Indiana car sales tax rate ranks quite high across the country but fortunately doesn't fluctuate across the state. Figuring out the rate is easy since there is only one rate for your area or county. The
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How much is the car sales tax rate in Indiana?
The statewide sales tax in Indiana is 7% and is applied to any car purchase, regardless of whether it’s new or used. The sales tax rate is the same in all 281 local tax jurisdictions across the state of Indiana.
While it is rare for all counties to have the same sales tax, this makes budgeting for your new car much simpler—you won’t have to find out the specific sales tax rate where you are!
How are car trade-ins taxed in Indiana?
Many dealers have promotions for
trading in an old vehicle
so that you get credit towards purchasing a new car with them. In Indiana, the car sales tax only applies to the final ticket cost of your car, so the value of your trade-in won’t be subject to taxes. For example, you’re buying a
Honda Accord Sport
worth $28,000 in Indianapolis
, and you’re trading in your old Hyundai Veloster
for a $3,500 credit. You’ll only have to pay Marion County’s 7% combined state and local sales tax on $24,500 of the purchase. However, if you receive dealer rebates and incentives, they are not exempt from sales tax. In other words, the sales tax will still be applied to the full price of the vehicle before dealer incentives.
How to calculate sales tax on a car in Indiana
Calculating the sales tax on a car in Indiana is simple since there is only one 7% tax across the entire state.
Key Takeaway There is a 7% sales tax across the entire state of Indiana so you won’t have to worry about additional taxes in your county or local area.
MORE: Car inspection in Indiana
Exemptions from Indiana car sales tax
Although all Indiana car purchases are subject to sales tax, they are exempted if one of the following applies to you:
- You are a tax-exempt organization
- You are an out-of-state resident and the vehicle was purchased out of state
- The vehicle is a truck directly used in the direct production of manufacturing, mining, refining, or harvesting of agricultural commodities
- The vehicle is a ready-mix concrete truck that qualifies under the manufacturing machinery and equipment exemption
For more details on available sales tax exemptions, refer to the additional information on the
ST-108E Form
provided by the Indiana Department of Revenue.How to estimate Indiana tax, title, and registration fees
Aside from the sales tax, there are other factors that affect your total cost. This includes the title and registration fees, the cost to transfer your license plates, and the documentation fee charged by most dealerships. Some states also have supplemental fees for electric and hybrid cars.
Here’s a breakdown of all the additional costs associated with car purchases in Indiana:
Cost | Average cost |
|---|---|
Sales tax | 7% |
Registration fee | $21.35 + $15 infrastructure fee |
Title fee | $4 - $25 |
Plate transfer | $9.50 |
Documentation fee | $199 max |
Electric vehicle supplemental fee | $150 |
Hybrid vehicle supplemental fee | $50 |
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MORE: Is car insurance tax deductible?
How to find affordable car insurance in Indiana
Aside from the taxes and fees, the final cost factor is the
car insurance
for your new car! Indiana has high insurance rates but the Jerry
app can help you find the lowest prices. If you’re looking for a new insurance company, Jerry can find you competitive quotes from over 50 top providers in under a minute. Swapping is just as effortless. Jerry takes care of all the paperwork and phone calls and can even assist you in canceling your old policy!
You won’t have to stress about the extra work when Jerry can find you better policies with average savings of $800+ per year.
“UsingJerryis a super straightforward process, and at each step, you can see exactly what coverage you’re paying for. Thanks to Jerry, I’m paying $900 less each year while keeping full coverage for my new car!” —Martin H.
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* checking your rate won’t affect your credit score
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FAQ
How much is sales tax on a used car in Indiana?
The sales tax for used and new cars in Indiana is the same—it’s the statewide tax rate of 7%.
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