Car Sales Tax in Delaware

Delaware does not charge sales tax on vehicle purchases, but buyers will need to pay documentation fees of 4.25%.
Written by Amber Reed
Reviewed by Jessica Barrett
background
There is no state sales tax in Delaware—but before you cross state lines to save money on buying a car, note that the car must be registered in Delaware to skip the sales tax. 
  • Delaware does not charge sales tax on car purchases, but it requires a documentation fee of 4.25% based on a vehicle’s NADA book value.
  • Buyers must register their new vehicle in Delaware to avoid paying sales tax.

Delaware car sales tax rate

Delaware is one of a few states that has no state sales tax. Other states with no car sales tax include:
  • Alaska
  • Iowa
  • Maryland
  • Montana
  • New Hampshire
  • New Mexico
  • North Carolina
  • Oregon
  • South Dakota
Of the three counties in Delaware, the only one that has a local sales tax is Sussex County, at a rate of 6%. 
Delaware does charge a documentation fee of 4.25 % on all motor vehicle sales. This is based on the purchase price or the
NADA book value
—whichever is greater. 

Delaware car trade-in taxes 

If you have a trade-in, the value of it is deducted from the purchase price of the new car when it comes to determining your documentation fee. 
For example:
  • You’re buying a new
    BMW 230i
    in Wilmington for $37,000 and trading in your old
    Dodge Charger SE
    for $7,000
  • You will only pay the 4.25% documentation fee on $30,000 of your new car’s value 
Keep in mind: 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. 

How to calculate sales tax on a car in Delaware

There’s no sales tax or use tax to calculate, so you don’t need to sweat this aspect of your new car purchase. 

Exemptions from Delaware car sales tax

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 new or used car
Here’s how the extra cost of 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.
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