When buying a used car in Iowa, don’t get caught off guard by the state’s vehicle sales tax. Vehicle sales tax rates in Iowa are 5%.

Unlike many other states, Iowa doesn’t have local sales tax; 5% is the most car sales tax you’ll pay.

Keep reading to get the full scoop on Iowa sales tax liabilities for your used vehicle purchase.

When buying a vehicle in Iowa, you’ll pay 5% of the vehicle’s sales price, whether buying from a private seller or a car dealer. Iowa's sales tax law does not discriminate between the two.

Unless you qualify for a tax exemption (discussed below), you are required to pay tax on your vehicle purchase.

Motor vehicle sales tax is a percentage of a car's purchase price owed to the state of Iowa when you buy a car and register it with the Iowa Department of Transportation (DOT).

The Iowa Department of Transportation establishes what the car is worth on the open market (its fair market value, or FMV) by referring to Kelley Blue Book, NADA, or other reliable sources on used car prices.

If the DOT concludes that the car's FMV is significantly greater than its purchase price, they can opt to base tax on the Kelley Blue Book or NADA assessed value.

Please note that underreporting the purchase price of a vehicle in order to avoid paying sales tax is illegal.

If you paid sales tax on the purchase of a vehicle in another state, Iowa deducts that tax so that you are not taxed twice. There are four potential scenarios.

1. You paid exactly 5% sales tax in Wisconsin (which has the same tax rate); Iowa will give you a pass.
2. You paid no sales tax in another state, in which case you owe the full 5% Iowa sales tax rate. Let's say you bought a used car in Montana and didn’t pay any sales tax, given Montana’s 0% tax rate. You’ll pay Iowa’s full 5% use tax.
3. If you paid less than 5%, in which case you will have to pay the difference.
4. You paid more than 5% in the other state (for example, Minnesota levies a 6.5% tax on every used vehicle purchase). We wish we could tell you that Iowa will give you a refund, but no. At least they won’t charge you any more tax.

Here's how to pay the sales tax owed after buying a vehicle from a private seller in Iowa:

1. To transfer ownership of the vehicle, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Iowa bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
2. The original car title.
3. Proof of Iowa insurance.
4. Valid driver’s license or ID.
5. Calculate the amount of sales tax due (multiply the vehicle's purchase price by 5%).
6. Submit payment for all taxes and fees.
7. Get your vehicle registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary paperwork, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will get your new license plates by mail.

Motor vehicle taxes are something you can't avoid—they are a part of our lives. You are required by Iowa law to pay sales tax on private party used vehicle purchases unless you meet an exemption.

Vehicle sales taxes apply to everybody but the following:

A lot of people mistakenly believe that buying a car from an Iowa dealer saves money. The opposite is true: going to an Iowa dealer costs you more money, and it's a pain—unless spending 3 hours in an Iowa dealership is your idea of a good time.


By shopping for used vehicles from private sellers on PrivateAuto, you avoid doc fees and get lower prices.

If you're in the market for a used vehicle, you'll want to calculate the applicable sales tax. With the PrivateAuto used car sales tax calculator, estimating sales tax has never been easier. This free online car sales tax calculator calculates the amount of tax you must pay on a used car purchase based on your sales tax rate (5%) and the vehicle's price.

In addition to the state vehicle sales taxes, you owe other fees when buying a car and registering it in Iowa, such as a registration fee and a vehicle title transfer fee.

To register your vehicle at an Iowa county treasurer’s office, you must show proof of valid car insurance. The first time you register a passenger car, you will need to do the title transfer, which will cost you $25.

According to the Iowa treasurer's office, this is how you calculate the registration fees:

The formula is calculated as follows: $0.40 per hundred pounds of vehicle weight, plus

Example: Weight: 3,000 pounds, list price: $18,500

A numbered regular plate with an emblem costs $45. A personalized plate costs $60 in addition to the regular plate fee.

PrivateAuto is the only transactional marketplace where you can sell and buy vehicles conveniently.

Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.

Here’s how you can sell your car in Iowa with a few simple steps:

1. Gather the required paperwork for selling a car in Iowa
2. Register on PrivateAuto and get verified
3. List your car
4. Set your terms
5. Vet incoming offers
6. Choose a buyer
7. Schedule a meeting
8. E-sign documents
9. Get paid instantaneously with PrivateAuto Pay
10. Transfer the vehicle title