How Much are Used Car Sales Taxes in Delaware?

At first glance, Delaware appears to be a tax haven for used car buyers—the state does not have a general sales tax, leading many to believe that private party vehicle purchases are tax-free. But there's a catch.
While Delaware does not charge sales tax, the state charges a 4.25% "motor vehicle document fee" on most used vehicle purchases, including private party sales.

Do You Pay Taxes When You Buy a Car From a Private Seller in Delaware?

When you buy a car in Delaware, whether from a private party or a car dealer, you do not have to pay sales tax. Whereas other states rely on sales tax to fund infrastructure and programs, Delaware uses personal income tax and property tax to do so. As a result, Delaware residents pay some of the country's highest income and property taxes.

So while Delaware can technically boast of having "no sales tax," the DMV's mandatory document fee ensures vehicle purchasers pay a sales tax by another name.

Car Title, Registration and License Plates Fees in Delaware

In addition to the car's purchase price, you have to factor in the title transfer, registration, and new license plate fees for your used car.
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Delaware Title Transfer Fees

In the state of Delaware, titling and registration are done at the same time. When purchasing a used car, you will need to provide your local Delaware DMV office with the following:

Vehicle title certificate
Fill out the certificate of title application (Form MV-212)
Proof of valid Delaware insurance
Odometer disclosure statement
Emissions certificate
Title fee: $35

See our guide to transferring a Delaware vehicle title for more information on the process.

Delaware Vehicle Registration

Registration in Delaware costs $40. To apply for a Delaware license plate, you must have a valid Delaware car registration card from the Delaware Division of Motor Vehicles. To register your vehicle, you will first need to transfer the title.

You will need to submit the following documents to your local DMV office:

Proof of valid Delaware car insurance policy
A valid Delaware driver’s license or two documents that prove your identity (identification card and passport)
The vehicle’s signed-over title
Payment for the registration fee: $40

Delaware License Plates Fee

The fee for passenger vehicle registration is $40 per year, which includes the cost of your standard license plate. A Delaware vanity plate is $40 in addition to the $40 registration fee, and you can only apply online through the Delaware DMV website.
In Delaware, vehicles are required to have only a rear license plate. Every state in the US requires a rear license plate. While some states require a rear plate only, other states require a front license plate in addition to the rear plate.

Delaware vs Other States

Consider yourself fortunate if you are purchasing a vehicle in Delaware: the state does not levy sales tax on used or new vehicle purchases. Be glad you don’t live in Kansas, where the sales tax rate on a car purchase is 7.5% (plus local taxes that vary depending on the county or city). California has the second-highest car sales tax after Kansas, with an average sales tax rate of 7.2%.

If you take a look at the states bordering Delaware, you’ll see that the sales tax on cars in Maryland is 6%, same as Pennsylvania. These states also impose local (city, county, or both) taxes, resulting in an even higher total sales tax on a motor vehicle.

If you want to buy an out-of-state vehicle but aren't sure how much tax you’ll pay, here’s our used car sales tax calculator to help you figure it out.

Motor Vehicle Documentation Fee Exemptions

While the mandatory documentation fee paid to the DMV functions as a stealth sales tax for many buyers, some exemptions do apply:

Transfers between existing joint owners with no money exchanging hands are exempt.
Name changes due to marriage, adoption, etc. are also exempt.

Aside from these exceptions, the document fee is applicable to all private party car transactions. Buyers pay the fee directly to the state upon registration, just like a sales tax.

Is Buying from a Car Dealer Better?

Many people believe that purchasing a car from a dealership is a great way to avoid hassle and save money. In fact, going to a dealer ends up costing you more money.

When you buy a car from a Delaware dealership, you pay all the same fees that you’d pay if you bought it from a private seller. Car dealerships have a way of rolling it all up in the fine print, but the charges are still there.

Additionally, dealerships charge a "documentation fee" in addition to all other taxes and fees. The state document fee is 4.25% of the purchase price or NADA book value, whichever is greater.

Perhaps more significantly, nine times out of ten, you’ll pay more for a used vehicle when you buy it from a dealer compared to buying the same vehicle from a private seller. Dealers are notorious for buying low and selling high to make a profit. Cut out the middleman and get the best price possible by transacting peer-to-peer on PrivateAuto.

Dealers bring convenience that private sellers typically don’t, but that is where PrivateAuto comes in. Our platform offers the same dealer-like experience while allowing you to buy or sell from regular people without paying hefty fees—unlike our competitors. Get lower prices when you shop used cars from private sellers right here on PrivateAuto.

Sell and Buy Used Vehicles on PrivateAuto

PrivateAuto makes private car transactions simple and secure. Our transactional marketplace gives buyers and sellers all the tools to complete the deal, from in-app financing to secure messaging to integrated payments.

We allow you to negotiate the best price, schedule test drive meetups, and pay for the car all from the comfort of your own home, all without disclosing any personal information.

If you're looking to buy a car, browse our selection of used cars for sale.

Get started with PrivateAuto today.

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

1. Gather necessary paperwork
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, instantly
10. Transfer the title

Delaware Sales Tax FAQ

What is a NADA book value?

The NADA book value is an important factor in determining the worth of a vehicle in the automotive industry. The National Automobile Dealers Association (NADA) provides comprehensive market data and analysis to establish accurate vehicle valuations. The NADA book value considers several factors, including make, model, year, condition, mileage, and regional market conditions. In Delaware, the NADA book value is now used as a benchmark for buyers, sellers, and lenders to determine fair prices and make informed decisions. It contributes to market transparency and consistency by providing a reliable reference point for determining the value of vehicles in the state.

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