Delaware does not have a general sales tax, but it charges a 5.25% document fee on most vehicle purchases and transfers, which functions as the state’s sales tax on cars, trucks, motorcycles, and trailers.1State of Delaware News. DMV Fees Increase in October 2025 The rate rose from 4.25% to 5.25% in October 2025, so older guides may still quote the lower figure. Revenue from the fee goes entirely to Delaware’s Transportation Trust Fund for roads and highways rather than the general budget.2Justia. Delaware Code Title 30 Chapter 30 – Section 3002
How the 5.25% Document Fee Is Calculated
The fee applies to every new or used motor vehicle, truck, trailer, and motorcycle titled in Delaware. It is 5.25% of the purchase price or the NADA average trade-in value, whichever is greater.3Division of Motor Vehicles. Fees Two small floors exist for cheap vehicles: an $8 minimum for anything under $400, and a flat $13.75 for vehicles priced between $400 and $500. For virtually every real-world purchase, though, you’re paying the 5.25%.
Trade-in allowances reduce the taxable amount. Manufacturer rebates and incentives generally do not, because the statute defines the deductible amount as a trade-in or allowance “given by the seller.”4Delaware Code Online. Title 30 Chapter 30 Motor Vehicle Document Fee Buy a $35,000 car with a $5,000 trade-in and the fee is calculated on $30,000. A $2,000 manufacturer cash-back offer on that same deal likely won’t reduce what you owe.
Used Cars and Private Sales
The 5.25% rate is the same for a used car, but the “greater of price or NADA value” rule is where buyers get caught. If you buy a car with a NADA value of $12,000 but pay only $8,000, the fee is based on $12,000.3Division of Motor Vehicles. Fees Writing a low number on a private bill of sale won’t change that; the DMV cross-checks against NADA.
There is a legitimate workaround when the book value overstates the car. An appraisal from a Delaware-licensed vehicle dealer, showing the car is genuinely worth less because of mileage or mechanical condition, may be accepted by the DMV in place of the NADA figure.5Delaware Regulations. 2 DE Admin Code 2266 Vehicle Document Fees For an older or damaged car, this is worth the trouble. The same rule holds if a car is “gifted” but doesn’t qualify for the family exemption below: the fee is calculated on NADA value.
Leased Vehicles
On a lease, the 5.25% applies to the total of all lease payments rather than the full vehicle value.6Cornell Law School. 2 Del Admin Code 2266-9.0 Extending or modifying the lease can trigger additional fees on the added payments. If you exercise a buyout at lease end, a new document fee is charged on the residual purchase price, so build that into any decision to purchase the vehicle.
Mobile Homes
Mobile homes are taxed at a lower rate: 3.75% of the purchase price instead of 5.25%.3Division of Motor Vehicles. Fees
Transfers That Are Exempt
Certain transfers pay no document fee, mostly cases where ownership changes without a real sale.
Family Gifts
Immediate family members can transfer a vehicle as a gift with no fee. The exemption covers spouses, parents, children, siblings, and grandparents, including step-relatives and in-laws, and applies only to Delaware-titled vehicles.7Cornell Law School. 2 Del Admin Code 2266-2.0 – Exceptions The recipient files a notarized Affidavit of Motor Vehicle Gift Transfer (Form MV386) confirming no money changed hands. One catch: if the recipient assumes an outstanding loan on the vehicle, the DMV may treat the transaction as a taxable purchase.
Inherited Vehicles
Vehicles passed by will or intestate succession are also exempt.7Cornell Law School. 2 Del Admin Code 2266-2.0 – Exceptions The heir provides a certified death certificate and typically an Affidavit of Inheritance; if the estate is in probate, Letters Testamentary or Letters of Administration may also be required. Buying a car from an estate is not the same as inheriting one, and the standard fee applies to a purchase.
Government Vehicles
Federal, state, and local government agencies pay no fee on vehicles acquired for official use, with a purchase order on official letterhead or a tax-exempt certificate. If a government-owned vehicle is later sold to a private buyer, that buyer pays the standard fee.
Buying a Car in Another State
If you buy out of state and title the vehicle in Delaware, the 5.25% fee still applies to the purchase price or NADA value, whichever is higher. For a vehicle previously registered elsewhere and titled in Delaware for the first time, the fee is based on fair market value as of the date of titling.4Delaware Code Online. Title 30 Chapter 30 Motor Vehicle Document Fee
Delaware credits sales tax, transfer tax, or a similar levy paid to another state, but only if the vehicle was titled or registered in that other state within 90 days before Delaware registration.3Division of Motor Vehicles. Fees The 90-day rule is strictly enforced. Pay another state’s tax more than 90 days before registering in Delaware and no credit is available. Bring proof of the tax paid, such as a dealer invoice or tax receipt. If the other state’s rate was lower than 5.25%, you pay the difference.
Refund When You Sell and Replace a Vehicle
Delaware offers a partial refund that many people miss. Sell a Delaware-titled vehicle within 60 days before or after buying a replacement and you may qualify for a document fee refund on the sold vehicle, claimed on Form MV347. This is separate from the trade-in reduction at the time of purchase; it exists for people who sold the old car privately instead of trading it in at a dealer.
When You Have to Pay
The document fee is paid to the DMV at the time of titling and registration. Dealerships handle the submission for you. Private buyers file themselves.
You must apply for a new title within 30 days of purchase.8Division of Motor Vehicles. Vehicle Services Titling Miss the window and a penalty is assessed automatically, growing the longer you wait. Underreporting a purchase price to shrink the fee is the more serious issue. The DMV compares reported prices to NADA values, and at minimum you’ll owe the correct amount. Forged documents or repeated misrepresentation can bring fines, administrative action, or a referral to the Attorney General’s office.
One item to keep separate on your paperwork: the dealer’s own processing fee, sometimes also called a “doc fee,” is capped by statute at $475 and covers the dealer’s administrative work.9Delaware General Assembly. Bill Detail – Dealer Processing Fees It is not the state document fee and is not paid to the DMV.
Deducting the Fee on Your Federal Return
If you itemize, you can elect on Schedule A to deduct state and local general sales taxes instead of state and local income taxes.10Internal Revenue Service. Instructions for Schedule A (Form 1040) Delaware’s document fee functions as a sales tax on vehicle purchases and may qualify. If the rate on the vehicle exceeds your state’s general sales tax rate, you can only deduct the amount you would have paid at the general rate.
The overall state and local tax deduction is capped at $40,000 for most filers in 2025, with potential small annual increases after that. Because Delaware has no state income tax, electing to deduct sales taxes, including the document fee on a vehicle purchase, can be more useful here than in most states. A tax professional can confirm whether itemizing beats the standard deduction in your situation.