Last checked Nov 10, 2026
Buying a car in Michigan
The tax you will pay, whether your trade-in lowers it, what the dealer may charge for paperwork, and where to title and register. Taken from official Michigan sources.
- State tax on vehicles
- 6%
- Trade-in lowers tax
- Partly
- Doc fee limit
- $280
- Deadline to title or register
- 15 days
details below
Sales tax on a car in Michigan
Michigan charges a state sales tax of 6% on vehicle purchases.
Michigan does not allow cities or other local units to impose a sales tax.
The trade-in reduction applies only when the seller is a licensed dealer and the trade-in value is stated separately on the sale documents.
Does a trade-in lower the tax?
On a purchase from a licensed dealer in 2026, the taxable price is reduced by the agreed value of a traded-in motor vehicle, up to $12,000. The limit rises to $13,000 in 2027 and $14,000 in 2028, and is removed in 2029.
Dealer doc fees in Michigan
The documentary preparation fee may not exceed 5% of the vehicle's cash price or $280, whichever is less. The dollar limit is adjusted for inflation every two years; the $280 figure was set in January 2025.
Whatever the rule, the fee is part of your out-the-door price. Ask for it in the written quote and negotiate the total, not the line. See dealer fees explained.
Title and registration
Titles and registrations are handled by the Michigan Department of State. The title must be transferred within 15 days of the sale. Most dealerships handle the title transfer and registration for the buyer.
Also worth knowing
- A $15 late fee is charged if the title is transferred more than 15 days after the sale.
- License plate fees for 1984 and newer passenger vehicles are based on a percentage of the manufacturer's suggested retail price when the vehicle was first titled.
Sources
- Michigan Department of Treasury: Sales and Use Tax (michigan.gov)
- Michigan Department of Treasury: Revenue Administrative Bulletin 2026-11 (michigan.gov)
- Michigan Department of Treasury: Form 485, Instructions for Michigan Vehicle Dealers Collecting Tax from Buyers Who Will Register and Title Their Vehicle in Another State (2026) (michigan.gov)
- Michigan Department of Insurance and Financial Services: Bulletin 2025-03-CF, Documentary Preparation Fee Adjustment (michigan.gov)
- Michigan Department of State: Title transfer and vehicle registration (michigan.gov)
Last checked Nov 10, 2026; next review by Feb 10, 2027. This page explains how the rules generally work and is not tax or legal advice. Rules change, so confirm with the state. Report an error.
Concierge
Rather not do this part yourself?
Tell us the car you want. A person finds it, checks it, negotiates the out-the-door price in writing, and lines up the paperwork. You approve every step.