Breaking Down Title and Car Registration Fees, Taxes, Insurance, and Other Vehicle Expenses

Why You Can Trust Compare.com

At Compare.com, it’s our mission to find simple ways to help our customers save money on the things they need. While we partner with some of the companies and brands we talk about in our articles, all of our content is written and reviewed by our independent editorial team and never influenced by our partnerships. Learn about how we make money, review our editorial standards, and reference our data methodology to learn more about why you can trust Compare.com.

Written by Mandy Sleight Edited by Nick Versaw

Updated April 23, 2024

Getting your car on the road comes with several costs, whether you’re buying a new or used car or restoring an older vehicle. Sales tax, title fees, license and registration fees, inspections, and car insurance are just a few of the costs you most likely have to pay to legally drive your car.

This article can help you understand the various vehicle expenses and what it might cost to register a new or used car in your state.

Key Takeaways:

• Most states require you to pay sales tax and title and registration fees before you can legally drive your car.
• Some states require ongoing fees while you own the vehicle, including inspection costs, personal property tax, and auto insurance.
• Colorado and Hawaii are the most expensive states for registering a car, while Arizona and Mississippi are the cheapest.

Necessary Costs to Get Your Vehicle on the Road

The costs of driving your vehicle legally can vary significantly by state and county. Here are some of the most common costs you’ll need to cover, both when registering your vehicle and throughout its ownership.

Title fees

Title fees are the costs your state charges to change ownership of the motor vehicle from the previous owner (or car dealership) to you. To change ownership, the prior owner must fill out the original title, which you’ll provide to your state’s department of motor vehicles (DMV).

You’ll receive a new Certificate of Title as proof of ownership of the car. The DMV uses this fee to process and print the new vehicle title, and it ranges from $4 in Arizona for new cars to $164.50 in Wisconsin.

Registration fees

You’ll need to pay a vehicle registration fee to legally drive on the road and get valid license plates for your car. It’s usually a rolling fee, meaning you pay it annually or biannually for as long as you own the vehicle. It might be a flat fee or based on your vehicle’s age, value, or weight, like in Idaho, Hawaii, and Colorado.

Your state’s DMV will calculate the cost and send you a vehicle registration renewal notice when it’s due.

License plate fees

Some states that allow transferring license plates from one owner to another charge a separate license plate fee. It may be combined with the registration cost or an individual fee. The year, make, weight, and type (passenger car or commercial vehicle) usually factor into the price.

Sales tax

Most states charge sales tax when you buy a car, though the amount can vary by state and whether you buy the vehicle from a private seller or dealership. You may also owe a local sales tax depending on the city or county you live in. State tax rates range from 2% in Alabama to 8.3% in Nevada.

The following states don’t charge sales tax:

• Alaska
• Delaware
• Iowa
• Montana
• New Hampshire
• North Dakota
• Oregon

Personal property tax

Around half of states require residents to pay personal property taxes, also known as an excise tax. The tax is usually due annually and is a flat or percentage fee based on your vehicle’s current value. Most states will send you a bill listing the amount you owe.

Documentation fees

When you buy a car from a dealer, the final cost typically includes a documentation fee. Some states don’t limit how much the dealership charges, while others have a cap or formula dealers must use to calculate the cost. Tennessee is the only state that doesn’t allow documentation fees.

Inspection costs

Some states and localities require vehicle inspections for different reasons, and the cost to have a shop perform the inspection varies. For example, you must pay a $20 inspection fee to get a new title in Kansas. Texans bringing a newly purchased vehicle with an out-of-state title to Texas must pay a $90 fee on top of other registration expenses.

You might also have to take your vehicle for an annual or biannual air quality or safety inspection. Rules and costs can vary by city, county, or state. For instance, Missouri doesn’t require an emissions test, but the city of St. Louis does, and it costs $24.

Hybrid and electric vehicle fees

Although many states offer incentives for buying a hybrid or electric vehicle — like rebates, lower registration fees, and tax credits — others charge extra fees to offset the taxes electric vehicle owners don’t pay at the gas pump. For example, Arkansas drivers pay an annual $100 fee for hybrid vehicles and $200 for electric vehicles, in addition to other car registration costs.

Car insurance premiums

Every state except New Hampshire requires drivers to have car insurance to legally drive. Multiple factors determine how much you pay for auto insurance, and rates can vary by ZIP code, vehicle make and model, and more. Personal and household factors, like driver age, claims history, and driving record, also affect your car insurance costs.

Taxes, Title, Registration Fees, and Other Vehicle Costs by State

The vehicle costs you might have to pay vary significantly from state to state. The table below outlines different fees by state, plus the average annual cost of car insurance in each. Some states charge flat fees, while others charge by the car’s gross weight, value, age, or other factors, like the type of vehicle (light truck, van, SUV, motorcycle, boat, etc.).

Car Registration Fees FAQs

Still unsure about what registration fees you’ll pay to register a car in your state? Check out the answers to the most common questions about the costs of registering a vehicle below.

Is your car registration tax deductible?

If you itemize your federal tax return, you can usually deduct the part of your car registration fee that is based on your vehicle’s value. Keep in mind that this tax deduction isn’t available in all states. Texas, for example, doesn’t base registration fees on vehicle value, so the cost isn’t tax deductible.

Does it cost more to register an EV?

It can cost more in some states. For instance, Alabama, Arkansas, Ohio, and Wyoming drivers pay an electric vehicle fee of $200 per year. Michigan drivers pay an additional $100 for EVs under 8,000 pounds, while heavier EVs cost $200. Missouri residents pay $37.50 annually for plug-in hybrids.

What happens if you pay your car registration late?

If you renew your car registration late, you might have to pay a state penalty to the local DMV. For example, California drivers pay a percentage of vehicle license fees, a California Highway Patrol (CHP) fee, and a late registration fee of $10 or $15 for late renewals. The cost increases if you’re over 10 days late renewing your registration.

What fees do you have to pay when buying a car from a private party?

It depends — the fees for buying a car from a private party vary by state. For example, Illinois buyers pay a use tax rather than a sales tax. Illinois calculates the use tax depending on the vehicle’s age and value. The use tax is cheaper than buying a new car and paying sales tax.

Do you have to pay any fees when selling a car privately?

If you sell your car for a profit, you’ll pay capital gains tax on the amount you make. For instance, if you buy the vehicle for $1,000, invest $3,000 in repairs, and then sell it for $5,000, you’ll pay taxes on the $1,000 of profit you earned.

Methodology

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.

Sources

1. California Department of Motor Vehicles, “Penalties,” accessed April 9, 2024.
2. Illinois Department of Revenue, “Private Party Vehicle Use Tax, accessed April 9, 2024.
3. National Conference of State Legislators, “State Policies Promoting Hybrid and Electric Vehicles,” accessed April 9, 2024.

Mandy Sleight Auto Insurance Writer

Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She is a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications. She uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content to help readers make smarter insurance choices that have a positive effect on their budgets and finances.