The No-Trade-Credit States

Rates shown are each jurisdiction's vehicle-tax rate plus average local add-on where one applies. Oregon makes the list on a technicality — its 0.5% dealer privilege tax ignores trade-ins, but at half a percent the sting is more of a tickle. The bigger your trade, the bigger every number above gets: double the trade, double the cost.

Michigan gives a trade-in credit — up to a point. The credit currently stops at $12,000, so trade a $20,000 vehicle and the last $8,000 of it is taxed as if it didn't exist: about $480 in extra tax at 6%. The cap rises each January and disappears entirely in 2029, which is the rare tax rule with a happy ending. The Michigan guide has the schedule.

Revenue, mostly — taxing the full price collects more, and "we tax the whole transaction" is easier to administer than tracking credits. Several of these jurisdictions structure their vehicle tax as a titling or excise tax rather than a sales tax, and credits never made it into the design. Whatever the reason, the effect lands on you at signing, not on the legislature.

First, price it in: in a no-credit state, a dealer trade offer of $10,000 is really worth $10,000 minus the tax you didn't save — compare that against selling privately before you decide the convenience is free. Second, run your actual deal through the out-the-door calculator, which applies your state's real credit rule automatically — full, capped, or none. And if you owe more than the trade is worth, that's a different problem with its own math: the negative equity calculator shows what rolling it forward really costs.

Credit rules and rates compiled from state statutes and DMV sources, verified July 2026, monitored monthly for legislative changes. Some states apply conditions we don't list here (dealer-only credits, registration requirements) — each state's linked guide has the fine print. Corrections: squint@sideeyemath.com. Cite freely; link back kindly.