Michigan Auto Loan & Sales Tax Calculator
Calculate your Michigan auto loan monthly payment and vehicle sales tax. Michigan charges 6% on vehicle purchases.
Michigan Sales Tax Rules
Michigan charges 6% state sales tax on vehicles. Trade-in credit applies but is capped at $12,000 in 2026, rising to $13,000 in 2027, $14,000 in 2028, $15,000 in 2029, then unlimited from 2030. Michigan has no local sales taxes.
Source: Mich. Comp. Laws § 205.51
Frequently Asked Questions
What is the vehicle sales tax rate in Michigan?
Michigan charges a 6% state sales tax on vehicle purchases under Mich. Comp. Laws § 205.51. Michigan has no county or local sales taxes — 6% is the uniform statewide rate.
Does Michigan reduce sales tax for trade-ins?
Yes, but with a cap. Michigan allows a trade-in credit capped at $12,000 in 2026. The cap increases $1,000 per year until 2029, after which there is no cap. Trade-ins above the cap do not reduce your taxable purchase price further.
How does Michigan's trade-in cap work in practice?
In Michigan, if your trade-in is worth $12,000 or less (in 2026), you deduct the full value from the purchase price before calculating the 6% sales tax. If your trade-in exceeds $12,000, only $12,000 is deducted and you pay 6% on the remainder above that threshold.
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This tool is for informational and educational reference only and does not constitute financial advice. Calculations are estimates based on the inputs provided and state average data. Actual results will vary. Always consult a licensed financial advisor before making financial decisions.