Out-the-door price in Kentucky
How Kentucky works
- Kentucky has no sales tax on a car. It charges a 6% motor vehicle usage tax on the retail price, the same rate everywhere in the state. You pay it to your county clerk when you title the car, not to the dealer, and the tax is never less than $6.
- Your trade-in reduces the taxable amount on a new or a used car, with no dollar cap. The trade-in has to be a motor vehicle registered to you; a boat or other non-vehicle does not count.
- A rebate applied at the time of purchase is not taxed, whether it comes from the manufacturer or the dealer, and neither is a dealer discount.
- Kentucky does not cap the doc fee, so it is negotiable. The calculator taxes it, because the Department of Revenue treats a documentation or processing fee as part of the sale. The Department has not said so for the usage tax specifically.
- Extended warranties and service contracts are not taxed. Equipment and accessories the dealer adds to the car are.
- Registering the car: you apply for title and registration at your county clerk within 15 days. A dealer can file for you if you agree, and if it files through the state's electronic system it must collect the system's filing fee from you as a separate line labeled "online system filing fee." The dealer's 60-day temporary tag covers you meanwhile. The title and registration amounts are in the calculator's total because you pay them either way.
- If you buy from a dealer outside Kentucky and register here, Kentucky credits the tax you paid that state against the 6% usage tax, unless that state gives no similar credit to tax paid in Kentucky.
Rules last verified Oct 11, 2026. Our methodology.
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What a Kentucky advertised price has to include
The Kentucky Motor Vehicle Commission requires a dealer's advertised price to include every charge the customer is required to pay for the vehicle, dealer handling and dealer profit included. The FTC expects the same of every fee the dealer requires, the doc fee included, so only government charges like the usage tax, title and registration can be added on top. That still isn't your out-the-door number; the calculator above adds the rest.
Federal law comes first
The FTC requires a dealer's advertised price to include every fee the dealer charges. Only charges the government requires you to pay, like tax, title and registration, can be left out. Where a state's rules let a dealer leave a fee out, the dealer still has to follow the federal rule, so the fee goes in. The FTC says a state's doc-fee rules can add disclosures, but they don't change the price that has to be advertised. Read the FTC's guidance.
Has to be in the advertised price
- The doc fee, which Kentucky does not cap, whatever the dealer calls it
- Freight (destination) and dealer preparation or handling charges
- Anything the dealer has added to the car, such as accessories and add-on packages
- The $3 temporary tag, if the dealer passes it on
- The online system filing fee, if the dealer files your title electronically and charges it on every sale
Can still be added on top
- The 6% usage tax you pay to your county clerk
- The $9 title fee and the $21 registration fee, plus the $126 ownership fee on a plug-in vehicle
- The lien recording fee, if you finance
- Optional products you choose to buy, such as a service contract or GAP coverage
- The advertising rule: a Kentucky dealer that advertises a price has to identify the car by year, make, model and new or used, and the stated price has to include every charge the customer must pay for the vehicle, including freight, dealer preparation and dealer handling. The price is stated before any down payment or trade-in allowance.
- The doc fee: Kentucky sets no cap and no amount. A retail installment contract may list a processing fee separately, but a seller is not required to. The Commission's rule does not use the words "doc fee," so check that an ad's price includes it.
- Specific cars: a new car advertised for sale has to be in the dealer's possession, shown and sold at the advertised price, or the ad has to say it is not in stock and give an estimated delivery time.
- The online system filing fee: when a dealer files your title through the state's electronic system, Kentucky law makes the dealer collect the system provider's fee and list it on its own line on your buyer's order. The dealer must use the system for most sales from July 1, 2027. If the dealer charges it on every sale, the FTC expects it in the advertised price.
- Trade-ins: a Kentucky ad may not state a specific trade-in amount or range.
More in our guide: Do dealers have to put fees in the advertised price? What actually changed for 2026
Kentucky in detail
Kentucky OTD questions, answered
Does a trade-in reduce sales tax in Kentucky?
Yes — Kentucky taxes the difference: your trade-in's value is subtracted before tax is computed.
Are manufacturer rebates taxed in Kentucky?
No — rebates passed to you are treated like a cash discount and reduce the taxable amount.
Is the doc fee capped in Kentucky?
No — doc fees are uncapped in Kentucky; buyers report a typical $586.00. It's negotiable as part of your total OTD.
What does a Kentucky dealer's advertised price have to include?
Every charge you are required to pay for the vehicle: the doc fee, freight, dealer preparation and handling, and anything the dealer added. Only the 6% usage tax, the title fee, registration and other government charges can be added on top.
Do I pay the usage tax at the dealership in Kentucky?
Usually you pay it to your county clerk when the car is titled, at 6% of the price after your trade-in and rebates. A dealer is not required to collect it, but may collect it and send it in for you.
Is there a limit on a Kentucky dealer's doc fee?
No. Kentucky sets no cap. The fee is negotiable, and it belongs in the advertised price.