Out-the-door price in Michigan
How Michigan works
- Michigan sales tax is flat statewide at 6% — there is no local or county sales tax anywhere in Michigan, for vehicles or anything else.
- Your trade-in reduces the taxable amount, but Michigan caps the credit at $12,000 for 2026 (the cap has risen $1,000 each January since 2019 and becomes unlimited starting January 1, 2029).
- Manufacturer rebates are taxed in Michigan: tax is computed on the price before the rebate. A dealer's own cash discount, by contrast, does lower your taxable price.
- The dealer's documentary fee is capped at $280 in 2026, or 5% of the cash price if that's less (adjusted every two years for inflation), and it's part of the taxable price.
- Extended warranties and service contracts are NOT taxable in Michigan when itemized separately — unlike physical dealer add-ons, which are.
- Michigan's EV and plug-in hybrid registration surcharges are the highest in the country, and they're tied to the state gas tax rate rather than a fixed number.
Rules last verified Oct 3, 2026. Our methodology.
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What a Michigan advertised price has to include
Michigan has no rule of its own on what a dealer's advertised price has to include. Federal law fills the gap, and it's the rule that counts: every fee the dealer charges, the doc fee included, belongs in the advertised price, so only government charges like sales 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 (at most $280 in 2026, or 5% of the cash price if that's less)
- Freight (destination) and dealer preparation charges
- Anything the dealer has added to the car, such as accessories, waxing, undercoating or fabric protection
- The $1 temporary registration, if the dealer passes it on
- An electronic filing fee, if the dealer requires it
Can still be added on top
- The 6% sales tax
- Title, registration, plate and lien fees, and an electric car's or plug-in hybrid's registration surcharge
- Optional products you choose to buy, such as a service contract or GAP coverage
- Why the doc fee is in the price: no Michigan statute or rule says whether the doc fee belongs in an advertised price. Federal law requires every fee the dealer charges in the advertised price, so it does. Michigan's own installment-contract law already counts the doc fee as part of the cash price.
- The doc fee amount: at most $280 in 2026, or 5% of the cash price if that's less, adjusted every two years for inflation (next in January 2027). It's subject to sales tax, and a dealer can't say or imply that Michigan law requires it.
- Electronic filing: Michigan's title application lists an optional $34 electronic filing fee that you initial to accept. If it's truly optional it can stay out of the advertised price; if the dealer requires it, it belongs in.
- Dealers are now covered: in July 2026 the Michigan Supreme Court narrowed the Consumer Protection Act's exemption for licensed businesses, which had shielded car dealers, so the Act can now reach a dealer's advertising unless the law specifically allows what the dealer did.
- Price honoring: under Michigan's advertising law, refusing to sell at an advertised price is presumed to be a violation unless the seller can show otherwise.
More in our guide: Do dealers have to put fees in the advertised price? What actually changed for 2026
Michigan in detail
Michigan OTD questions, answered
Does a trade-in reduce sales tax in Michigan?
Yes — Michigan taxes the difference: your trade-in's value is subtracted before tax is computed.
Are manufacturer rebates taxed in Michigan?
Effectively yes — tax is computed before the rebate is applied, so you pay tax on the pre-rebate price.
Is the doc fee capped in Michigan?
Yes — the cap is $280.00 (MCL 492.113(2)(a); current $280 set by DIFS Bulletin 2025-03-CF (eff. 2025-2026 biennium)). A dealer may not exceed it.
What does a Michigan dealer's advertised price have to include?
Every fee the dealer charges, including the doc fee, freight and anything the dealer has added to the car. Michigan has no rule of its own on this, so federal law decides it. Only the 6% sales tax, title, registration, plate and other government fees can be added on top.
How is Michigan's registration tax figured on a car I buy?
By the car's base list price: $36 up to $6,000, $40 at $6,000 to $7,000, then $6 more for each $1,000, so about $238 for a $40,000 car. A used car pays less for its age: 90% one year after its model year, 81% after two and 72.9% after three or more. If you transfer a plate instead, you pay $15 at the sale and the tax at your next renewal.