Auto loan rates in Massachusetts.

What's actually different about buying a car in Massachusetts

• Flat 6.25% sales tax, statewide. There are no city or county add-ons on vehicles, so a Boston deal and a Springfield deal tax the same.
• Trade-in credit on dealer purchases, with one condition. When you buy from a registered dealer, tax applies to the price minus your trade-in, provided you paid tax on the vehicle you're trading (or it was exempt). A private sale gets no trade-in reduction at all.
• Rebates count only if applied at the sale. A manufacturer rebate used to cut the price at signing is treated as a discount and isn't taxed. A rebate mailed to you after the sale doesn't reduce the tax.
• The book value rule on private sales. Buy from a private seller and the 6.25% applies to the greater of your price or the car's clean trade-in value (book value), adjusted for mileage. The car's mechanical or body condition isn't considered. Transfers between parents, spouses, children and siblings are exempt when Massachusetts tax was paid on the vehicle before.
• An excise bill from your town each year. Massachusetts charges a motor vehicle excise of $25 per $1,000 of value, billed by the city or town where the car is garaged. The value is a set share of the manufacturer's list price: 90% in the model year, then 60%, 40%, 25%, and 10% from the fifth year on (50% if you buy before the model year begins). In the first year it's billed from the month you register through December.
• Title, registration and inspection. The title fee is $75 and a standard passenger plate registration is $60 for a two-year period. Massachusetts requires a yearly safety and emissions inspection (generally $35), and a newly registered car must be inspected within 7 days.
• No dollar cap on doc fees. State law doesn't limit the documentation fee, but the Attorney General's office has told dealers the fee must be built into the advertised price, and it counts as part of the taxable sale. Compare out-the-door prices, and negotiate the fee as part of the price.

The tax math on a real deal

A $35,000 dealer purchase with a $15,000 trade-in (tax was paid on the trade when you bought it):

• Taxable amount: $35,000 minus $15,000 = $20,000
• Sales tax: 6.25% of $20,000 = $1,250
• Plus the $75 title fee, $60 registration, and the dealer's doc fee

The excise comes later and runs on list price, not your negotiated price. If the car's list price is $35,000, the model-year excise is 90% of $35,000 at $25 per $1,000, or $787.50 for a full year, then about $525 the next year and $350 the year after. Budget it alongside the loan payment in the affordability calculator.

The trade-in credit is worth $937.50 on a $15,000 trade, so a private buyer has to beat the dealer's trade offer by more than that before selling privately wins. Compare offers in the trade-in equity calculator.

The Massachusetts credit union bench

Massachusetts has a deep credit union market, and a pre-approval from one of them gives you a number for the dealer to beat:

• DCU (Digital Federal Credit Union): Marlborough-based and the largest credit union in the state.
• Metro Credit Union: a large Greater Boston lender.
• Workers Credit Union and St. Mary's Credit Union: central Massachusetts and MetroWest options.
• Rockland Federal Credit Union: a South Shore lender.
• Hanscom Federal Credit Union: serving the Hanscom Air Force Base community and others who qualify.

Rates move constantly, so verify current figures and membership rules before applying. Eligible military families should also compare Navy Federal and USAA; see military auto loan rates. Why credit unions usually price below banks: bank vs. credit union auto loans.

Frequently asked

I bought a car cheap from a private seller. Why is my tax based on a higher number?

That's the book value rule: on a private sale the 6.25% applies to the greater of your price or the clean trade-in value, adjusted for mileage. Condition adjustments aren't allowed, so a rough car bought below book value is still taxed at book value.

Is there a Massachusetts-only loan rate?

No. Lenders price by credit, term, and vehicle, not by state. The Massachusetts-specific money is in the trade-in rules, the book value rule, and the excise.

How does a lease buyout get taxed in Massachusetts?

Buying the car from a registered lessor is a sale, and the 6.25% sales tax applies to it. Put that, plus the excise you'll keep paying, into the lease buyout math before deciding to keep the car.

Do I pay tax on a car I'm refinancing?

No. Refinancing changes the lender, not the owner, so there is no sale to tax. Your excise bill doesn't change either. See current refinance rates.