Out the Door Price Formula
The out the door price (OTD) is the total amount you pay to drive a car off the dealer lot. Unlike MSRP or the advertised price, OTD includes every cost — taxes, fees, and add-ons. Here is the formula:
OTD Price =
Selling Price + Sales Tax + Registration + Doc Fee + Add-Ons - Trade-In - Rebates
In most states, sales tax is calculated on the selling price minus your trade-in value. This means trading in a vehicle reduces both the price and the tax you owe, making the total savings larger than the trade-in value alone.
Example: OTD Price on a $35,000 Car
Here is an example out the door price calculation for a car with a $35,000 selling price in Texas (6.25% state tax + 2% local tax):
| Selling Price | $35,000 |
| Sales Tax (8.25%) | $2,888 |
| Registration & Title | $350 |
| Documentation Fee | $500 |
| Out the Door Price | $38,738 |
In this example, taxes and fees add $3,738 (10.7%) on top of the selling price. This is why it is critical to negotiate based on out the door price, not sticker price.
How to Use This Calculator
Follow these steps to estimate your out the door price before visiting the dealership:
Enter the negotiated selling price
Use the price you've negotiated or expect to pay—not the MSRP sticker price. If you haven't negotiated yet, use MSRP as a starting point.
Select your state for tax rates
State sales tax rates are pre-filled for all 50 states. Add your city or county tax rate if applicable (typically 0-3% on top of state tax).
Add registration and dealer fees
Include the dealer's documentation fee ($150-$700 depending on state and dealer) and government registration/title fees ($150-$500).
Add dealer add-ons (if any)
Many dealers include add-ons like paint protection ($399-$999), nitrogen tire fill ($99-$299), or VIN etching ($149-$299). These are often negotiable or removable.
Include trade-in and rebates
Your trade-in value reduces the taxable amount in most states. Manufacturer rebates and incentives reduce the final price.
Pro Tips for Getting the Best OTD Price
- • Always ask the dealer for an itemized out the door quote in writing before agreeing to anything
- • Question any add-ons you didn't request — they can almost always be removed
- • Compare your calculated OTD to what others paid using our deal database
- • Get OTD quotes from 3-5 dealers and negotiate using the lowest as leverage
- • Negotiate the selling price first, then ask for the OTD — don't let the dealer bundle everything
- • Check if your state offers a trade-in tax credit before deciding how to sell your current vehicle
What's Included in Out the Door Price?
Out the door price is the total amount you pay to drive a vehicle off the dealer lot. It includes every cost — no surprises. Here is a breakdown of each component:
Selling Price
The negotiated vehicle price, also called the purchase price. This is the number you negotiate with the dealer. It may be above, at, or below MSRP depending on supply and demand for that vehicle.
Sales Tax
State and local sales tax calculated on the selling price (minus trade-in in most states). Rates range from 0% (Alaska, Delaware, Montana, New Hampshire, Oregon) to over 10% in some cities. This is the largest non-price component of OTD.
Registration & Title Fees
Government fees to register the vehicle in your name and issue a title. These are set by your state and are not negotiable. Typically $150-$500 depending on the state and vehicle value.
Documentation Fee (Doc Fee)
The dealer's charge for processing paperwork. Ranges from $0 to $700+ depending on the state and dealer. Some states cap doc fees by law (e.g., California caps at $85). This fee is set by the dealer and is sometimes negotiable.
Dealer Add-Ons
Optional (and sometimes mandatory) items the dealer adds to the vehicle. Common add-ons include paint protection film, ceramic coating, nitrogen tire fill, VIN etching, and wheel locks. These are almost always negotiable and often overpriced.
What is NOT included in OTD price
Out the door price does not include monthly payments, interest charges, or extended warranty costs. If you are financing, your total cost over the life of the loan will be higher than OTD due to interest. OTD is the amount you owe at the time of purchase, regardless of how you pay.
Car Sales Tax Rates by State (2026)
Below are the state-level sales tax rates that apply to vehicle purchases. Many cities and counties add additional local taxes on top of these rates. Use the calculator above to include your local rate.
| State | State Tax Rate |
|---|---|
| Alabama | 4% |
| Alaska | No sales tax |
| Arizona | 5.6% |
| Arkansas | 6.5% |
| California | 7.25% |
| Colorado | 2.9% |
| Connecticut | 6.35% |
| Delaware | No sales tax |
| Florida | 6% |
| Georgia | 4% |
| Hawaii | 4% |
| Idaho | 6% |
| Illinois | 6.25% |
| Indiana | 7% |
| Iowa | 5% |
| Kansas | 6.5% |
| Kentucky | 6% |
| Louisiana | 4.45% |
| Maine | 5.5% |
| Maryland | 6% |
| Massachusetts | 6.25% |
| Michigan | 6% |
| Minnesota | 6.875% |
| Mississippi | 5% |
| Missouri | 4.225% |
| Montana | No sales tax |
| Nebraska | 5.5% |
| Nevada | 6.85% |
| New Hampshire | No sales tax |
| New Jersey | 6.625% |
| New Mexico | 4% |
| New York | 4% |
| North Carolina | 3% |
| North Dakota | 5% |
| Ohio | 5.75% |
| Oklahoma | 4.5% |
| Oregon | No sales tax |
| Pennsylvania | 6% |
| Rhode Island | 7% |
| South Carolina | 5% |
| South Dakota | 4.5% |
| Tennessee | 7% |
| Texas | 6.25% |
| Utah | 6.1% |
| Vermont | 6% |
| Virginia | 4.15% |
| Washington | 6.5% |
| West Virginia | 6% |
| Wisconsin | 5% |
| Wyoming | 4% |
Note: These are state-level rates only. Local city and county taxes may add 0.5% to 5% on top of these rates. Five states have no sales tax on vehicle purchases: Alaska, Delaware, Montana, New Hampshire, and Oregon.
Frequently Asked Questions
What is out the door price?
Out the door price (OTD) is the total amount you pay to drive a vehicle off the dealer lot. It includes the negotiated selling price plus sales tax, registration and title fees, documentation fees, and any dealer add-ons. OTD price is always higher than the sticker price or advertised price because it includes all taxes and fees.
What is the formula for out the door price?
The out the door price formula is: OTD Price = Selling Price + Sales Tax + Registration & Title Fees + Doc Fee + Dealer Add-Ons - Trade-In Value - Rebates. Sales tax is calculated on the selling price minus trade-in value in most states.
How much do taxes and fees add to a car price?
Taxes and fees typically add 8% to 12% on top of the selling price, depending on your state and local tax rates. On a $35,000 car, expect to pay $2,800 to $4,200 in taxes and fees. States with no sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon) will be on the lower end.
Is out the door price negotiable?
The selling price and dealer add-ons within the OTD are negotiable. Sales tax and government registration fees are not negotiable. The documentation fee is set by the dealer and sometimes negotiable. You should always ask the dealer to remove unnecessary add-ons like paint protection, nitrogen tire fill, or VIN etching.
Does out the door price include tax?
Yes, out the door price includes all applicable sales taxes. It is the final, total amount you pay — there should be no additional charges beyond the OTD price. If a dealer quotes an OTD price and then adds more fees at signing, that is a red flag.
What is the difference between MSRP and out the door price?
MSRP (Manufacturer's Suggested Retail Price) is the sticker price set by the manufacturer and does not include taxes, registration, or dealer fees. Out the door price is the total you actually pay, including all taxes and fees. OTD is typically 8-12% higher than MSRP, though dealer discounts can offset some of that difference.
Which states have no sales tax on cars?
Five states have no state sales tax on vehicle purchases: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local municipalities to charge sales tax, so some Alaska buyers may still pay a local tax. These are the cheapest states to buy a car from a tax perspective.
Does trade-in reduce sales tax?
In most states, yes. Your trade-in value reduces the taxable amount. For example, if you buy a $35,000 car and trade in a vehicle worth $10,000, you only pay sales tax on $25,000. This is called a trade-in tax credit and can save you $500 to $1,000 or more. However, a few states (California, Hawaii, Maryland, Michigan, Virginia, Washington DC) do not offer this credit.
Related Resources
What is Out the Door Price?
Complete guide to understanding OTD pricing and what to watch out for.
How to Negotiate Car Price
Expert tips and scripts for negotiating the best deal on a new or used car.
Dealer Fees Explained
Breakdown of every fee dealers charge and which ones you can negotiate away.
Auto Loan Calculator
Calculate your monthly payment and total interest on a car loan.
Manufacturer Incentives
Every active rebate and cash offer that can reduce your out the door price.
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