Overview
Indiana also runs two separate tax-free paths most buyers have never heard of: an outright gift exemption (Exemption 7 on Form ST-108E) that applies no matter who's giving the car - family or not - as long as nothing of value changes hands, and a narrower intrafamilial title exemption (Exemption 11) for adding or removing a spouse, parent, child, grandparent, or sibling on an existing title. Pick your scenario below.
01 - Official fees
Indiana car sales tax fees at a glance
| Fee | Amount | Notes |
|---|---|---|
| Standard rate | 7% | dealer and private sales statewide |
| Dealer sale base | price − trade-in | |
| Private sale base | greater of price or fair market value | |
| Outright gift (Exemption 7) | $0 | any recipient, no money or debt assumed |
| Intrafamilial title change (Exemption 11) | $0 | spouse/child/parent/grandparent/sibling |
| Assumed loan balance on a "gift" | 7% of debt | counts as consideration |
Figures verified June 2026 against official sources (listed below). Always confirm the final amount with the Indiana Bureau of Motor Vehicles (BMV) - counties can add small local fees.
03 - Same state, other costs
More Indiana vehicle costs
04 - Common questions
Indiana car sales tax FAQ
Why did the BMV charge me tax on more than what I paid?
You likely ran into Indiana's fair-market-value rule. On private-party sales, the Department of Revenue can tax the vehicle's Kelley Blue Book value instead of your stated price if it thinks the sale price was understated. Keep a signed bill of sale (BMV Form 44237) showing a realistic price to head this off.
Does a trade-in actually reduce what I owe?
Yes, but only at a licensed dealer. Indiana subtracts your trade-in allowance from the sale price before applying 7%. A $10,000 trade-in against a $30,000 purchase drops your taxable base to $20,000 - a $700 savings. Private-party sales get no such deduction, since there's no dealer netting two vehicles against each other.
Is gifting a car in Indiana really tax-free for anyone, not just family?
Yes - that's Indiana's Exemption 7. As long as no money changes hands and the recipient isn't assuming a loan, the gift is exempt from the 7% tax whether you're giving it to your daughter or a friend. Both parties complete Form ST-108E at the BMV branch to document it.
What's the difference between the gift exemption and the family exemption?
Exemption 7 covers any true gift, regardless of relationship. Exemption 11 is narrower and specific: it exempts adding or removing a spouse, child, parent, grandparent, or sibling from an existing title - for example, adding your spouse as a co-owner - without treating it as a taxable sale.
I'm taking over my parents' car loan as part of the deal - is that still a tax-free gift?
No. If you assume any remaining loan balance, Indiana treats that debt as consideration and taxes it at 7%, even though no cash changed hands between you and the recipient. Only the assumed-debt amount is taxed, not the full value of the car.
I just moved to Indiana with a car I already own - do I owe 7% again?
No, as long as you already paid sales tax to your previous state - Indiana credits it. New residents just pay the title, registration, and excise tax due at their first Indiana registration, not a second round of sales tax.
05 - Receipts
Official sources
Every number on this page comes from these documents - check them yourself.