What you sign, what you keep, what it costs, and how the trade-in tax credit works in 2026. Last checked 2026-10-28.
Short answer: to sell a car privately in Michigan, fill in the seller's part of the original title (an accurate odometer reading, your name, address and signature, and the buyer's name and address), take your license plate off before the buyer drives away, and keep a copy of the title and a record of the sale for at least 18 months. The buyer has 15 days to transfer the title ($15, plus a $15 late fee after that) and pays 6% sales tax. If you trade in at a dealer instead, the dealer handles the title work, you still keep your plate, and in 2026 Michigan takes up to $12,000 of your trade-in off the taxable price of the next car, worth up to $720 in tax.
From the Michigan Department of State:
| Step | What to do |
|---|---|
| Fill in the title | Complete the seller's portion of the original title: an accurate odometer reading, your name, address and signature, and the buyer's name and address. "Estimates or guesses are not acceptable" for the mileage. If there's no space for the odometer reading, use an Odometer Mileage Statement. |
| Clear any loan first | If there's a lien on the title, you need a lien termination statement from the lender (or the title signed by the lienholder) showing the loan is paid in full. |
| Remove your plate | Take the license plate off before the buyer takes the car. The only exception is a sale to an immediate family member. |
| Keep proof | Keep a copy of the title and a record of the sale for at least 18 months. With proof of sale you aren't liable for damages or violations if the buyer never transfers the title. |
The buyer then takes the signed title, proof of Michigan No-Fault insurance and payment to a Secretary of State office (title transfer).
| Item | Amount |
|---|---|
| Title transfer fee | $15 |
| Late fee if the title isn't transferred within 15 days of the sale | $15 more |
| Sales tax | 6% of the purchase price or the car's fair market value, whichever is greater |
| Plate | A new plate and registration, or $10 to $15 to transfer one they already own |
Source: Michigan Department of State. The "whichever is greater" rule means writing a low price on a private sale doesn't lower the buyer's tax.
Federal law requires a written mileage disclosure when ownership changes. Cars from model year 2011 on stay covered until they're 20 years old; model year 2010 and older are exempt (49 CFR 580.17). So for any car from 2011 or later, the reading on the title has to be the actual number on the odometer the day you sell.
When you trade a car in toward another one, Michigan charges its 6% sales tax on the price minus your trade-in, but only up to a cap on the trade-in's value. The cap was $5,000 in 2019 and goes up $1,000 every January 1; in 2026 it's $12,000, so the most a trade-in can save you in state tax is $720. In 2027 the cap is $13,000, and from 2029 there's no cap (MCL 205.51).
| Trade-in value | Taxed on | State tax saved in 2026 |
|---|---|---|
| $5,000 | $5,000 | $300 |
| $10,000 | $10,000 | $600 |
| $15,000 | $12,000 | $720 |
| $20,000 | $12,000 | $720 |
A private sale gets no such credit: the buyer of your car pays tax on what they pay you, and you pay full tax on your next car. That gap is part of what a private sale has to beat. Trade in or sell it yourself? · Trade-in tax in other states
What does the seller fill out on a Michigan title? The seller's portion of the original title: an accurate odometer reading, the seller's name, address and signature, and the buyer's name and address. If the title has no space for the mileage, use an Odometer Mileage Statement. The Michigan Department of State says estimates or guesses are not acceptable for the mileage.
Do I keep my license plate when I sell my car in Michigan? Yes. Remove the plate before the buyer takes the car, unless you're selling to an immediate family member. The same goes for a trade-in: take the plate off the car you trade. You can transfer it to your next car.
How long does the buyer have to transfer the title in Michigan? 15 days from the date of sale. The title transfer fee is $15, and there's an additional $15 late fee after 15 days. The buyer also pays 6% sales tax on the price or the car's fair market value, whichever is greater.
Am I liable if the buyer never transfers the title? Not if you have proof of sale. Under Michigan law, a seller with proof of sale isn't liable for damages or violations if the title isn't transferred. Keep a copy of the title and a record of the sale for at least 18 months.
How much sales tax does a trade-in save in Michigan in 2026? Michigan taxes the price of your next car minus your trade-in, up to a cap on the trade-in's value: $12,000 in 2026, so the most it saves is $720 in state sales tax. The cap rises $1,000 each January 1 and goes away in 2029.
Can I sell or trade in a car in Michigan if I still owe money on it? The lien has to be released before the title changes hands: you need a lien termination statement from your lender showing the loan is paid in full. In a private sale you pay the lender first. At a dealer, paying off your loan is normally part of the deal, and if you owe more than the car is worth, you still pay the difference.
General information from Michigan and federal sources, not legal or tax advice. Rules change; check with the Michigan Department of State before you sell. How we estimate your trade-in value · Selling in Ohio · Selling in Indiana · Selling in Illinois · Selling in Wisconsin
How we calculate it · Trade-in tax by state · What dealers make · Trade in or sell? · What dealers check · Owe more than it's worth? · When to sell · Selling a car by state · Stop calls & texts