Sales tax is a percentage of the car price that you owe to your state and county in which you’ll be registering your vehicle. This means that you’ll be taxed based on your primary residence rather than the location of the dealership. You can decide whether to include the sales tax amount within your car loan or pay it in full separately from your car loan. Paying separately can usually be done at the dealership, but you may need to pay the sales tax amount at your local DMV if you’re purchasing a vehicle at an out-of-county or out-of-state dealership. Be sure to research how sales tax works for car purchases in your state – some states charge tax on the full price of the car you’re buying, while others charge no tax at all. Most states, however, allow a trade-in credit to offset the taxable amount of a car purchase.