Alabama charges sales tax, automotive vehicle rate of 2% at the state level, and local jurisdictions add their own, which brings a typical vehicle to about 4.75%. A trade-in does reduce the taxable price, which is real money on the deal.
Alabama taxes automotive vehicles at a reduced 2% state rate; each city and county has its own automotive rate (ALDOR rate table 'AUTO' rate type), collected where the dealership is located.
Only one city and one county automotive tax may be collected per sale (reciprocity rule 810-6-5-.04.01); if the buyer pays the dealer's city/county tax, the home locality cannot charge again at registration.
Typical local of 2.75% = Birmingham city 2.0% + Jefferson County 0.75% (ALDOR rate table, current 2026). Mobile city 2.25% + Mobile County 1.0% = 3.25%. Highest single-locality automotive rates in the ALDOR table reach 5.0%, so combined local can exceed 5% in a few places; 5.0% is used as the practical maximum.
Manufacturer rebates applied to the purchase price are taxable in Alabama (ALDOR Automotive Dealer Guide).
Lease/rental tax on automotive vehicles is 1.5% state plus local rental tax, charged on each payment.
| Fee | Amount |
|---|---|
| Title | $15.00 |
| Registration | ~$24 |
| Designated agent title fee (title application through county/agent (up to $1.50)) | $1.50 |
Lease tax applies to each monthly payment rather than to the full price of the car, so you pay it as you go.
Pick your city for the exact combined rate where you register, plus what title and registration run there.
Alabama charges 2% at the state level and local jurisdictions add more, so a typical combined rate on a vehicle is about 4.75% and can reach 7% at the high end. The rate is set by the dealership location, so pick your city above for the exact figure.
State and local automotive tax is levied on the net difference after a used automotive vehicle is taken in trade (Rule 810-6-1-.22). Trade-in of a leased/rental vehicle does not qualify.
Title is $15.00. Standard passenger plate $23 plus $1.25 issuance fee; county licensing officials add local issuance fees, and annual ad valorem tax on the vehicle is collected at the same time.
No. Alabama sets no statutory cap, and dealers typically charge around $489. No statutory cap. Typical figure from CarEdge 2026 survey (secondary).
Tax applies to each monthly payment rather than the whole price of the car, so the tax is spread across the lease.
Rates, fees, and rules change. These figures are estimates for planning, not tax advice; confirm the final numbers with the dealer and your state's motor vehicle agency before you buy.