New Jersey (NJ) Car Sales Tax & Fees [+Calculator]
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
Looking to purchase a vehicle in New Jersey?
Then you should be prepared to pay the 6.625% car state sales tax.
Because of this potential expense, many people want to know if tax exemptions or if buying a car out of state can help.
Here’s what you need to know about sales tax and other fees on vehicle purchases in New Jersey.
Key Takeaways
- New Jersey charges a 6.625% car sales tax on new or used vehicle purchases.
- NJ charges tax according to the price of the car after trade-ins are applied but before incentives or rebates.
- There is no county car sales tax in New Jersey.
- The average documentation fees in NJ are $335.
Table of Contents
- Key Takeaways
- How Much Is the Car Sales Tax in New Jersey?
- How to Calculate New Jersey Sales Tax on a Car
- New Jersey Vehicle Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- What is the County Sales Tax?
- Car Sales Tax for Trade-Ins in New Jersey
- Paying Car Sales Tax on Private Sales in New Jersey
- Calculating Sales Tax on Rebates & Dealer Incentives
- New Jersey DMV & State Fees
- When Sales Tax Is Exempt in New Jersey
- New Jersey EV Rebates & Incentives
- Conclusion
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in New Jersey?
The vehicle sales tax in New Jersey is 6.625%.
There are no additional local or county tax rates in New Jersey.
How to Calculate New Jersey Sales Tax on a Car
Multiply the vehicle price (after trade-ins but before incentives) by the sales tax fee of 6.625%.
For example, imagine you are purchasing a vehicle for $35,000 with the state sales tax of 6.625%.
In this example, multiply $35,000 by .06625 to get $2,318.75. The total purchase price of the vehicle would be $36,318.75.
Calculate Sales Tax in New Jersey Example
- Initial Car Price: $40,000
- Sales Tax Rate: 6.625%
- Trade-In Amount: $5,000
- Rebate/Incentive Amount: $1,000
Sales Tax = ($40,000 - $5,000) * .06625
Sales Tax = $2,318.75
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
New Jersey Vehicle Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, you must still pay sales tax when you buy a used car in New Jersey. The sales tax on the purchase of a used vehicle in New Jersey is 6.625%.
For instance, if you were to purchase a used car for $30,000, then the sales tax on that vehicle would be $1,987.50. That would bring the final purchase price of the vehicle to $31,987.50.
What is the County Sales Tax?
New Jersey does charge an additional local or county tax. Therefore, the sales tax in all 21 counties is 6.625%.
Car Sales Tax for Trade-Ins in New Jersey
You do not have to pay a sale tax on the trade-in on your vehicle in the state of New Jersey.
In other words, when calculating sales tax, be sure to subtract the trade-in amount from the car price.
Let’s say that you're purchasing a new car for $60,000 and your trade-in is valued at $20,000. This would put your new vehicle purchase price at $40,000, which is the taxable amount.
Paying Car Sales Tax on Private Sales in New Jersey
When you purchase a vehicle from a private party, you do not pay the sales tax to the private party. Instead, you will pay the 6.625% sales tax to the New Jersey Department of Motor Vehicles.
As an example, if you purchase a $30,000 car from a private party, then you will pay a $1,987.50 sales tax to the New Jersey DMV.
Calculating Sales Tax on Rebates & Dealer Incentives
The state of New Jersey does tax rebates and dealer incentives. In other words, be sure to use the purchase price (after any trade-ins) when calculating the sales tax amount.
As an example, let’s say you want to purchase a new truck for $65,000 and the dealer provides a $4,000 rebate.
You have to pay a sales tax on the full price of the vehicle before the rebate is applied. Therefore, the taxable amount is still $65,000.
New Jersey DMV & State Fees
The registration fee for a vehicle will depend on the year the vehicle was manufactured and its weight. There are currently nine classifications for vehicles.
Other fees to consider are:
- Registration- $46.50- $98 (depending on vehicle age)
- Title Transfer Fee: $60
- Title Transfer Fee with Lien- $85
- Title Transfer Fee with Two Liens- $110
- Late Fee for Title Transfer- $25
- Plate Transfer Fee- $5
New Jersey Dealership Fees
There is no limit as to how much a dealership can charge in doc fees. The average dealership fee in New Jersey is $335.
Document or doc fees are the fees incurred to handle the paperwork involved in finalizing the sale to the state.
You may be able to negotiate other dealer fees such as the transport and advertising fee.
When Sales Tax Is Exempt in New Jersey
You do not have to pay sales tax on a vehicle if you receive it as a gift. In addition, farm vehicles, recycling equipment, and school buses are exempt from the state tax.
Also, you can avoid paying sales tax if you register the vehicle in another state within 30 days.
New Jersey EV Rebates & Incentives
New Jersey offers a decent amount EV rebates and incentives, mostly centered around charging.
New Jersey residents can still claim the federal EV tax credit.
Conclusion
In New Jersey, car sales tax is 6.625% on new and used vehicles. The tax applies after the trade-in value is deducted but before any incentives or rebates. If buying from a private party, then you should pay the sales tax directly to the DMV.
Use the New Jersey Vehicle Sales Tax Calculator to estimate the cost of your new car purchase.
Looking for the car sales tax in another state? Check out our comprehensive guide on car sales tax in each state!
Tax information and rates are subject to change, please be sure to verify with your local DMV.
