How car sales tax works in New Jersey
New Jersey charges a flat 6.625% sales tax on cars. There is no local add-on, so the rate is the same in every county.
- Trade-in credit: the value of a car you trade in to a registered dealer in the same deal is subtracted before tax, with no cap.
- Manufacturer rebates do not reduce the tax. New Jersey treats them like cash, so tax is charged on the price before the rebate. A discount the dealer gives you does lower it.
- The doc fee is taxable. New Jersey has no cap, but the dealer must itemize each documentary service and its price in writing.
- Luxury and fuel-inefficient surcharge: new cars priced $45,000 or more, or rated under 19 mpg, pay a one-time 0.4% surcharge. Zero-emission cars are exempt from it.
- Electric cars have paid the full 6.625% sales tax since July 1, 2025.
- Private sales: you pay 6.625% of the price at the MVC. If the price looks low, the state can ask for proof and tax the book value.
- Gifts are exempt, from anyone, if no money changes hands. New residents do not pay tax on a car bought and registered in another state before they moved.
Title and registration fees in New Jersey
| Fee | Amount |
|---|---|
| Title | $60 |
| Title with a lien (financed) | $85 |
| New car, 4-year registration (under / over 3,500 lb) | $211 / $311 |
| Used car, 1-year registration (under / over 3,500 lb) | $46.50 / $71.50 |
| Zero-emission vehicle fee (per year, July 2026 - June 2027) | $270 |
| Luxury / fuel-inefficient surcharge (new cars) | 0.4% |
New passenger cars must be registered for 4 years at once, so the registration line on a new-car deal is much higher than the yearly rate. A new electric car also pays four years of the ZEV fee at that first registration. Plates stay with the owner, so a used car never comes with a registration you can keep.
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $599.00 doc fee, bought from a dealer:
| Sales tax (6.625%) | $1,629.68 |
| Title fee | $60.00 |
| Registration fee | $211.00 |
| Total taxes | $1,629.68 |
|---|---|
| Total government fees | $271.00 |
| Out-the-door price | $33,499.68 |
| After the trade-in, you pay | $25,499.68 |
Common mistakes
- Subtracting the manufacturer rebate before calculating tax (New Jersey taxes the price before the rebate).
- Forgetting the one-time 0.4% surcharge on a new car priced $45,000 or more or rated under 19 mpg.
- Budgeting for one year of registration on a new car instead of the required 4-year registration.
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