New Jersey Car Sales Tax
The statewide car sales tax in New Jersey is 6.625%. This rate applies to all vehicle purchases, new and used. There is additional county and local sales tax.
Written by Macy Fouse
Reviewed by Jessica Barrett
All car sales in New Jersey come with a 6.625% sales tax, but your total tax rates will include your county and local taxes, which will add about 0.003%.
When shopping for cars, it’s easy to just focus on the big sticker price, but it’s crucial to keep all the other costs in mind as well. One of the most important additional expenses when buying a car is the sales tax, but this will vary depending on where you buy your car.
New Jersey’s car sales tax rates tend to be on the higher side of average, but in order to know just how much you’ll end up paying, you need to nail down the exact rate in your area. Fortunately,
car insurance
super app Jerry
has created a guide to car sales tax in New Jersey. Let’s take a look at the different numbers then learn how to find cheap car insurance in New Jersey
.How much is the car sales tax rate in New Jersey?
The statewide car sales tax in New Jersey is 6.625%. This rate applies to all vehicle purchases, new and used. On top of that, you’ll also have to pay county or local sales tax.
The highest sales tax rate for car purchases is found in Cumberland County, where buyers are stuck with an 8.625% combined sales tax rate. Every other county in New Jersey offers a combined sales tax rate of 6.625%. The average across all of New Jersey is 6.628%.
How are car trade-ins taxed in New Jersey?
n most cases, when you buy a car at a dealership, dealers will allow you to trade in an old vehicle, then apply that credit to your new vehicle purchase. In New Jersey, the value of trade-ins is not subject to tax, saving you money on your purchase.
For example, let’s say you’re going to buy a
Chevrolet Equinox L
worth $27,000 in Marlton
, and you plan to trade in your old Honda Civic
for a $6,500 credit. In Burlington county, you’ll only have to pay 6.625% combined state and local sales tax on $20,500 of the purchase. It’s important to note, though, that dealer rebates and incentives will not be exempt from sales tax. In other words, the taxable price of your car is the price before dealer incentives. If you qualify for a rebate, you still have to pay taxes as if you were paying the full price.
MORE: When should you trade in a car?
How to calculate sales tax on a car in New Jersey
Using the online calculator, you can easily calculate the total sales tax in your corner of New Jersey. This calculator includes the total sales tax amount as well as the city, county, and special district tax rates, if applicable.
Key Takeaway Combine the statewide sales tax of 6.625% with your local or county sales tax to get the total car sales tax in your area.
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Exemptions from New Jersey car sales tax
For the most part, all vehicle purchases in New Jersey are subject to sales tax. However, there are a few instances where you can apply for an exemption. You may
qualify for exemption
if you meet the following criteria:- The vehicle is being used by a government agency.
- The vehicle is used directly and exclusively for farming purposes.
- The vehicle was acquired by an heir or beneficiary or as a gift.
If you think you may qualify for a tax exemption, you’ll have to visit a
motor vehicle agency
in person. There may be other exemptions as well, so it’s best to ask the agent at the DMV if you’re not sure. MORE: New Jersey electric vehicle incentives
How to estimate New Jersey tax, title, and registration fees
In addition to the sales tax, you’ll also need to consider other additional costs when purchasing a vehicle in New Jersey. These costs include title and
vehicle registration
fees, along with license plate transfers and the documentation fee charged by many dealerships. Here’s how the additional costs associated with car purchases in New Jersey shake out:
Cost | Average cost |
|---|---|
Sales tax | 6.628% |
Registration fee | $35 minimum |
Title fee | $60 to $85 |
Plate transfer | $4.50 |
Documentation fee | $335 average |
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MORE: Is car insurance tax deductible?
How to find affordable car insurance in New Jersey
When you get your payments and fees straightened out, there’s one more major expense left to deal with: buying
car insurance
for your new ride. New Jersey’s car insurance prices tend to be higher than the national average, but that won’t be a problem when you use the Jerry
app. Calculating the different sales tax rates can be complicated, but using Jerry is simple. Just download the app, fill in your information, and watch the personalized quotes roll in. As a licensed broker, Jerry gathers rates from over 50 top insurance companies to deliver you the best options. Plus, Jerry users save an average of $887 a year on car insurance!
“This was so easy! Signing up withJerrysaved me $499 on my semi-annual insurance. As if it was nothing!” —Kache P.
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FAQ
How much is sales tax on a used car in New Jersey?
The sales tax for used cars in New Jersey is the same as for new vehicle purchases—a statewide base rate of 6.625% plus your local or county tax rate.
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