Buying a car in New Jersey

Sales tax on a car in New Jersey

New Jersey charges a state sales tax of 6.625% on vehicle purchases.

Zero emission vehicles have been taxed at the full 6.625% rate since July 1, 2025. New passenger cars priced at $45,000 or more, or rated under 19 miles per gallon, also carry a separate one-time 0.4% Luxury and Fuel-Inefficient Vehicle Surcharge.

Does a trade-in lower the tax?

The trade-in credit reduces the taxable price when a motor vehicle is traded to a registered dealership that takes it for resale and the purchase contract and trade-in are executed at the same time.

Example, state tax only. On a $30,000 car with a $10,000 trade-in, the taxable amount is $20,000, so the state tax is about $1,325. Without the trade-in it would be $1,988. Local taxes and fees are extra.

Dealer doc fees in New Jersey

New Jersey rules do not set a dollar limit on the documentary service fee, but a dealer must itemize each documentary service and its price in writing on the sale document. A dealer may not represent that a government agency requires the service.

The documentation fee is taxed along with the vehicle.

Whatever the rule, the fee is part of your out-the-door price. Ask for it in the written quote and negotiate the total, not the line. See dealer fees explained.

Title and registration

Titles and registrations are handled by the New Jersey Motor Vehicle Commission. A title must be transferred within 10 working days of the sale to avoid a $25 penalty. A New Jersey dealership handles the registration and title work for the buyer.

Also worth knowing

• On a private sale, a buyer without acceptable proof of the purchase price may be assessed sales tax on the vehicle's N.A.D.A. guide value.
• A vehicle received as a gift is not subject to sales tax.
• Dealers must state the sales tax separately on the sales documents.

Sources

1. New Jersey Division of Taxation: Motor Vehicle Casual Sales Notices Questions and Answers (nj.gov)
2. New Jersey Division of Taxation: New Jersey Consumer Automotive Tax Guide (nj.gov)
3. New Jersey Division of Taxation: Zero Emission Vehicles Exemption notice (nj.gov)
4. New Jersey Division of Taxation: Luxury and Fuel-Inefficient Vehicle Surcharge Overview (nj.gov)
5. New Jersey Division of Consumer Affairs: Adopted rules N.J.A.C. 13:45A-26B, Automotive Sales Practices (njconsumeraffairs.gov)
6. New Jersey Motor Vehicle Commission: Transferring Vehicle Ownership (nj.gov)
7. New Jersey Motor Vehicle Commission: Initial Registration (nj.gov)

Last checked Nov 10, 2026; next review by Feb 10, 2027. This page explains how the rules generally work and is not tax or legal advice. Rules change, so confirm with the state. Report an error.