The New Jersey used car sales tax is 6.625% of the purchase price, collected by the Motor Vehicle Commission when you title and register the vehicle. The rate is the same statewide, whether you buy from a dealer or a private seller, and you have 10 days from the date of sale to complete titling and pay.1New Jersey Motor Vehicle Commission. How To Get A Title For A New Vehicle There are no county or city add-ons.
What the 6.625% Applies To
The tax applies to every used motor vehicle sale in New Jersey unless a specific exemption covers the transaction.2New Jersey Revised Statutes. New Jersey Code 54:32B-3 – Taxes Imposed What counts as the taxable amount, though, depends on where you bought the car.
At a dealership, a trade-in reduces the taxable price. The dealer subtracts your trade-in credit before applying 6.625%. Buy a $20,000 car and hand over a trade-in worth $5,000, and you pay tax on $15,000, or $993.75 instead of $1,325. The credit only applies when you trade a vehicle to a registered dealer as part of the same transaction.3New Jersey Division of Taxation. New Jersey Consumer Automotive Tax Guide
Private-party sales have no trade-in credit. You pay 6.625% on the full price written on the title. Selling your old car separately doesn’t offset anything, even if you sold it the same week.
When the State Questions Your Price
New Jersey checks reported sale prices against National Automobile Dealers Association (NADA) values. If the Division of Taxation thinks your reported price is too low, it mails a notice asking you to prove what you actually paid.4New Jersey Division of Taxation. Motor Vehicle Casual Sales Notices
Documentation that supports your price usually closes the case. Without acceptable proof, the state can assess tax based on the NADA value and send a Notice of Adjustment. Ignoring the letter doesn’t help; the assessment goes through anyway.4New Jersey Division of Taxation. Motor Vehicle Casual Sales Notices Keep the signed bill of sale. If the car was priced low because of its condition, hold onto the listing, photos, and any repair estimates.
Exemptions That Skip the Tax
A handful of transfers avoid the 6.625% entirely. Each has its own paperwork, and the MVC looks closely at exemption claims.
Gifts
A genuine gift, with no money or other value exchanged, is exempt. The word “GIFT” must appear as the sale price on the title. Any sign the title has been altered can prompt MVC staff to ask for more documentation.5New Jersey Motor Vehicle Commission. Vehicles Exempt From Sales Tax The relationship between the parties doesn’t matter; a friend can gift a car the same as a parent. Calling a sale a gift to dodge the tax is where people run into trouble, and the Division of Taxation looks for it.
Inheritance
Vehicles passing to an heir, legatee, or trust beneficiary are exempt.5New Jersey Motor Vehicle Commission. Vehicles Exempt From Sales Tax Bring documentation of your right to the vehicle, such as a short certificate from probate court or the relevant trust papers.
Non-Residents
If you live outside New Jersey and will register the vehicle in your home state, you can avoid NJ sales tax. Under N.J.S.A. 54:32B-10(a), you must not be a New Jersey resident, have no permanent home in the state, and not be employed in the state where the vehicle will be used.6New Jersey Division of Taxation. Form ST-10 Motor Vehicle Sales and Use Tax Exemption Report File Form ST-10 and expect to show an out-of-state license and proof of insurance from your home state. Your home state will typically charge its own sales or use tax when you register there.
Commercial Trucks
Trucks with a gross vehicle weight rating over 26,000 pounds and vehicles used exclusively for interstate freight are exempt. Form ST-4, the Exempt Use Certificate, is the required paperwork.7New Jersey Division of Taxation. Sales Tax Form ST-4 Exempt Use Certificate
Buying Out of State
Bring a used car home from another state and New Jersey’s 6.625% use tax applies when you register it. The state gives you credit for sales tax already paid elsewhere. If you paid 4% in Pennsylvania on the purchase, you owe the 2.625% difference to New Jersey. If the other state’s rate matched or exceeded 6.625%, you owe nothing more.2New Jersey Revised Statutes. New Jersey Code 54:32B-3 – Taxes Imposed
Bring proof of what you paid, usually a receipt from the other state’s DMV or dealer paperwork itemizing the tax. Without that proof, you pay the full 6.625% again.
Paying at the MVC
Sales tax is collected at any New Jersey Motor Vehicle Commission agency when you title and register the vehicle. The 10-day window from the date of sale is firm, and missing it triggers a late penalty on top of your registration cost.1New Jersey Motor Vehicle Commission. How To Get A Title For A New Vehicle
If you’re claiming an exemption, complete the applicable form before you walk in. “GIFT” on the title for gifts. Form ST-10 for non-residents. Form ST-4 for qualifying commercial vehicles. Show up without the form and you either pay the full tax that day or come back another day. The MVC accepts credit cards, personal checks, money orders, and cash; checks should be made out to “NJ MVC.”1New Jersey Motor Vehicle Commission. How To Get A Title For A New Vehicle
Other Fees on Top of the Tax
Sales tax is the biggest number, not the only one. At the MVC counter you’ll also pay:
- Title transfer: $60, or $85 if the vehicle has a lien.8New Jersey Motor Vehicle Commission. Registration and Title Fees
- Registration: varies by weight and model year. Most used passenger cars fall into the under-3,500-pound class at $46.50 or the over-3,500-pound class at $71.50. Vehicles less than two years old cost more, at $59.00 and $84.00. Drivers 65 and older and people with disabilities get a $7 discount on passenger vehicle registration.8New Jersey Motor Vehicle Commission. Registration and Title Fees
- Zero-emission vehicle surcharge: $250 annually as of July 2024, rising $10 per year through 2028, due at initial registration and every renewal.8New Jersey Motor Vehicle Commission. Registration and Title Fees
Dealer purchases usually include a separate documentation fee on the contract. New Jersey doesn’t cap those, so ask about the doc fee before you agree to a price.
What a $15,000 Used Car Actually Costs at the Counter
A typical private-party purchase of a $15,000 sedan, under 3,500 pounds and more than two years old, with no trade-in and no exemption:
- Sales tax: $15,000 × 6.625% = $993.75
- Title transfer: $60.00
- Registration: $46.50
- Approximate total: $1,100
That figure sits on top of the purchase price, insurance, and any repairs. Fold it into your budget while you’re still shopping, not after you’ve handed over a deposit.