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When you buy a car in New Mexico, you will need to pay a 4% sales tax.
There are more fees associated with buying a car than just the sticker price—and sales tax is a big one. If you’re about to buy a new or used car, don’t forget to include sales tax when creating your budget. Depending on where you buy your car, sales tax can sometimes increase the cost of your vehicle by a lot!
If you’re buying a car in New Mexico, however, you’ll only be charged a 4% sales tax on a new or used car—far below the national average.
For more information about sales tax, additional fees, and finding cheap
car insurance in New Mexico
, check out this useful guide from the top-rated car insurance
app, Jerry
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How much is the car sales tax rate in New Mexico?
When you buy a car in New Mexico, you’ll be charged a 4% sales tax on your purchase. You will always pay a sales tax of 4% on vehicle purchases, even though the regular sales tax in New Mexico can be between 5.5% and 9.4375%, depending on where you are.
MORE: Trade-in vs private sale: What’s the best way to sell your car?
How are car trade-ins taxed in New Mexico?
A great way to save some money when you buy a car is by trading your old vehicle to the dealership. In exchange, the credit you get from your trade-in is applied to your new car purchase. In New Mexico, the value of your trade-in vehicle is not subject to sales tax.
To put it simply, let’s say that you want to buy a new
Volkswagen Jetta
for $23,000 in New Mexico. You decide to trade in your old Nissan Sentra
and are offered a credit of $2,000 from the dealership. Since New Mexico doesn’t charge sales tax on the value of your trade-in, you will only pay the 4% sales tax on $21,000 of your purchase.While shopping for a car, your dealership may offer you a cash incentive or a manufacturer’s rebate. While rebates and incentives are still a great way to save money, sales tax in New Mexico is applied to the full cost of the vehicle before any rebates or incentives are applied. This means that you will pay sales tax on the full price of your car.
MORE: When should you trade in your car
How to calculate sales tax on a car in New Mexico
When you buy a car in New Mexico, you always pay a 4% sales tax. The regular state and county sales tax rates do not apply to vehicle purchases anywhere in the state.
Key Takeaway You will pay a 4% sales tax on any vehicle purchased in New Mexico.
Exemptions from New Mexico car sales tax
Nearly all vehicle purchases in New Mexico are subject to sales tax, but there are a few exceptions. You might not have to pay sales tax on a car purchase in New Mexico if:
- You are purchasing a vehicle for the State of New Mexico
- You have a disability and can prove that modifications made to the vehicle are due to your disability and are necessary for you to be able to drive
- You are a disabled veteran
If you’re not sure if you qualify for an exemption, you can find a complete list on the
New Mexico DMV website
.MORE:
How to estimate New Mexico tax, title, and registration fees
Sales tax isn’t the only additional cost you’re responsible for when you buy a car in New Mexico. You’ll also need to pay for your title and
vehicle registration
fees to cover the cost of filing the sales contract and tax documents for your vehicle. Here’s how the extra charges break down if you buy a car in New Mexico.
Cost type | Average cost |
|---|---|
Sales tax | 4% |
Registration fee | $43 to $232.50 |
Title fee | $3 |
Documentation fee | $330 |
How to find affordable car insurance in New Mexico
Now that you’ve made a budget for your car purchase, including the sales tax and extra fees, you’ll need
car insurance
before you can hit the road in New Mexico. Looking for the best coverage at an affordable rate can feel like a lot of work, but that’s why Jerry
is here to help.A licensed broker, the Jerry app does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.
“When usingJerry, I just put in a bit of information, and they found lots of different quotes for me. I was paying $305 a month for 2 brand-new cars, but now I’m paying $150 a month for both with full coverage!” —Robin U.
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How much is sales tax on a used car in New Mexico?
New Mexico applies the same 4% sales tax to both used and new car purchases.
By Alison Daurio
Expert Insurance Writer
Reviewed by Jessica Barrett.
- How much is the car sales tax rate in New Mexico?
- Exemptions from New Mexico car sales tax
- How to estimate New Mexico tax, title, and registration fees
- How to find affordable car insurance in New Mexico
- FAQs
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