The statewide car sales tax in New Jersey is 6.625% plus additional county and local sales tax. This rate applies to all vehicle purchases, new and used.

Written by Macy Fouse

Edited by Melanie Krieps Mergen

Updated on Feb 8, 2024

Table of Contents

How much is the car sales tax rate in New Jersey?
How to calculate sales tax on a car in New Jersey
Exemptions from New Jersey car sales tax
How are car trade-ins taxed in New Jersey?
How to estimate New Jersey tax, title, and registration fees

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All

car sales

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 new and used vehicles in New Jersey, you’ll need to account for sales tax rates of 6.625% plus county and local taxes.
New Jersey’s vehicle sales tax rates tend to be on the higher side of average, but exact rates will depend on where you live.
You might be exempt from sales tax if you are using the vehicle for farming purposes, it’s a zero-emission vehicle, or you inherited or were
gifted the vehicle
.

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 purchases of new cars and used cars

On top of the base state sales tax rate, you’ll also have to pay county or local sales tax

The average total car sales tax across the state of New Jersey is 6.628%.

The county with the highest New Jersey sales tax rate for car purchases: 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%.

How to calculate sales tax on a car in New Jersey

To calculate the total sales tax amount in your corner of New Jersey:

Add any applicable city, county, and special district tax rates to the statewide sales tax rate of 6.625%

Multiply the percentage by the sales price of your vehicle to get the total sales tax due for your car purchase

Exemptions from New Jersey car sales tax

For the most part, all vehicle purchases in New Jersey are subject to sales tax—but there are a few instances where you can apply for a

sales tax exemption

The vehicle is being used by a government agency

The vehicle is used directly and exclusively for farming purposes

The vehicle is a

zero-emission vehicle

(ZEV)

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.

How are car trade-ins taxed in New Jersey?

In most cases, when you buy a car at a dealership, dealers will allow you to trade in an old vehicle and 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.

Keep in mind: 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 vehicle purchase price.

How to estimate New Jersey tax, title, and registration fees

In addition to the sales tax, you’ll need to consider other additional costs when purchasing a vehicle in New Jersey. Here’s how the additional costs associated with car purchases in New Jersey shake out: