Auto loan rates in New Jersey.

What's actually different about buying a car in New Jersey

• Flat 6.625% sales tax. The rate applies to the purchase price of new and used vehicles alike, with no county or city add-ons. Electric vehicles now pay the full rate too: their exemption was phased out and ended on July 1, 2025.
• Trade-in credit, dealer trades only. The dealer's credit for your trade comes out of the taxable price when you trade a motor vehicle to a registered dealer that takes it for resale and the purchase contract and trade happen at the same time. Selling your car on your own, even the same day, doesn't earn the credit. More than one trade on a single purchase is allowed.
• Rebates and doc fees are taxed. New Jersey includes manufacturer rebates in the taxable sales price, whether they show up as a down payment or a price reduction, so a $2,000 rebate still costs you about $133 in tax. Documentary service fees are taxable too. Actual Motor Vehicle Commission title and registration fees are not.
• No doc fee cap. The state doesn't limit the amount, but dealers must itemize the documentary services and the price of each in writing on the sale document, and may not tell you the government requires them. Treat the fee as part of the price you negotiate.
• A one-time luxury and fuel-inefficient surcharge. New passenger cars with a sales or lease price of $45,000 or more, or a fuel efficiency rating under 19 mpg, pay a 0.4% surcharge when first titled. On a $50,000 new SUV that's $200.
• Title and registration. A title transfer is $60, or $85 with a lien (the usual case when you finance). Passenger registration runs $46.50 to $84 a year by weight and age; a car within two model years costs $59 under 3,500 pounds or $84 above it. Zero-emission vehicles add an annual fee that started at $250 in July 2024 and rises $10 a year for four years, and a new ZEV pays four years of it up front.
• Private-party purchases. Buy from a private seller and you pay the 6.625% on the actual purchase price when you title the car. The Division of Taxation checks casual sales and may assess tax based on the vehicle's book value if a notice goes unanswered. Gifts are exempt.
• Inspections. A new vehicle's first inspection is due at five years, and after that the car goes in on a two-year cycle.

The tax math on a real deal

A $35,000 dealer purchase with a $15,000 trade-in, anywhere in New Jersey:

• Taxable amount: $35,000 minus $15,000 = $20,000
• Sales tax: 6.625% of $20,000 = $1,325
• Plus 6.625% on the doc fee, the $85 title fee with a lien, and registration
• Luxury surcharge: none at this price, unless the car is rated under 19 mpg

The trade-in credit is worth about $994 on a $15,000 trade, so a private buyer has to beat the dealer's offer by more than that before selling privately wins. Compare offers in the trade-in equity calculator. If the deal includes a rebate, remember the tax is figured as if the rebate weren't there.

Buying out of state as a New Jersey resident

Plenty of North Jersey buyers shop New York and Pennsylvania dealers. New Jersey residents owe New Jersey sales tax on a vehicle they register here, so confirm before you sign how the out-of-state dealer will handle it, and make sure the lender can work with an out-of-state dealer and a New Jersey title.

The New Jersey credit union bench

New Jersey's credit unions are mostly regional, and a pre-approval from one gives the dealer a number to beat:

• Affinity Federal Credit Union: Basking Ridge-based and the largest credit union in the state by assets.
• Financial Resources Federal Credit Union: Branchburg-based, serving central New Jersey.
• Proponent Federal Credit Union: Nutley-based, serving North Jersey.
• Garden Savings Federal Credit Union: Parsippany-based.
• Credit Union of New Jersey: Ewing-based, in the Trenton area.

Rates move constantly, so verify current figures and membership rules before applying. Families connected to Joint Base McGuire-Dix-Lakehurst should also compare Navy Federal, PenFed and USAA; see military auto loan rates. Why credit unions usually price below banks: bank vs. credit union auto loans.

Frequently asked

Why was I charged sales tax on my rebate?

New Jersey counts manufacturer rebates as part of the sales price, so the tax is figured on the price before the rebate. A trade-in to the dealer is what actually lowers the taxable amount.

Is there a New Jersey-only loan rate?

No. Lenders price by credit, term, and vehicle, not by state. The New Jersey-specific money is in the trade-in rules, the rebate and doc fee treatment, and the surcharge.

How does a lease buyout get taxed in New Jersey?

New Jersey taxes long-term leases (over six months) up front, using either the total lease payments or the vehicle's original purchase price. Whether your buyout owes more sales tax can depend on which method your lease used, so ask the leasing company before you run the lease buyout math.

Do I pay tax on a car I'm refinancing?

No. Refinancing changes the lender, not the owner, so there is no sale to tax. See current refinance rates.