How to Buy a Car Out of State as a New Jersey Resident
Considering the significant investment usually involved in buying a car in New Jersey, looking outside the Garden State to secure better deals and take advantage of lower prices is not out of place. Likewise, if you're on the hunt for a particular make and model or a hard-to-find vehicle, chances are you may need to travel across state lines to track it down. However, you should know that getting your dream car from out of state can involve extra steps and requirements compared to local purchases. This article will guide you through buying a car in New Jersey from out of state and provide insights on necessary considerations, such as taxes, transportation, and compliance with local regulations, to make the purchase as uncomplicated as possible.
Are Cars Cheaper in New Jersey?
Getting lower prices is a common reason for out-of-state vehicle purchases. New Jersey generally has competitive pricing on cars; however, neighboring states like New York and Pennsylvania, with larger populations and urban areas, naturally have more auto dealers and, therefore, more competition amongst them. This, in turn, typically results in relatively lower car prices in these areas. In addition to taking advantage of enticing dealership promotions, many New Jerseyans opt for out-of-state purchases because they found specific models that were previously unavailable in the state. Nonetheless, whether it is cheaper buying a car in New Jersey or doing so from out of state depends on several factors, such as state-specific taxes
and vehicle registration fees. For example, New Jersey residents must pay a 6.625% sales tax on all vehicle purchases. This applies to cars bought out of state (provided the car will be delivered to and used in NJ), regardless of whether you already paid a sales tax in the state of purchase. You will also have to title and register the car in the state before using it, which comes with its own fees. As such, when comparing prices, it is important to consider the total cost of the purchase, including taxes, fees, and other charges, before deciding on where to buy your car.
Understanding State-Specific Regulations
Understanding applicable state-specific regulations is crucial if you decide on buying a car in NJ from out of state. The first thing to do is find the temporary registration options available in the intended state of purchase. Most states typically provide temporary tags or trip permits (for a fee) that allow you to drive your car from the place of purchase to your residence. Many auto dealers help customers handle this; nonetheless, always get confirmation when negotiating. Once the car is delivered to New Jersey, you must register it with the Motor Vehicle Commission (MVC) within 60 days. You will typically be required to provide certain documentation to complete this registration, such as the car’s title, proof of insurance, and a valid ID. Note that the MVC typically requires all vehicles to pass safety and emissions tests before being registered (100% electric-powered vehicles and certain other vehicle types are exempt from this). To this end, you may need to make certain modifications to the car to ensure that it passes these tests, especially if you purchased it from a state with different emissions and safety requirements.
Handling Taxes and Fees
One of the most important financial considerations when buying a car in New Jersey from out of state is understanding applicable taxes and fees. Vehicle purchases in NJ are subject to a 6.625% sales tax if any of the following conditions apply:
● The buyer is a New Jersey resident
● The buyer has a home in New Jersey
● The buyer is a business purchaser with a location in New Jersey
● The buyer intends to use the vehicle for business purposes in New Jersey
As such, even if you buy the car from a state that imposes a sales tax, you will still be required to pay a separate sales tax in New Jersey. The 6.625% sales tax is calculated based on the car's total purchase price. This includes its base price, the dealer's service charges and rebates, extended warranties, and any additional fees associated with the purchase (excluding titling and registration fees). However, if you've already paid out-of-state sales taxes, you may be able to claim a tax credit to lower the amount of New Jersey sales tax you owe. The rules and procedures for claiming this credit typically vary by situation, so it's advisable to contact the New Jersey Division of Taxation or a tax professional for specific information.
In addition to the sales tax, you must also cover the cost of titling and registering the car with the New Jersey Motor Vehicle Commission (MVC). Titling and registration fees vary depending on the car's weight, age, and whether it was financed with a lien, and can range from $95.50 to $170 or more.
Transportation of the Vehicle
After buying a car in NJ from out of state, the next thing to do is figure out how to get it to your location in the Garden State. There are two main ways of doing this: driving it back yourself or hiring a transport/shipping service to handle the delivery. Driving the car back is usually the more cost-effective option, especially if you purchased it from a neighboring/relatively nearby state. Nevertheless, it is important to ensure that you have all the necessary temporary tags or trip permits before embarking on the journey; you should also confirm that you have adequate auto insurance coverage for the trip.
On the other hand, if you are buying a car from a relatively distant state, arranging for it to be shipped to you in New Jersey may be the more practical option. The cost of shipping your car to your location in New Jersey will primarily depend on the distance; other factors like the urgency of the situation and whether you are willing to pay for added protection will also affect this cost. Consider getting recommendations from your auto dealer to reputable transport companies (some dealerships may also offer this service). Be sure to get and compare quotes from at least three transport companies, look up reviews on your preferred shipper, and get a clear idea of what their services entail before signing the dotted line.
Completing the Registration Process in New Jersey
Once your car has been delivered to your location in New Jersey, you must register it with the Motor Vehicle Commission and obtain valid NJ tags before you can legally drive it in the state. To do this, you must first schedule an appointment with the agency. At your appointment, you will be required to provide the following documents:
● The vehicle’s title
● Completed Universal Title Application and Vehicle Registration Application forms
● Proof of New Jersey auto insurance
● A valid ID
● Lien holder information and financing statement (for cars that are leased or financed)
● A purchase order (for cars bought from states that issue titles but where the title does not have an NJ Dealer Tax Stamp)
● A pencil tracing or photo of the car’s VIN, a notarized statement from the seller that includes the car’s make, year of manufacture, VIN, and selling price, and the car’s last vehicle registration card (for cars bought from states that do not issue titles)
Depending on the specific circumstances, additional documents may also be required, like a power of attorney (if someone will be signing documents on your behalf) and dealer reassignment documentation. The registration process typically includes an inspection to ensure the car complies with New Jersey's vehicle emissions and safety standards. You will also be required to pay all applicable sales taxes and registration fees during your visit to the MVC. Once the registration process is complete, you will be issued New Jersey license plates for the car; make sure you affix them properly as soon as you receive them to avoid fines and other penalties.
Dealing with Insurance
You must have the following types of auto insurance before you can register your car in New Jersey:
● Liability insurance to cover damages you cause to others in an accident - this does not cover medical expenses
● Personal Injury Protection (PIP) to cover medical expenses for you and others under your policy, regardless of who is at fault in the accident
● Uninsured motorist coverage – this protects you if you're in an accident with someone who doesn't have proper insurance coverage
Your auto insurance coverage must be gotten from a state-approved insurer; most insurers offer basic and standard policies with varying coverage options and minimum amounts. Be aware that you can be asked to show proof of insurance when driving in New Jersey, and failing to do so can result in heavy fines and even getting your license suspended. As such, contacting your insurance company and making proper arrangements for your auto insurance before picking up your car is important. Some out-of-state dealerships may offer temporary insurance, but you should still confirm with your insurer that you have continuous coverage for the trip back and afterward.
Conclusion
While there are several benefits to buying cars from out of state, such as access to lower prices, better deals, and a wider selection of vehicles, it is important to understand the requirements for these purchases. A clear understanding of New Jersey's and the other state's taxes, fees, and other auto regulations goes a long way in ensuring a smooth and hassle-free process. As such, in addition to the tips provided in this article, it is always a good idea to do thorough research and consider all financial and legal angles before buying a car from out of state in New Jersey.
Considering the significant investment usually involved in buying a car in New Jersey, looking outside the Garden State to secure better deals and take advantage of lower prices is not out of place. Likewise, if you're on the hunt for a particular make and model or a hard-to-find vehicle, chances are you may need to travel across state lines to track it down. However, you should know that getting your dream car from out of state can involve extra steps and requirements compared to local purchases. This article will guide you through buying a car in New Jersey from out of state and provide insights on necessary considerations, such as taxes, transportation, and compliance with local regulations, to make the purchase as uncomplicated as possible.
Are Cars Cheaper in New Jersey?
Getting lower prices is a common reason for out-of-state vehicle purchases. New Jersey generally has competitive pricing on cars; however, neighboring states like New York and Pennsylvania, with larger populations and urban areas, naturally have more auto dealers and, therefore, more competition amongst them. This, in turn, typically results in relatively lower car prices in these areas. In addition to taking advantage of enticing dealership promotions, many New Jerseyans opt for out-of-state purchases because they found specific models that were previously unavailable in the state. Nonetheless, whether it is cheaper buying a car in New Jersey or doing so from out of state depends on several factors, such as state-specific taxes
and vehicle registration fees. For example, New Jersey residents must pay a 6.625% sales tax on all vehicle purchases. This applies to cars bought out of state (provided the car will be delivered to and used in NJ), regardless of whether you already paid a sales tax in the state of purchase. You will also have to title and register the car in the state before using it, which comes with its own fees. As such, when comparing prices, it is important to consider the total cost of the purchase, including taxes, fees, and other charges, before deciding on where to buy your car.
Understanding State-Specific Regulations
Understanding applicable state-specific regulations is crucial if you decide on buying a car in NJ from out of state. The first thing to do is find the temporary registration options available in the intended state of purchase. Most states typically provide temporary tags or trip permits (for a fee) that allow you to drive your car from the place of purchase to your residence. Many auto dealers help customers handle this; nonetheless, always get confirmation when negotiating. Once the car is delivered to New Jersey, you must register it with the Motor Vehicle Commission (MVC) within 60 days. You will typically be required to provide certain documentation to complete this registration, such as the car’s title, proof of insurance, and a valid ID. Note that the MVC typically requires all vehicles to pass safety and emissions tests before being registered (100% electric-powered vehicles and certain other vehicle types are exempt from this). To this end, you may need to make certain modifications to the car to ensure that it passes these tests, especially if you purchased it from a state with different emissions and safety requirements.
Handling Taxes and Fees
One of the most important financial considerations when buying a car in New Jersey from out of state is understanding applicable taxes and fees. Vehicle purchases in NJ are subject to a 6.625% sales tax if any of the following conditions apply:
● The buyer is a New Jersey resident
● The buyer has a home in New Jersey
● The buyer is a business purchaser with a location in New Jersey
● The buyer intends to use the vehicle for business purposes in New Jersey
As such, even if you buy the car from a state that imposes a sales tax, you will still be required to pay a separate sales tax in New Jersey. The 6.625% sales tax is calculated based on the car's total purchase price. This includes its base price, the dealer's service charges and rebates, extended warranties, and any additional fees associated with the purchase (excluding titling and registration fees). However, if you've already paid out-of-state sales taxes, you may be able to claim a tax credit to lower the amount of New Jersey sales tax you owe. The rules and procedures for claiming this credit typically vary by situation, so it's advisable to contact the New Jersey Division of Taxation or a tax professional for specific information.
In addition to the sales tax, you must also cover the cost of titling and registering the car with the New Jersey Motor Vehicle Commission (MVC). Titling and registration fees vary depending on the car's weight, age, and whether it was financed with a lien, and can range from $95.50 to $170 or more.
Transportation of the Vehicle
After buying a car in NJ from out of state, the next thing to do is figure out how to get it to your location in the Garden State. There are two main ways of doing this: driving it back yourself or hiring a transport/shipping service to handle the delivery. Driving the car back is usually the more cost-effective option, especially if you purchased it from a neighboring/relatively nearby state. Nevertheless, it is important to ensure that you have all the necessary temporary tags or trip permits before embarking on the journey; you should also confirm that you have adequate auto insurance coverage for the trip.
On the other hand, if you are buying a car from a relatively distant state, arranging for it to be shipped to you in New Jersey may be the more practical option. The cost of shipping your car to your location in New Jersey will primarily depend on the distance; other factors like the urgency of the situation and whether you are willing to pay for added protection will also affect this cost. Consider getting recommendations from your auto dealer to reputable transport companies (some dealerships may also offer this service). Be sure to get and compare quotes from at least three transport companies, look up reviews on your preferred shipper, and get a clear idea of what their services entail before signing the dotted line.
Completing the Registration Process in New Jersey
Once your car has been delivered to your location in New Jersey, you must register it with the Motor Vehicle Commission and obtain valid NJ tags before you can legally drive it in the state. To do this, you must first schedule an appointment with the agency. At your appointment, you will be required to provide the following documents:
● The vehicle’s title
● Completed Universal Title Application and Vehicle Registration Application forms
● Proof of New Jersey auto insurance
● A valid ID
● Lien holder information and financing statement (for cars that are leased or financed)
● A purchase order (for cars bought from states that issue titles but where the title does not have an NJ Dealer Tax Stamp)
● A pencil tracing or photo of the car’s VIN, a notarized statement from the seller that includes the car’s make, year of manufacture, VIN, and selling price, and the car’s last vehicle registration card (for cars bought from states that do not issue titles)
Depending on the specific circumstances, additional documents may also be required, like a power of attorney (if someone will be signing documents on your behalf) and dealer reassignment documentation. The registration process typically includes an inspection to ensure the car complies with New Jersey's vehicle emissions and safety standards. You will also be required to pay all applicable sales taxes and registration fees during your visit to the MVC. Once the registration process is complete, you will be issued New Jersey license plates for the car; make sure you affix them properly as soon as you receive them to avoid fines and other penalties.
Dealing with Insurance
You must have the following types of auto insurance before you can register your car in New Jersey:
● Liability insurance to cover damages you cause to others in an accident - this does not cover medical expenses
● Personal Injury Protection (PIP) to cover medical expenses for you and others under your policy, regardless of who is at fault in the accident
● Uninsured motorist coverage – this protects you if you're in an accident with someone who doesn't have proper insurance coverage
Your auto insurance coverage must be gotten from a state-approved insurer; most insurers offer basic and standard policies with varying coverage options and minimum amounts. Be aware that you can be asked to show proof of insurance when driving in New Jersey, and failing to do so can result in heavy fines and even getting your license suspended. As such, contacting your insurance company and making proper arrangements for your auto insurance before picking up your car is important. Some out-of-state dealerships may offer temporary insurance, but you should still confirm with your insurer that you have continuous coverage for the trip back and afterward.
Conclusion
While there are several benefits to buying cars from out of state, such as access to lower prices, better deals, and a wider selection of vehicles, it is important to understand the requirements for these purchases. A clear understanding of New Jersey's and the other state's taxes, fees, and other auto regulations goes a long way in ensuring a smooth and hassle-free process. As such, in addition to the tips provided in this article, it is always a good idea to do thorough research and consider all financial and legal angles before buying a car from out of state in New Jersey.