Four Money-saving Reasons to Buy an Electric Car in New Jersey

The popularity of new electric cars - like the Nissan Leaf, the Ford Focus, or the Chevy Volt - is undeniable. Car companies and their dealers report waiting lists of thousands of interested customers and delays before delivery.

The reasons to buy an electric car are obvious - high mileage, reduced fuel costs, lower dependence on foreign oil and a cleaner environment. But there are additional benefits - particularly for New Jersey residents interested in purchasing an electric car.

Federal tax credit

Buyers of the Nissan Leaf or other lesser-known all-electric cars qualify for a $7,500 income tax credit from the federal government. Unlike deductions, a tax credit is a direct reduction in the amount of taxes you owe.

President Obama outlined broad measures to support the development and sales of electric cars in his 2011 State of the Union speech. Following up on that, the administration announced plans to make the $7,500 tax credit available at the car dealer - similar to the system put in place for the federal "Cash for Clunkers" program.

State tax credit

Electric car buyers also qualify for a $4,000 New Jersey state tax rebate. This is on top of the $7,500 credit from the federal government.

"If we send the message that New Jersey is welcoming toward electric vehicles, then we'll see more sales and attract an entirely new industry that can bring new high-paying jobs for working class residents," says New Jersey State Assembly Member Wayne DeAngelo.

Bills in the New Jersey legislature would require shopping centers and state highway rest stops to be equipped with electric car charging stations, and provide state tax breaks to individuals or businesses for privately installing electric car charging stations to service the growing number of electric cars on new Jersey roads.

Sales tax exemption

In New Jersey, zero-emission vehicles (ZEV) like the Nissan Leaf or upscale electric car models from Tesla are exempt from state sales tax. The sales tax in the state is 7%, which would mean a savings of $2,100 on a $30,000 vehicle. Consumers who buy, rent or lease a ZEV are also exempt from state use taxes.

"We should be supporting cleaner energy alternatives such as electric vehicles to invest in our future," says New Jersey State Assembly David R. Benson. "It will mean a cleaner environment, a stronger economy and job creation for our residents."

HOV Lane Exemption

The New Jersey Turnpike Authority allows electric cars to travel in the HOV lanes on the New Jersey Turnpike, even when there is only one person in the car. Owners of hybrid electric vehicles and alternative fuel vehicles have been allowed to travel in the HOV lanes on the New Jersey Turnpike since 2006.