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Four-Year Registrations to Take Effect October 1

Jul 06, 2004

The new State budget passed last Thursday by the New Jersey Legislature, and signed into law on June 30 by Governor McGreevey, contains a provision which increases the initial registration period for most new passenger vehicle sales and leases to four years.This means that new car buyers/lessees will have to pay “up front” for four years of annual registration fees.The measure is designed to produce additional revenue for the State in the first year, and reduce processing costs by the Motor Vehicle Commission for renewals in later years.While this measure imposes a significant burden on buyers and lessees, it probably represents the lesser of the evils which were under consideration by Governor McGreevey’s Administration, which had been looking for a means to generate more revenue by imposing some form of new tax or fee on auto sales.The four-year registration will require prepayment of registration fees, but it does not increase fees for such vehicles. The four-year registration will apply to new passenger vehicles.The Motor Vehicle Commission is now in the process of determining exactly which vehicles will be covered, and how it will be determined whether a vehicle is “new.”Currently, it has been proposed that the four-year registration will be required for vehicles registered under registration codes 7, 8, and 15, but not 11.This means it will apply to cars, and to pickup trucks and vans which are registered as passenger vehicles, but not to pickup trucks and vans registered as commercial vehicles.MVC has proposed that a vehicle will be considered “new” only if it has never been titled in New Jersey or anywhere else.This creates some issue as to the treatment of vehicles with corrected or amended titles and vehicles titled to a dealership. There is a special provision for leased vehicles.Vehicle leases of less than three years will not be required to register for four years.Instead, leased vehicles will be required to register for a term of years sufficient to cover the length of the lease, up to a maximum of four years.For example, a 12-month lease would have to register for one year.An 18-month lease would be required to register for two years, and a 30-month lease would be required to register for three years. Cars sold to “rental companies” for rental use will not be covered, after February 1, 2005.However, it is not yet clear whether this exception will apply to vehicles titled and registered in a dealership’s name for loaner or rental use. In addition to the financial burden imposed on customers, the new four-year registration will complicate even further the already difficult task of calculating the appropriate registration fees.NJ CAR is currently working with MVC in an effort to ensure that the final rules and procedures are clear and create as few additional burdens as possible.Again, the acceleration of registration fees on new passenger vehicles will not take effect until October 1, 2004.