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One Month to Go Before Four-Year Registrations Become Law

Sep 02, 2004

The already difficult task of calculating motor vehicle registration fees is going to become even more complicated beginning next month, when the new “four-year-registration” law takes effect.The new State budget approved this summer included this revenue-raising gimmick, which requires new car buyers to pay up front for four years of annual registration fees.The measure was designed to produce additional revenue in the first year, and to reduce processing costs for renewals in later years. The effective date for the four-year-registration law, October 1, 2004, is now less than a month away.Even though the effective date is fast approaching, the Motor Vehicle Commission has not yet issued any formal regulations or official instruction as to how the new rule will be administered.However, MVC has been very cooperative in working with NJ CAR during the implementation process, keeping NJ CAR staff advised of progress and eliciting our comments and suggestions throughout the process. Following is a summary of what we now know about the new four-year registration: ·The four-year registration will apply to new vehicles sold on October 1, 2004 and after.It will not apply to vehicles sold prior to October 1, even if the registration paperwork for these vehicles is not processed until after the October 1. ·The four-year registration will apply to nonpassenger vehicles.This includes motor 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 cars, pickup trucks and vans registered as commercial vehicles. ·The four-year registration applies only to new vehicles.A vehicle will be considered “new” only if it has never been titled, in New Jersey or anywhere else. ·The four-year registration will NOT apply when the purchaser transfers tags from a prior vehicle.This will provide an incentive for more purchasers to transfer their existing registration to their new vehicle. ·There is a special provision for leased vehicles when the lease is for a term of less than four years.Vehicles with 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. ·Specialty Plates— Customers who want specialty plates will be charged for the four-year registration, plus the $50 initial specialty-plate fee, plus three years of specialty-plate renewal fees (or, for leases, such amount as would finish the term, if less than four years total). ·Senior Citizen’s Discount— If the customer turns 65 or older before or during the month of the purchase, the senior citizen discount will apply for the entire four-year term.If the customer turns 65 during the four-year term, the discount will be prorated in 12-month increments only.Thus, if a customer who is 63 years old purchases a vehicle, they would receive the senior citizen discount for the third and fourth years only. ·PAAD and handicapped discounts will apply for the entire four-year term. ·There will be no refunds of the four-year registration fees, except in cases where the sale is not consummated and the title and registration were processed in error. Cars sold to “rental companies” for rental use will not be covered.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. 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.When the rules governing calculation of the four-year registration fee are finalized, NJ CAR will incorporate the rules into a form worksheet which dealerships can use to calculate the fee. On a positive note, the MVC has advised that beginning October 1, the initial registration period for commercial vehicles registered under Code 15 will be for a “full” 12-month period.Currently, the initial registration period for these commercial vehicles is only 11 months, even though a full 12-month fee is charged.