Green Driver State Incentives in New Jersey

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New Jersey encourages residents to adopt environmentally cleaner driving habits by offering a number of green driver incentives. For more on perks that save you time and money—such as emissions test exemptions for electric cars and diesel-powered vehicles, state and federal tax incentives, high occupancy vehicle (HOV) lane access for hybrid electric vehicles, fuel-efficient auto insurance discounts, and more—keep reading.

New Jersey Emissions Test Exemptions for Green Vehicles

New Jersey exempts the following from vehicle emissions testing:

  • 100% electric-powered vehicles (EV).
  • Diesel-powered vehicles* that are either:
    • Required to be owner- or lessee-inspected (with a gross vehicle weight rating (GVWR) of 8,501 pounds to 17,999.).
    • Model-year 1996 and older commuter van, farmer or farm truck, plated passenger, not for profit, and governmental vehicles (not including buses).
    • Commuter van, farmer or farm truck, plated passenger, not for profit, and governmental vehicles with a GVWR 8,501 to 17,999 lbs. (not including buses).

*Heavy-duty vehicles (GVWR of 18,000 lbs. or more) must undergo an annual smoke emissions test.

If your vehicle requires an emissions test, find the nearest inspection station with the locator widget at the bottom of this page. For more on emissions inspection requirements, visit our page on NJ emissions testing.

Green Pass Discount for NJ E-ZPass Customers

The following vehicles qualify existing NJ E-ZPass Program customers for the Green Pass Discount—a 10% discount on off-peak rates* (regardless of the state of residency):

  • Vehicles with a miles per gallon rating of 45 MPG or better.
  • Vehicles that meet the California Super Low Emission Vehicle (SULEV) standard.

*Peak periods run Monday through Friday from 7 to 9 a.m. and 4:30 to 6:30 p.m., and all day Saturday and Sunday.

You may only enroll in one discount program per qualifying vehicle. During the required enrollment, you must also provide proof of eligibility. For a list of all requirements, consult the New Jersey Turnpike Authority’s Toll Rates page. Or to apply, simply call New Jersey E-ZPass at 1-888-AUTOTOLL ((888)288-6865).

HOV Lane Exemptions for Hybrid Electric Vehicles

Typically, only vans and cars with 3 people or more can use the high occupancy vehicle lane of the New Jersey Turnpike. However, if you drive a qualifying hybrid engine vehicle, you can use the stretch of HOV lane from Interchange 11 (in the Township of Woodbridge) to Interchange 14 (in the City of Newark), regardless of how many passengers you have in your car, during the following times:

  • Northbound (from Interchange 11 to 14)—Between 6 and 9 a.m., Monday through Friday.
  • Southbound (from Interchange 14 to 11)—Between 4 and 7 p.m., Monday through Friday.

To determine whether your hybrid electric vehicle qualifies for this HOV lane exemption, contact the New Jersey Turnpike Authority.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Some New Jersey auto insurance providers offer insurance discounts for having green driving habits and/or driving a fuel-efficient vehicle. Consult your car insurance company about potential green vehicle discounts such as:

  • Hybrid auto discounts.
  • Alternative fuel vehicle (AFV) discounts.
  • Economy car discounts.
  • Low-mileage discounts.
  • Pay as you drive discounts.

Owning or leasing a hybrid vehicle could get you up a 10% discount on car insurance. Many discounts can be applied to a policy so it's a good idea to compare auto insurance rates online.

Tax Incentives for NJ's Fuel-Efficient Drivers

New Jersey's Earth-conscious drivers might be eligible for state and federal tax breaks. Read the following sections for more.

Also, if you have questions regarding how to take advantage of tax incentives, consider consulting a tax professional, your local IRS Taxpayer Assistance Center, or the NJ Division of Taxation.

Low-Speed Vehicle (LSV) Inspection and State Sales Tax Exemptions

NJ exempts certain low-speed vehicles from state sales tax. Specifically, the tax exemption applies to LSVs certified by the Commissioner of the New Jersey Department of Environmental Protection (NJDEP).

Plus, the New Jersey Motor Vehicle Commission (MVC) does not require low-speed vehicles to undergo regular vehicle inspection. But you still must have your LSV titled, registered and insured in the state. For further details, refer to the NJ Motor Vehicle Commission's Low Speed Vehicles page.

Zero Emission Vehicle (ZEV) Sales and Use Tax Exemption

New Jersey exempts zero emissions vehicles from sales and use tax as an incentive to encourage drivers to go green. Specifically, this tax exemption applies to the sale, rental, or lease of new or used ZEVs on and after May 1, 2004.

ZEVs that Qualify for the Tax Exemption:

NJ exempts sales and use tax for vehicles that meet the zero emissions standards of the California Air Resources Board for the model year. The Commissioner of the New Jersey Department of Environmental Protection (DEP) certifies the following as ZEVs eligible for the tax exemption. Download the appropriate PDF by model year:

Partial zero emissions vehicles—such as the Toyota Prius and Honda Civic Hybrid—and labor or parts for qualified vehicles are not included in this exemption. For more details, consult the NJ Division of Taxation.

Propane Fuel Tax Reduction

According to the Alternative Fuels Data Center (AFDC), New Jersey charges a reduced tax rate on liquefied petroleum gas (propane) compared to what you'll pay on the sale or use of gasoline for powering a motor vehicle. This lower fuel tax will either cost you:

  • Half of the gasoline tax.
  • 5.25 cents per gallon.

Refer to the AFDC for more details.

Federal Tax Credits for Owners of Fuel-Efficient Cars

New car buyers of fuel-efficient vehicles might also qualify for federal tax credits offered by the government. Eligible alternative energy vehicles include:

  • Electric cars (EV.)
  • Hybrids.
  • Plug-in hybrids (PEV).
  • Diesels.
  • Alternative fuel vehicles (AFV).

For additional information on federal tax incentives, jump over to fueleconomy.gov.

Transportation & Climate Initiative of the Northeast and Mid-Atlantic States

The Transportation & Climate Initiative (TCI) is a collaboration of Northeast and Mid-Atlantic jurisdictions which aims to reduce greenhouse gas emissions that are related to transportation. New Jersey is part of the TCI with the goal to keep growing the clean energy economy and decrease oil dependence. You can learn about the details of the TCI on their website.

Keep Up with Current New Jersey Green Driver Incentives

With the goal of vastly improving the air quality, NJ also enlists a number of eco-friendly driving-related laws. These, along with the incentives below, are ever-evolving. Continue to stay informed by also consulting your local New Jersey Motor Vehicle Commission (MVC) branch and the Alternative Fuels Data Center.

Find a Nearby New Jersey Emissions Testing Station

Locate the closest NJ smog and emissions testing station with the widget below:

Please enter your ZIP code OR city and state abbreviation

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