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When shopping for a car, there are many costs to consider aside from the price of the car. Other fees like the documentation fee, DMV registration fees, and taxes are can increase the overall cost of the car. It’s important to budget for this added cost and know that it can vary depending on the state that you buy the car in. As such, here are the best and worst states to purchase a car based on its initial cost and additional fees.

The best state to buy a used car

A new dealership selling Chevy products.
New dealership | Getty Images

The best state to buy a used car this year is Florida. According to The Balance, used car prices in Florida are typically 10% cheaper than the national average due to its aging population. Considering 20.5% of the population is age 65 or older, elderly drivers give up their cars more frequently whether it’s due to death, impaired driving abilities, or poor eyesight. On the other end of the Florida population are high-income individuals that tend to sell used or older cars quickly in order to maintain their high-end lifestyle.

The worst state to buy a used car

On the other coast of the U.S., car owners in California tend to keep their cars for longer periods of time. The Balance notes that this long-term ownership is likely due to the high cost of living and unemployment rates in that state. As you can imagine, this leads to a highly competitive used car market for buyers that’s only fortified by high sales tax rates and gas prices.

The best state for avoiding high car-buying fees

If you’re looking to purchase a car and avoid some of those aforementioned additional fees, then Oregon is a great place to shop. The maximum amount for processing fees in that state is $115 if the dealer doesn’t use an integrator, but it can go up to $150 if the dealer does use one.

As far as the actual documentation fee, which is the fee that the dealer charges to file the DMV documents, California has the lowest charge at $85, according to Your Auto Advocate.

The worst state for avoiding low car-buying fees

Toyota Camry models at Stevens Creek Toyota dealership in San Jose, California
2019 Toyota Camry models | Yichuan Cao/NurPhoto via Getty Images

If you want to avoid the high cost of fees when purchasing a car, then you may want to avoid buying one in Alabama. Buyers in this state typically pay around $2,313 in fees, followed by other high-cost states like Arizona, California, and Tennessee. In those states, buyers can expect to pay an average of $2,000 in additional fees when buying a car.

Speaking of Alabama, this state also has one of the highest documentation fees in the U.S. coming in at $485. However, that’s cheap compared to the doc fees in other states like Virginia and North Carolina, which charge $599 for their documentation fees.

Do your research when buying out of state

If you’re planning to purchase a new or used car out of state, it’s important to research all of the additional taxes and fees aside from the cost of the car. Depending on which state you buy the car from, it could be cheaper to purchase it in your home state. Of course, the ongoing inventory shortage isn’t helping, but remember to cast a wide net to see what options are available to you.


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