Car Buyer’s Guide: Buying a New or Used Car Out of State

If you’re on the hunt for a new or used car, then buying a car out of state can make a lot of sense. You can save money on the price of the car that you want in addition to finding the exact year, make, model, or trim level that’s not available to you locally. However, doing so could also lead to you spending more on taxes or fees that you might not be aware of. Here is a buyer’s guide to purchasing a car out of state.

Why would you want to purchase a car out of state?

Used cars sit on the sales lot at Autometrics Quality Used Cars on March 15, 2021 in El Cerrito, California
Used cars sit on the sales lot at Autometrics Quality Used Cars on March 15, 2021 in El Cerrito, California. | (Photo by Justin Sullivan/Getty Images)

Most car buyers seek cars out of state if the particular car that they are looking for is a rare model, trim level, or color. However, the price can also play a large factor. According to Car and Driver, different states use different standards to value vehicles and the cost can fluctuate depending on the region’s supply and demand.

For example, a used 2010 Honda Civic can sometimes cost more in California than it does in Oklahoma, considering there’s more of a demand for that type of car in that region. However, although you might save money on the Civic’s price in Oklahoma, that savings could be offset by the transportation costs, registration fees, or taxes also associated with the purchase.

Transportation costs, emissions, and registration

A sign outside the Department of Motor Vehicles office in Medford, New York on Jan. 23, 2021 alerts customers that reservations are required
A sign outside the Department of Motor Vehicles office in Medford, New York on Jan. 23, 2021, alerts customers that reservations are required. | (Photo by John Paraskevas/Newsday RM via Getty Images)

When buying a car out of state, it’s important to consider some of the fees that you can incur. If the car is located in a neighboring state, then you’ll need to factor in how much it will cost to drive it back. But if it’s located across the country, then you’ll need to factor in the extra money to get it shipped to you. That cost can vary, but it can often range between $500 to $1,000 depending on the location of both parties.

Another factor to consider is sales tax. Carfax notes that you should only pay for the sales tax in the state that you plan to register the car in, not in the state where you buy it from. However, certain state laws can vary, so make sure that you don’t end up paying double the sales tax.

It’s also important to make sure that the car passes your state’s emissions standards. For example, California has the strictest emissions laws in the country. If you live there, then you may need to ensure that the car meets the emissions requirements in all 50 states. There’s typically a sticker under the hood that tells you this information.

Buying an out-of-state car

 An aerial view of cars at the Fresh Auto car dealership.
An aerial view of cars at the Fresh Auto car dealership. | (Photo by Valery Sharifulin\TASS via Getty Images)

When you find an out-of-state car that you want to purchase, look up a vehicle history report through sites like Carfax or Autocheck. A vehicle history report can tell you whether or not the car has been in an accident, where it’s had repairs done, and what kind of maintenance work it has had in the past. With all these things considered, you can determine whether or not it’s a good value.

The next step is to have the vehicle checked out by a third-party mechanic. There are even mobile mechanics in the area that you can pay to check out the car for you, which will result in them sending you a full report about the car. If everything checks out, then you can decide how you’re going to purchase the car and transport it to your home state.

When the car is delivered, you will then need to have it registered in your state. Different states have different laws regarding how long you will have to register the car, so be sure to find that out. Upon registering the car, that’s when you will pay the sales tax and other fees.

Before registering the car, you may need to get insurance on it. Car and Driver recommends checking with your car insurance company to get a quote, however, shopping for a cheaper quote could be necessary at this time. Check your state’s laws regarding the types of coverage that it requires.

Buying a car out of state has a lot of positives if you can find the exact car that you’re looking for at the right price. However, it’s important to pay attention to any extra fees so that you know it’s worth the process.

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