Buying a Car Out of State Quick Facts
- Obtain a vehicle history report as part of your research for the car you want to buy before committing to anything.
- Before agreeing to buy the car, obtain a full summary and breakdown of costs and fees from the dealer.
- Typically, you pay the taxes where you live and register the vehicle.
Buying a car from another state can be time-consuming, and you may wonder if it makes sense. Equipped with the correct information, you can save money and find the car you want. Let this be your concise guide in your journey to buying the perfect vehicle out of state.
- 8 Things to Know When Buying a Car Out of State
- Do I Have to Pay Sales Tax on a Car Bought Out of State?
- What Are the Disadvantages of Buying a Car Out of State?
8 Things to Know When Buying a Car Out of State
If you find the vehicle of your dreams in another state, just know car buying works differently than where you live. There are different factors to consider. Here’s how to navigate the process when buying a new, used, or classic car from a dealer or private seller.
1. Incentives
If buying a new or used car from a dealership, understand that the incentives in one state may look different in another. Confirm any and all incentives or rebates and get them in writing. When buying privately, you typically don’t see incentives.
2. Vehicle history report
If you’re buying a used vehicle, obtain the vehicle history report before committing to anything. You’ll want to know its history ahead of time. Dealers typically provide the report. You may ask for one from a private seller. If none is provided, request the license plate or vehicle identification number (VIN), and you can obtain one yourself from services like AutoCheck or Carfax. These reports detail useful information about accident history, maintenance intervals, mileage, and the number of car owners.
3. Car costs and fees
Before agreeing to buy the car, obtain a full summary and breakdown of costs and fees from the dealer. Ask for the window sticker or Monroney label, and check for the destination fee, all dealer fees, title, any extras, and taxes (see next entry for more). Make sure you negotiate and ask about anything you don’t need, like window tint or fabric protection. Always check the Kelley Blue Book value of the used vehicle you want before purchasing.
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4. Taxes
You can’t escape taxes when you purchase (or lease a car) in another state. Typically, you pay the taxes where you live and register the vehicle. You’ll need to take care of this step in your home state. However, some states also levy a vehicle use tax. Read up on that in our article: Things to Know About Taxes When Selling a Car. If you buy a car from a private owner, you need to pay the applicable sales tax. Your home state will collect tax with any other fees associated with the title transfer when you register the vehicle. Check the state where you plan to purchase and then where you plan to register the vehicle. It can get complicated, but a bit of research can help solve any issues you encounter. For example, if you buy a car elsewhere but register it in North Carolina, this state collects a 3% highway use tax and not state sales tax. However, if you paid car tax in another state, it’s within 90 days of the purchase and can provide proof of sale, you can apply the taxes you already paid against this highway use tax. If you purchase an older vehicle and don’t initially register the car, you will pay a property tax on the vehicle instead in North Carolina. For more information on title transfers, see our article How to Transfer a Car Title.
5. Inspection
Buying a manufacturer-certified pre-owned car from a dealership can provide peace of mind. Dealers often provide additional car warranties on used and certified pre-owned vehicles. If it’s not a certified pre-owned vehicle, make sure to get any used vehicle from a dealer or private owner inspected by a certified mechanic. While it’s more challenging to arrange, it can be done.
6. Emissions requirements
When you buy a vehicle in another state, find out if it meets emissions standards in the place where you will register the vehicle. New vehicles typically meet emissions standards. However, if you live in California but purchase the vehicle from another state, you must check if the vehicle meets smog standards. The California Air Resources Board, or CARB, says, “Vehicles that comply with California regulations have a Vehicle Emissions Information label on a visible location on the vehicle.” For any used vehicle acquired out of state, ask the seller to show proof that the vehicle passed inspection unless you’re buying a classic or clunker to fix up. Additionally, check emission and safety requirements in your state so you’ll be prepared when it’s in your possession and get it home.
7. Car Insurance
Before you drive off with any new or used vehicle, get insurance quotes and purchase a car insurance policy before you drive away.
8. Shipping
Bringing a car home can add more to your bottom line. Weigh all shipping and road trip costs before taking the leap to buy a car out of state.
PRO TIP: If you finance the vehicle, use our car loan calculator to determine your estimated monthly payment.
Do I Have to Pay Sales Tax on a Car Bought Out of State?
If the state where you register the vehicle has a sales tax (some states don’t), you will need to pay the sales tax as part of the registration process. Typically, it’s the same as the state’s sales tax on other goods. The good news is that you don’t have to pay sales tax in the state where you purchased the car if you don’t register it there.
RELATED: Buying a Car with Cash: Everything You Need to Know in 2024
What Are the Disadvantages of Buying a Car Out of State?
You may be buying a used car out of state because it’s exactly what you want or, perhaps, it is a much better price. Both are solid reasons. However, there are some potential downsides you should consider.
- Transporting it home: Unless the seller delivers it, no matter how you finally get your out-of-state purchase home, it will require extra time and money. In some cases, the cost of getting your vehicle home may negate any savings on the purchase price. Moreover, ensure that your current auto insurance extends to it during the transportation process.
- More complicated process: Unless you are using a secure marketplace like our Private Seller Exchange (PSX), you will need to negotiate the ins and outs of the buying process from two states.
- Remote sale: Out-of-state sales that are too far away to pick up the vehicle basically mean buying it sight unseen. Sure, you can study photos and even videos, but you can’t crawl around in it or take it on a test drive. For sure get a vehicle history report, and you should arrange for a professional car inspection service to go over it.
Buying a car from a state that does indeed salt their roads likely means the undercarriage has been coated to help resist rust. States that don’t salt their roads typically do not coat the undercarriage. I brought my Florida car (undercarriage not coated) to upstate NY for 4 winter months (work), exposing the undercarriage to constantly salted roads. And then when I went home to Florida the undercarriage proceeded to rust dramatically over the years. My car’s undercarriage has rusted more than any other car in Florida. I wish I never took it to NY for the winter. There’s likely more than one hypothetical theory in this situation, but my mechanic continues to have great difficulty with certain metal parts, like unscrewing the brake lines. (He has to soak the threading in rust release products for several days.)
If you live in a rust belt state, it makes sense to buy a used car from a part of the country that doesn’t salt the roads. Driving the car home can be a nice road trip experience. I’ve done it many times.