Cheapest State to Buy a Car: Your guide to buying cars from out of state

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Let’s be honest, buying a car is not cheap. That’s why many people are opting to buy a car from out of state. They might be wondering how to ship a car to another state. Believe it or not, but it’s cheaper to own a car in states like Florida or New Hampshire, compared to New York or California due to the fact that some states slap on additional sales taxes and other fees.

Benefits of buying a car out of state

Before we let you in on the cheapest states to buy a car, you should know that there are certain advantages and disadvantages to buying a car out of state. Let’s delve into them to see if it’s the right decision for you.

There are several states that offer cheaper options for buying cars, so be sure not to limit yourself by only looking at one or two states. You have an entire country to search – don’t restrict your search to your home state.

Since car valuation factors include the location of the car, you are quite likely to find the same model at a lower sales price in a different state than the price your local car dealer is asking. 

Expanding your search means that you can also compare more prices or find ways to save more money. 

Pro Tip: Remember, you could save even more money by buying a car out of state from:

Dealers

Private owners (avoid being scammed by a private seller!)

COPART salvage car auctions

Insurance Auto Auctions

Mannheim Auto Auctions

Police Auto Auctions

There is a misconception that salve or auction cars are all damaged beyond repair. That’s not always the case. Many auctions include vehicles that are in perfect condition after they had been repossessed, used in crimes, stolen, or put out of service by fleets. It’s a matter of doing due diligence and ensuring that you inspect the car properly. Even if you don’t intend on driving the car home, do try to at least do an in-person pre-purchase inspection

Do however take into consideration the estimated sales tax.   

As you can imagine, buying a car from out of state can also be a tad complicated. You have to understand the state requirements, and take into consideration the costs of bringing the car home. 

What you should know before buying a car out of state

Buying a car from out of state is also great if you can’t find the model you’re looking for locally. Perhaps you found a great deal online. Either way, there are many benefits to buying a car out of state, but it can become a nightmare if you don’t do your research prior to finalizing the purchase. Things to consider would include:

  • Insurance – Some auto insurance companies allow you to extend the coverage of your current car to your new car, provided you notify them within a certain timeframe. 
  • Emissions – Your car may pass the emissions standards in the state from which it originates, but it might fail in your home state. Since California has the most stringent smog regulations, it will be safe to buy a car that is “California certified”. This may seem quite extreme, but many cars only meet federal emission rules of the other 49 states. Pay special attention to this point if you’re shipping a car to California or even if you’re moving to California.
  • Registration – Driving the new car home? You might need to register it first. Dealers can help you with the registration documentation, but if you’re buying the car from a private seller, you need to verify the requirements with your local DMV, and probably apply for temporary registration. The DMV will require a vehicle identification number (VIN) verification to ensure the car has not been stolen.
  • And sales tax – Sales tax is typically payable in the state where you register your new car. Oregon, New Hampshire, Montana, Delaware and Alaska don’t charge sales tax, so you could register it there to save on sales tax, unless your home state requires that you register it where you live. Check with your local DMV on the details of their registration policy. 
  • Transporting the car home – You would need a temporary registration in order to drive the car back home. Alternatively, you could ship it through a reputable auto transportation company. Many dealers have close relationships with shipping companies.
cheapest states to buy a car

Cheapest States to Buy a Car

Now that you know what to look for, let’s talk about the actual task of finding your car. Shopping around will definitely benefit you in the end, so don’t rush into something. 

Pro Tip: When you have a specific model in mind, consider where it is made.

For example –

  • Toyota Camrys: Kentucky, where they are built, is the cheapest state to buy this car.
  • Honda CR-Vs: Delaware and Maine, where they are built, are the cheapest state to buy this car.
  • Ford F-150s: Rhode Island or Missouri, where they are built, are the cheapest state to buy this car.

Remember that buying a car is about more than just the sticker price. There are associated insurance and maintenance fees to take into consideration, too. Fees differ by state, but New Hampshire is one of the most affordable. Why?

Why New Hampshire is one of the cheapest states to buy a car:

  • There’s no sales tax when you buy a car, so you save a lot of money upfront. This also applies to Alaska, Montana, Delaware and Oregon. 
  • There’s a one-time initial fee of $25. 
  • Insurance is quite affordable. 
  • Repair costs are reasonable. 

North Carolina is one of the cheapest states to buy a car:  

  • Sales tax is only 3% which is low compared to most other states. 
  • Title and registration fees are relatively inexpensive.
  • Insurance is reasonable. 
  • Maintenance and upkeep costs are affordable. 

Why Missouri is one of the cheapest states to buy a car:

  • Initial purchase fees are average.
  • Gas prices are amongst the cheapest.
  • Most car-related expenses (ownership, transportation, registration, title fees, and insurance) are cheaper than in other states.

Why Virginia is one of the cheapest states to buy a car:

  • Initial fees such as sticker prices, title and registration fees are cheaper than some other states.
  • Gas prices and insurance premiums are lower than in some states. 
  • Repair costs are expensive, so it costs more to own a car in Virginia.

Why Ohio is one of the cheapest states to buy a car:

  • Car sales tax rate is 5.75%, which is slightly higher than other states. 
  • Insurance premiums are the second lowest in the country. 
  • Gas prices and maintenance fees are lower than most states. 

Why Wisconsin is one of the cheapest states to buy a car:

  • Purchase prices are higher than in North Carolina and Missouri. 
  • Car ownership costs are the second lowest in the U.S. 
  • Insurance premiums are lower than in most states.
  • Gas prices are lower. 
  • Maintenance fees are more affordable than in many states.
cheapest states to buy a car

Cheapest States to Buy a Car: Overall Winner!

Overall, New Hampshire is the cheapest state to buy a car, since registration fees are low and sales tax non-existent. 

Florida is the second cheapest state to buy a car, and the state has a wonderful inventory. In fact, cars cost around ten percent less than the average. Unfortunately, title and registration fees and tax are higher in Florida than in most other states.

 As you can see, there are many considerations when it comes to buying a car out of state. Just be sure that you consider all the costs and that you inspect the car properly before signing on the dotted like. 

Do you buy vehicles from out of state? What was the cheapest state to buy a car in your experience?