Editorial Note: Commissions may be earned from partner links on A4 Auto Transport, but this will not affect our editor's opinions or assessments. Our content is based on hours of research and industry experience to help end-users.
Buying a car is not cheap. It may seem appealing to save money by buying out of state and avoiding sales tax. Before traveling to another state, it is necessary to analyze all aspects of the car-buying process. This article will go over the following aspects to help you decide if buying a car out of state is a smart idea for you:
A4 auto transport analyzes each of these factors to determine which state in the United States is best for buying a car. Consider the top states for initial cost, unexpected fees, sales tax, and vehicle insurance pricing to determine which state is best for buying a car.
Things to think about when buying a car out of state
If you can’t find the model you desire locally, you can buy a car from out of state. Maybe you found a great deal online. In either case, there are several benefits to buying a car out of state, but it may turn into a nightmare if you don’t do your research before making the purchase. Here are a few things to think about ahead of time.
Sales tax is often collected in the state where you register your new vehicle. Oregon, New Hampshire, Montana, Delaware, and Alaska do not charge sales tax, so you might register it there to save on sales tax unless your home state compels you to register it where you live. Check with your local DMV for information on their registration regulations.
You may need a temporary registration if you wish to drive the car back to your home state before registering it. When you buy a car from a dealer, they will normally help you with the registration paperwork.
If you buy from a private seller, you will almost certainly need to grasp the state’s criteria for temporary registration and apply for it yourself at the DMV.
Because each state has its own set of emissions regulations, a vehicle that fulfils one state’s minimum requirements may fail in another. The California Air Resources Board, for example, adopted strict emission rules, and several other states have subsequently followed suit.
Check to determine if the vehicle you want to buy is “California certified,” which means it was constructed to meet California smog regulations. This may look severe, but many cars in the other 49 states only meet federal pollution limits. If you’re exporting a car to California or migrating to California, this is an important consideration.
Transport a Car Home
If you intend to drive the car back to your home state, you must first get a temporary registration in order to drive the car. If you want to send it, you’ll need to do some research to find a reputable auto shipping company at a fair price. Many dealers have close relationships with auto transport companies.
Some auto insurance companies may allow you to transfer your previous car’s coverage to your new vehicle if you notify them within a certain time frame.
States with no sales tax on vehicles: New Hampshire
A single-digit sales tax may not appear to be much, but when buying anything worth thousands of dollars, such as a car, sales tax can be considerable. Having no sales tax may save you a lot of money upfront on your vehicle. Alaska, Delaware, Montana, New Hampshire, and Oregon are the only states without a sales tax in the United States. Colorado has the lowest non-zero sales tax, at a 2.9 percent rate.
States with the cheapest auto insurance: Maine
In many states, car insurance is required by law. Insurance rates vary based on your location as well as the type and model of your vehicle, so it’s vital to think about before buying a car. Maine has the lowest auto insurance premiums in the country.
Maine’s annual premiums are at $864, which is hundreds of dollars less than the national average of $1,318. Ohio and Idaho both have yearly auto insurance rates that are less than $1,000.Michigan’s auto insurance is so expensive that the state government is exploring on ways to cut costs.
The best state for initial costs: Florida
Florida is an excellent place to buy a used vehicle. In Florida, used cars are 10% less expensive than in the rest of the country. With Florida’s ageing population, many people abandon their cars each year due to to poor vision or other age-related issues. As a result, there is a plentiful supply of used automobiles on the Florida market, which keeps costs low. Furthermore, richer Florida residents sell their automobiles more frequently in order to get the most recent models.
California, on the other hand, has the highest initial car cost. California has an extremely high cost of living, and used car sales are much lower than in the rest of the country. As a result, their prices are significantly higher, and competition is strong.
Best states for unexpected fees
If you’re concerned about unexpected fees, Oregon is a great place to buy a car. According to The Balance, initial car-buying costs are often less than $150, which is a fraction of what is paid in other jurisdictions. Alaska and New Hampshire are two other fee-friendly states. They usually do not charge more than $360.
However, some states have hefty fees that might completely wipe out your money. In Alabama, you won’t have much success avoiding unexpected fees. The unexpected fees in this state are significantly higher than the rest of the country. The average unexpected fee is around $2313. That’s over 18 times what you’d pay in Oregon, and 14% of the average car price.
Overall best state to buy a car
New Hampshire is the overall cheapest state to buy a car.
The unexpected costs while buying a car in New Hampshire are fairly low. You can save money up front because there are no state sales taxes and very minor registration expenses. Insurance premiums in the state are also extremely low, at around $941 per year. The average annual cost of automobile ownership in New Hampshire is around $2,691.