Many people assume they can purchase cars in states that have no sales taxes in order to save money, but that is not the way things work, unfortunately. You may even think buying a car from another state is a way to get around the states taxes and local taxes, potentially saving you a bit of money, but as you will see, this is unlikely. While it may sound tempting to purchase a car from a state that has low or no sales taxes, you are not going to save any money in this regard, as you have to pay sales taxes to your home state.
Buying a vehicle from another state may save money under the right circumstances, and may be the best way to obtain the model you are looking for. Buying a vehicle long-distance from the dealership may help you get the exact car you are looking for.
Crossing state lines to purchase a vehicle may help you land a better deal, but the process may be different than buying the car in your home state. If a purchase is nationwide, though, shipping a vehicle back to you could wipe out any potential savings you would have from buying a car in another state. If you are only shipping it over a state line, driving a vehicle can be cheaper than shipping.
If your vehicle is nowhere near, then you might have to truck it, adding even more costs that could wipe out any potential savings. If you prefer to avoid dealing with the hassle of driving your car from another state back to your home state, shipping the car may be an option as well – but this comes with extra costs as well. You can expect to pay between $500 and $1,700 in fees, depending on where you are shipping a vehicle from out of state.
Note that when buying a car out of state, you generally have to pay sales taxes to the state that registers the vehicle, rather than where you purchased it. Usually, you will be required to pay applicable state sales taxes before you are allowed to register your vehicle.
You might have to get a temporary registration from the state you purchased your car in if you are planning on driving it back to your home state. Speaking of registration for vehicles, depending on regulations from the states involved in the purchase of your car, you might have to get a temporary registration for the vehicle just to get it back home.
You will need to pay for a vehicle title and registration from the state where the car is located, and you may have to show both the Bill of Sale and a Transferable Title in order to show you purchased the vehicle legally. In many states, you do not pay sales tax if you are taking the vehicle right back to a different state, you just pay any applicable fees when you register the vehicle and file a title claim in the state where you live.
Buying the vehicle in a different state is a more complex process, which requires researching the sales tax, registration, and emissions requirements of your state. In addition to assessing if an out-of-state car is a safe vehicle you are comfortable with purchasing, you must also manage paperwork, fees, and taxes, which are integral parts of purchasing a vehicle. Whether you live near a bordering state and you would like to have additional options, or you are considering purchasing the vehicle online and traveling to a different state to pick it up, it is important to know what you might encounter once you get your new car back home.
Sometimes, you might find that you need a very specific vehicle, one that just so happens not to be available in your home state. According to Credit Karma, you might consider buying from a dealership or an owner in a different state if you are looking for a vintage or rare make and model, cannot find the features you need from a local dealer, or found a good deal with a seller in a different state. Because the Internet makes the distance between buyer and seller much smaller, you might find that you see the best vehicle for your budget and needs on eBay or Craigslist, and that car might have the seller located several states away.
If you just cannot find the right vehicle locally, buying one from a dealership in another state is your best bet. The least expensive state to buy a car also depends on the particular vehicle that you are looking for.
Many buyers will drive the next state down in order to get the biggest savings when buying a vehicle. If a car is unique enough, or a deal is good enough, many will go ahead and buy the car from another state.
Another potential reason for considering an out-of-state car purchase revolves around the fact that certain vehicles are popular in one market and not so much in another. A third reason to consider purchasing a vehicle from a different state is that online shopping services such as Carvana, Vroom, and Shift are making it a lot easier to find vehicles out-of-state that you may be interested in purchasing.
Shipping your vehicle could be an excellent option when it comes to the costs involved in moving your vehicle from one state to another. The costs of shipping a vehicle can be very different, with personal factors that will impact the amount of money that you will pay for vehicle shipping. For the most part, vehicle transportation costs will vary between $450 to $1,300 for one vehicle, or around $0.75 per mile to nearby states, and down to $0.45 per mile to travel from one part of the country to the other.
If you are buying a used car from a private party, you might need to pay taxes over the trade-in value at registration. If you are planning on driving your vehicle back to your home state, you will need to obtain temporary registration first so that the vehicle is allowed to be driven.