How to Buy a Car from Another State

Jack R. Nerad | Nov 10, 2020

You have probably heard the old saying, "The grass is always greener on the other side of the fence." That truism is another way of saying that people are never satisfied and think others have it much better than they do. 

How to Buy a Car From Another State

Photo: Christian Wardlaw

That attitude extends to a lot of things – including the purchase of a car. If you look at the process objectively, buying a car isn't that difficult. But, despite the tremendous amount of choices the typical car buyer has nearby, some want to broaden their horizons by considering a car in another state. 

There's nothing inherently wrong with that idea but compared to buying a car within your state of residence, the process is more complicated and time-consuming. So, before you learn how to buy a car from another state, it is worthwhile to understand why you might want to do that and what the ramifications are.

Reasons to Buy a Car From Another State - Find the best car deals!

One reason to consider buying a car from another state rather than your home state is the opportunity to purchase a model that is not available locally. Maybe it is a new car with a combination of equipment and color that is not in stock in any dealership in your state. Or perhaps it is an antique, classic, or special-interest vehicle that is so rare that finding one just like it for sale in your state is just an impossibility.

You may also consider buying a car from another state to save money. There are regional differences in new-vehicle pricing and manufacturer incentives, so a car with no incentive available in your state might have a lower price and a rich incentive on it elsewhere. 

Another potential reason to consider an out-of-state car purchase revolves around the fact that some vehicles are popular in one market while they are less popular in another. This means you might be able to buy a model with four-wheel drive (4WD) in the Sunbelt cheaper than you could buy it in the Rockies. And this potential opportunity, unlike the first, applies equally to used vehicles. You might discover with an Internet search that a particular five-year-old sports car you crave is much cheaper in another state than it is in your local area. You might also believe that buying a car out of state is a way to steer around state and local taxes, which could potentially save you some money, but as you'll see, that is unlikely.

Finally, a third reason to consider buying a car from another state is that online buying services like Carvana, Vroom, and Shift are making it much easier to find out-of-state vehicles you might want to buy. They take the hassle out of the process as well. 

Think Before You Act - Find the best car deals!

One thing we can say without any hesitation is that buying a car out of state will be more complicated than buying it close to home. 

With that in mind, it is wise to be confident that buying a vehicle from out of state will be a better move for you than purchasing a vehicle from a local dealer or a private party in your state. If you live in a big urban area in a populous state, the odds are you'll be able to find a car that meets your expectations without venturing outside the state boundaries. That being the case, you would have to save quite a bit of money to justify the extra steps involved in buying it out of state.

On the other hand, if you seek a rare car, your only choice might be beyond your state lines. Or you might find a compelling deal on a vehicle that is halfway across the country whose combination of condition, equipment, and price make the extra effort worth it. Those are value judgments only you can make.

Obstacles to Overcome - Find the best car deals!

One of the most significant drawbacks of buying a car from another state is the distance between you and the vehicle. Should you live close to another state, crossing the state line is easier. But for many car buyers, the distance can be an obstacle. After all, we heartily advise seeing and test driving the vehicle before you buy it.

Scams are also a complication of buying a car long-distance. Fraud involving vehicle sales is a significant and growing problem. If a classified listing for a used car appears to offer the vehicle at an unbelievable bargain price, you are well-advised to believe the listing might be the front for a scam. You send money with the expectation that the car will be delivered to you, and you never hear from the seller/scam artist again. 

Distance also makes it more difficult to determine if the vehicle has the vehicle identification number that it was "born" with or if that number, and thus the car's history, is a fallacy. Similarly, it is hard to sniff out "title washing" in which a vehicle with a "flood damage" or "salvage" title has that important fact disguised.

Beyond that, getting through the paperwork involved in buying an out-of-state-car is typically more complicated than you'll encounter when purchasing one within your state. Each state has specific requirements for sales tax, registration, insurance, and emissions compliance. Just understanding all the steps you need to take can make the process more time-consuming than the typical in-state transaction.

Step-by-Step Guide to Buying an Out-of-State Car - Find the best car deals!

Vehicle Condition

Whether you are buying a showroom-new vehicle, a "basket case," or a parts car, understanding the vehicle's condition is the absolute key to getting a good deal. The distance can be a significant impediment to doing that. You might be reluctant to travel to look at the potential purchase for time or cost reasons, and you are probably very reluctant to do that repeatedly. That implies that you find a substitute for going to see and drive the car yourself.

One step is getting a vehicle history report. These reports are available from several different sources, and the two biggest suppliers are CarFax and AutoCheck, the latter of which is a subsidiary of credit report source Experian. A single AutoCheck report currently costs $24.99, while a CarFax report costs $39.99. 

A vehicle history report is a valuable source of information, but you shouldn't assume that if a car has a clean report, that's all you need to know. Instead, you should have the car inspected by a qualified mechanic in addition to reviewing the report. Arranging an inspection requires you to find a mechanic you trust in a place far from your home. A company called Lemon Squad says it can provide ASE-certified technicians to inspect vehicles nationwide, and other similar services exist. All that said, there is no substitute for seeing and driving the car yourself.

In addition to assessing whether or not the out-of-state vehicle is a sound car that you feel good about buying, you must also deal with the paperwork, fees, and taxes that are an integral part of buying a car.

Taxes and Registration

In most jurisdictions, you must pay sales tax on the car purchase to the state where you will register the car, most often the state where you live. A handful of states don't levy sales taxes on car purchases, but most of them do, and it is a significant part of their revenues. They want to collect those taxes, and the localities where you live — county and city — might have their own sales taxes they want to collect too. Typically, you will be required to pay the applicable state sales tax before you can register the vehicle. 

You will have to pay to get the car titled and registered in your home state, and you will likely have to produce a "bill of sale" and the transferred title to prove that you purchased the car legally. You must do this within the timeframe specified by your home state, which could be as little as 30 days. Depending upon your state's rules, the car might also have to pass an exhaust emissions test before you are allowed to register it.

Speaking of vehicle registration, depending upon regulations in the states involved in your vehicle purchase, you might need to obtain a temporary registration for the new vehicle simply to drive it home.

If you are buying the vehicle from a dealer, the dealer will likely help you with the details, like paying the sales tax to the proper authorities and getting the registration and titling completed. But if you are buying from a private party, it is all on you.

Insurance and Transport

Depending on your insurance carrier and the provisions of your existing car insurance policy, you may or may not need to get coverage for your new car immediately after purchase. Many insurance policies extend coverage to a new vehicle for a limited time if you notify your insurance company. But others do not offer this service, so you should be sure to establish whether you are covered. If you aren't, you are well-advised to get insurance coverage before you drive or transport the vehicle.

If you plan to drive the vehicle back to your home state, you must be sure that both insurance and, if needed, a temporary registration are in place. If you will have the vehicle shipped to your home, you'll have to find a shipper that will do the job for you. Many auto transport companies are listed on the Internet, and should you purchase from a dealer, they might be able to help you find a reliable company. You should be aware that shipping a car can be an expensive proposition. 

Towing the vehicle is another possibility with its own pluses and minuses. 

The Bottom Line - Find the best car deals!

If all this sounds like a hassle, we're not going to kid you — it can be a hassle. But the result can also be worth the effort. To buy a car from another state without tearing your hair out, don't skimp on the research and prior planning. If you understand the process and the steps you will have to complete, you won't be unpleasantly surprised. But if, on the other hand, you go out and buy a vehicle in another state sight-unseen without any consideration to taxes, registration, emissions, transport, and insurance, you could have a real mess on your hands.

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