While buying a car over state lines can be complicated, it’s not impossible. There are several extra steps you need to take, especially after you purchase your vehicle. And it might cost you more than buying closer to home.
Can I buy a car in another state?
Yes, you can buy a car in another state. However, it’s not as simple as buying a car closer to home and might cost more. You need to make sure you pay your state’s sales tax, register it yourself and possibly get it inspected for environmental and safety standards.
How to buy a car in a different state in 5 steps
The exact car buying process might vary depending on your lender, dealer or private seller. However, most buyers need to follow these five steps when they purchase a car across state lines.
Step 1. Inspect the car
The Internet is invaluable when you’re researching cars in other states. While it’s not the same as kicking the tires, doing some research online can help you find useful information about a car’s condition, features, service history and warranty.
You may be tempted to buy a car sight unseen, but that can be risky. Even if you trust the seller, you won’t know for sure the condition of the car and if you’re getting a fair price. You could end up paying for unexpected repairs.
Test driving a car you want to buy is ideal, if you can make that arrangement. Sometimes you can tell if there are any issues with the body or interior that was left out of its description. Anytime you buy a used car it’s a good idea to get an inspection from a licensed mechanic to determine if there are any issues under the hood.
Step 2: Get a vehicle background checks
When you buy a used car from a seller out of state, conduct a full check of the vehicle’s history just as you would when buying from someone just down the road. This allows you to determine:
- Whether the car has been damaged.
- Whether the car is listed as stolen.
- Whether the car is leased or has a loan taken out on it.
- If the VIN number and registration are legit.
- The sales history.
- The accuracy of the odometer.
There are specialist companies that conduct a full car history checks. You can also check out the car history through the transportation department of the state you’re buying the car from.
Step 3: Purchase the car
Once you’re sure that the car you’re buying is what you need, you’re ready to apply for financing or go down to the dealer to buy the car. You can finance the car directly through the dealership or through an online lender. Online lenders might be a better choice in this situation since some might be able to cover more than just the vehicle’s cost.
Step 4: Register your new car
Your car’s registration and title transfer depends on where you buy the car. Dealers will issue temporary registration until you visit the DMV in your state. Though a private seller won’t. You’ll need to transfer the bill of sale to your name before you can register your car. You could even apply for temporary registration before you pick the car up to drive away legally.
Laws are different across states, so check out the laws with the DMV before bringing your car home. Some states, like California, require your car pass an emissions test to be driven in that state. You can include this in your mechanic’s inspection.
Step 5: Get your new car home
You have a few different options when it comes to bringing your car from one state to another:
- Drive it back yourself. If you don’t mind a road trip, you can drive or fly to pick the car up and then drive it home. Just remember to factor the costs of traveling into your budget.
- Have someone else drive it back. Don’t have the time to pick the car up yourself? You may want to ask a friend or relative to do the job for you. They may be willing, but you’ll want to cover their expenses.
- Have it shipped. There are numerous carriers that specialize in shipping cars across the US. Look around for a reputable company by checking online reviews and requesting recommendations. Compare quotes from multiple companies before choosing one.
- Ask the seller to drop it off. In some cases, it may be possible to negotiate for the seller to deliver the car to your door. You’ll need to cover the cost of fuel, the seller’s transport home and compensate them for their time.
Can I get a loan to buy a car in another state?
Although each lender will have different rules about how the loan is applied, in most cases, you’ll likely be able to use a car or personal loan to purchase a car in a different state.
However, extra expenses like the cost of bringing it home and extra taxes likely won’t be covered by the loan so make sure you can pay out of pocket before signing up.
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Benefits of buying out of state
- Wider selection. If you can’t find your dream car in your state, buying out of state widens your options.
- Potentially lower prices. The value of a car is often determined by where it’s located, meaning you might find the same car for a lower price in another state.
- Rare models. Buying out of state can help you find rare models if you’re interested in buying an exotic car.
Drawbacks to buying a car in another state
- Higher cost. Buying a car across state lines means
- Extra time and effort. You need to complete extra paperwork and might need to have your car inspected to
- Loan might not cover everything. There are several costs you might have to cover out-of-pocket, including inspections and registration fees.
Watch out for extra costs
Buying a car out of state? You might have to pay extra to:
- Get your new car home. You can choose to pick up the car yourself or have it shipped to your location, but either way, you’ll need to account for the price of getting your car when setting your budget.
- Transfer the title and registration. When you bring the car to your state, you’ll have to pay to have the title and registration transferred to you. Some states give a few as 30 days to make this transfer.
- Be covered by insurance. A new car could come with an increase in your insurance rates. Each state has its own minimum liability, so make sure your car is covered before transporting it.
- Get it inspected. Some states like California require you to get your car inspected for environmental or safety standards.
- Follow state taxes. You might need to pay your state taxes if you don’t buy your car at a dealer. Depending on the cost of your vehicle, this may be hundreds or thousands of dollars — not usually an amount most people have on hand.
Will I need to pay sales tax on an out-of-state car purchase?
Yes. You need to pay the sales tax for your home state since this is where you’ll be registering the car. If you’re going through a dealership, they may handle the process for you.
Keep records of the tax information to show to your DMV. If you’re buying from a private seller, you’ll need to calculate your own sales tax and pay the appropriate state agency before you can register your car.
Buying from a dealership vs. private owner in a different state
Buying a car out of state from a dealership and private owner both are more complicated than buying in-state.
However, buying from a private seller might involve even more work on your part. For example, you need to calculate and figure out where to pay your state’s sales tax when buying from a private lender. Private party auto loans also typically have less financing options.
Unless you have a specific car in mind, buying from a dealership might be less time-consuming and open you up to more options.
When you find the perfect car, you don’t have to let the fact that it’s in a different state stop you from sealing the deal. There are plenty of ways for you to bring your car home, and you can easily compare your options to find one that suits your needs so you can drive off with the car you really want.
Visit our guide to car loans to learn more about your auto financing options.
Frequently asked questions
Do I have to pay sales tax twice if I buy out of state?
No, you only have to pay the sales tax in the state where you register the car — your state.
Can I use a loan to pay for sales tax?
It depends. You may be able to have your lender factor the sales tax into the total amount of your loan. If you’re paying for your car outright rather than financing it, you may be able to use a personal loan to cover the sales tax, but this will depend on your lender.
How else can I make sure I’m buying a good-quality vehicle?
Make sure to ask the previous owner for a copy of the car’s service records. This will help you determine whether the vehicle has been properly looked after and what sort of maintenance you might expect when you own it.
Do all states require emissions tests?
No. Each state has its own emissions requirements. Some cars may pass in one state but fail to pass in another, so do your research before completing the purchase.
Where can I find out more information about registering my car?
You should contact your state’s DMV and the DMV in the state where you’re buying your car.
Image source: Shutterstock
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