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.
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 brining 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.
Compare loans to buy a car across state lines
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Benefits of buying out of state
- Wider selection. If your 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 to 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 dealers 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
Learn more about interstate car purchases by reading these answers to common questions.
Image source: Shutterstock
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