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How to buy a car out-of-state

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Buying a car out of state can be a great opportunity to get a good deal on a vehicle or to purchase a car that’s unavailable in your area. However, doing so involves some additional steps that may differ from your previous car-buying experiences. Buying a car in a different state requires careful planning and a thorough understanding of what to expect in order for the process to be smooth and successful. This article may provide helpful guidance and insight into expectations.

Can you buy a car from another state?

The short answer: yes. In today’s digital world, buying a car out of state has become increasingly easy, with websites like Carvana, CarMax and TrueCar providing drivers with virtually endless access to compare and shop vehicles that suit your needs. There are even apps that you can use to find and purchase a vehicle from a smartphone or tablet.

While there are no restrictions to prevent you from buying a car out-of-state, doing so requires taking some additional steps to ensure you remain compliant with state taxes, registration and environmental guidelines.

Why buy a car out-of-state?

You might be considering purchasing a car out of state for a few reasons, including:

  • Availability: If you’re looking for a specific make or model, you may not be able to find the car you want as easily by limiting your search to in-state locations. By expanding your search criteria, you might find the car you want at the right price.
  • Deals: Some dealerships run promotions outside your area that you can take advantage of by traveling to that state.
  • Savings: Outside of dealership promotions, you may also be able to save money on your vehicle purchase by choosing one in a different state, due to the fact that car valuations are partly based on geographical location.

As with any purchasing decision, there are pros and cons associated with buying a car in a different state. The following table outlines some of the advantages and disadvantages that may come with buying a car out-of-state:

ProsCons
You’ll be better able to find the exact year, make, and model car you want.The process is more complex and time-consuming than buying a car in-state.
Cars in other states may be less expensive, depending on their location.Coordinating vehicle transport for cars located in far-away areas can be challenging and costly.
You may be able to take advantage of dealership promotions in other areas.You may need a temporary registration in order to drive the vehicle home if it’s in a nearby state.
You’ll have more variety and price flexibility by expanding your search criteria to other states.Depending on the car’s emissions results, it may not be compliant with your state’s guidelines.

How to buy a car out-of-state

Buying a car out-of-state does require you to take additional steps that aren’t typically part of the process when making an in-state purchase. While all vehicle purchases require research before sealing the deal, out-of-state car transactions in particular involve much more investigative work. 

When working in-state, you may be able to get a full vehicle report from the used car dealer from which you are purchasing without incurring any additional charges. For out-of-state purchases — especially when dealing with private sellers — it’s in your best interest to pay for a Carfax or similar report to evaluate the vehicle’s history.

In addition, every state has its own tax, registration and emissions regulations to which all vehicles must adhere. If you live in a state that requires emissions testing for registration, this can delay the process. Particularly if you live in California, you’ll need to provide proof that the car meets the California Air Resources Board’s guidelines.

Tax and registration fees will also vary depending on where you live, so be sure to ask your local motor vehicle department what the costs are for the vehicle you’re planning to purchase. Below, our team has put together a detailed step-by-step guide with instructions outlining the steps associated with an out-of-state vehicle purchase.

Step 1: Do your research

Research is essential for buying a car out-of-state. It’s worth it to pay for a full vehicle history report. This report will tell you about any accidents the vehicle has been involved in, as well as any liens that may exist. If the car does have a lien listed on its report, this will need to be resolved before you bring the car across state lines. Additionally, the report will show if there is an open recall on the vehicle, which you can have the seller address before making a final purchase.

Step 2: Get an inspection

Whether you’re purchasing the car from a dealership or a private seller, it’s typically recommended to call a local mechanic to perform a thorough inspection of the vehicle. If the state you’re purchasing from is nearby, you can schedule the inspection for during your test drive. Cross-country out-of-state purchases may require you to have the seller take the vehicle to the mechanic of your choice in order to get the inspection done.

If you’re purchasing from an online dealer, you might be able to take advantage of their free return policy if they have one. That would potentially allow you to buy the car, take it for inspection, and if it comes back unsatisfactory, you can begin the return process. Just be sure to review the terms and conditions on the website prior to making the purchase to avoid getting into a bind.

Step 3: Pay your taxes

Depending on where you live, you may or may not be required to pay sales tax. If your state requires it, you’ll need to pay taxes on the vehicle prior to registering it. When buying from an out-of-state dealer, your sales rep can assist you in putting together the appropriate paperwork. 

For private sales, however, you’ll likely need to prepare these documents yourself. To get assistance with this, contact your Department of Motor Vehicles (DMV) to find out exactly what paperwork is required in order to pay taxes on the car.

Step 4: State compliance

Speaking of the DMV, you’ll need to pay a visit to their website to find out what the state requirements are for safety, emissions, and odometer inspections. Cross-reference your state requirements with the information you gained through the vehicle history report and mechanic inspection to ensure the vehicle is compliant. 

After buying a car out-of-state, you’ll need to take it to the DMV to file the appropriate paperwork for title and registration. Most times, you can download and print these materials ahead of time to reduce the chance of experiencing any unnecessary delays.

Step 5: California considerations

California has some of the strictest guidelines for emission standards in the United States. Every vehicle in the state must adhere to these standards in order to obtain registration and title. Here again, the information gained through the vehicle history report and mechanic inspection can help you understand whether or not the car you plan to purchase meets these requirements. If it doesn’t, vehicle modifications may be necessary prior to getting it registered so that it meets compliance standards.

It’s important for buyers to know that California isn’t the only state that adheres to these standards. Be sure you reference your state requirements to ensure the smoothest process when buying a car from a different state.

Step 6: Title & registration

Along with the purchase of your out-of-state vehicle, you’ll need to pay for a new title and registration fees with your state. Each state has different requirements for how much time you have until vehicle registration becomes mandatory. It may be as little as 30 days or as long as three months, depending on your state of residence. 

Likewise, titling regulations are different by state. Particularly when dealing with salvaged titles, it’s important to make sure your vehicle’s title meets the guidelines for your specific location. Ensuring a clean and clear title is essential, as this can impact your ability to finance and insure the car.

Step 7: Insuring your car

Depending on your current insurance carrier’s policies, you may be able to insure your new vehicle through your existing provider. In other cases, you may be able to keep coverage for a grace period until you’re able to find a provider that is able to insure the vehicle. 

It’s important to contact your insurance provider and understand what options are available prior to making the purchase so you can prevent lapses in coverage. Remember, getting pulled over without insurance coverage can result in a hefty fine, or worse.

Tax considerations

When buying a car out-of-state, the purchaser pays taxes to the state in which the vehicle is garaged. Some states, like Delaware, don’t apply taxes to such purchases. So, if you’re a Delaware resident buying a car from New Jersey, you won’t have to pay any taxes when you bring the vehicle home. For other states that do apply taxes to vehicle transactions, you’ll have to pay taxes only to your home state.

State’s taxes differ, so be sure to verify what the taxes are in your state for vehicle purchases. While you may get a great deal on an out-of-state car, you may end up paying a comparable price if the taxes in your home state are particularly high.

The takeaway

  • Buying a car out-of-state is possible, but requires taking additional steps to ensure a smooth buying experience.
  • Online car-buying has grown in popularity and makes it easier for drivers to make purchases across state lines.
  • Different states have different regulations when it comes to taxes, titling, registration and emissions tests, so be sure to thoroughly research these prior to making a purchase.
  • Be sure to obtain a full vehicle history report and schedule a mechanic’s inspection prior to buying the car.

Conclusion

Buying a car out-of-state can be a great way to save money or find a specific vehicle that may not be available in your region. Before making such a purchase, it’s important to understand how your state regulations differ to ensure your new car is in compliance. Having a full vehicle history report and mechanic’s inspection before buying can be tremendously helpful to ensuring the whole process is smooth. By doing your homework and planning ahead, you can ensure a successful buying process and bring your new vehicle home.

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