Thanks to the online marketplace and the ability to quickly and easily communicate with dealerships all across the United States, buying a car out of state has never been easier. However, if you’re not careful, it can cost a fortune. From transfer fees to emission restrictions and new registrations, there are plenty of potential pitfalls. In this article, we’re going to go over how to buy a car out of state, so that you can avoid the most common mistakes and end up driving the car of your dreams.
Why Should You Buy a Vehicle Out of State?
To start, why would you even want to buy an out-of-state car in the first place?
Most of the time, it boils down to two reasons: 1) there’s no inventory for that particular car in your state, or 2) it’s cheaper.
Reason #1: More Inventory to Choose From
Due to supply chain issues, used cars are in high demand. If there’s no inventory for the car that you want in your state, you – unfortunately – have very few options. Maybe you’ve spent some time combing through Facebook Marketplace and Craigslist and you haven’t come up with anything in your area that interests you, then it’s time to expand your search.
Reason #2: Buying a Car Out of State is Cheaper
However, if you’re planning on buying a car from another state because it’s cheaper, there are definitely some costs to consider when you’re calculating the total:
- Temporary registration for the state you’re buying the car from ($10-$50)
- Registration for the state where you live ($100-$300)
- Sales tax for the state where you live (3%-8% of the car’s sales price)
- E-Check or applicable safety standards certificate ($20)
- If you don’t plan on driving it back: out of state car shipping ($500-$1000 average rate)
- If you do plan on driving it back: flight costs to get to the car and gas.
These price estimates will vary based on what state you’re transferring the car to (and from which state you’re transferring the car).
As you can see, costs to buy a car out of state can add up. If you want to get a more detailed idea of how much it would cost in total, contact a representative of your local DMV.
Steps to Buying a Car Out of State
1. Avoid Being Scammed
Some car seekers who buy out of state end up buying a car that doesn’t actually exist – or it’s in much worse condition than it appeared to be in the photos. Before we even really get started on how to buy a car out of state, there are a few things you can do to make sure that you don’t end up getting scammed:
- Only deal with reputable dealerships. If you’re buying a car at a Honda dealership in Pennsylvania with hundreds of good reviews, you can rest assured that you’re probably not going to get scammed. If you’re dealing with someone on Craigslist, it may be a different story.
- Have a third-party verify that the car exists and the vehicle identification number matches what it says on the lower-left corner of the dashboard, in front of the steering wheel.
- Don’t send anyone any money before meeting the seller.
2. Make Sure the Car is Able to Be Transferred to Your State (Determine Emissions Requirements)
California, for example, has very strict emissions regulations. Before you buy a car out of state, you want to make sure that you’re legally allowed to transfer the car to the state in which you live. According to the California DMV itself, “Not all new vehicles are manufactured to be sold in California. Many manufacturers make vehicles to be sold only in the other 49 states.”
The first step is to make sure that the car can be transferred to your state, particularly if you live in California.
3. Get a Vehicle History Report
Next, you need to make sure that the vehicle’s title is clear of any liens – legal claims that a mechanic or lender has made for the car to ensure that they get paid. If the title isn’t free and clear, then you become responsible for those liens when you purchase the car.
4. Consider Having It Inspected
Since you can’t see the car in person, you’ll want to hire an independent third-party mechanic to perform a used car inspection. These usually only cost $75-100 and they’ll turn up problems that could cost you thousands.
At the very least, if you don’t want to pay for a full inspection, have someone you trust look at the car and verify the VIN (vehicle identification number) and other basic information (like if the car’s color matches what it says online, any obvious scratches/dents, etc).
5. Buy the Car (and Pay Sales Tax)
One of the most obvious steps: buy the car. Sales tax can vary from 3-8% of the purchase price of the vehicle, depending on the state, so make sure that this is something that you’re factoring in to your total costs.
6. Register the Car
After the sales taxes are covered (and possibly after some basic emissions and safety checks, depending on your state), you can register the car in the state in which you live.
7. Insure the Car
You’ll need to make sure that you have insurance before you even drive the car, so make sure that your car insurance policy will cover your temporary registration after you purchase the car. Generally, this is something that the dealership will let you know about ahead of time so that you don’t end up in an accident that will cost you an outrageous amount to fix.
Once the car is registered and you have plates in the state where you live, though, you can insure the car for the long term.
8. Obtain Title
Finally, obtain the title. You’re all done! Congratulations on your new vehicle.
FAQS: How to Buy a Car Out of State
What Credit Score is Needed to Buy a Car?
As long as you know where to look, you don’t need a credit score in order to buy a car. Many dealerships are more than willing to consider proof of income in lieu of a credit score, and if you’re buying the car in cash, a credit score isn’t even a factor.
However, a credit score of 660 or better will generally put you in the “Prime” borrower category, earning you a much lower interest rate on an auto loan.
In order to secure an auto loan with a poor credit score (or no credit score), you have a few options: 1) go to a dealership that specializes in people with no credit scores, 2) have a parent or friend co-sign, or 3) contribute a large down payment.
Can I Buy a Car Without a License?
In the United States, there are no laws that require you to have a license in order to buy a car. If you want to drive the car back to your state, you’ll definitely need a license for that, though.
Closing Thoughts: How to Buy a Car Out of State
Buying a car out of state can be a great deal, particularly if you find a cheap used car or the classic car of your dreams. However, there are some pretty serious pitfalls that you can fall into if you aren’t careful. Make sure to consider the total costs of buying a car out of state before pulling the trigger.