What is the cheapest state to buy a car?

CarsArrive | Costs , Cars

If you’re looking to buy a car, you know it can be a major investment in both time and money. But what you might not realize is that the state you buy your new vehicle in can also have a major impact on the price you’ll end up paying for those new wheels.

Certain states, like California and New York for example, not only have higher average prices per vehicle, you also end up paying more because of things like taxes and fees after your initial purchase. If you’re looking for a used car, Florida might be the best option, as the average price per vehicle is almost 10% lower than in other states.

Shopping around can pay off

Casting a wide net in your search for a new vehicle means that you can compare different prices and find ways to save the most money. It goes without saying that the initial cost of the car is a big factor in any purchase decision. You might think that the cost of a vehicle would be the same everywhere in the country, but prices often fluctuate state to state depending on things like supply and demand, where that particular model is manufactured, and more. For example, because Ford F-150s are manufactured in Missouri and Rhode Island, you can often find them priced lower in those states compared to others.  

Since the location of the vehicle can itself be a big factor in the price, you can often find the same model at a lower sales price than what your local car dealer is asking in a different state. In addition, if you can’t find the model you’re looking for locally, shopping around at locations in other states can help you find exactly what you want. You have an entire country to search, so be sure not to limit yourself by only looking in your own backyard.

Initial cost is not the only factor to consider when purchasing a new vehicle – there are a number of additional costs that can really add up, and you need to keep these in mind when making a decision.

Taxes and fees

Many states that charge sales taxes at the state level also allow local governments to impose sales and use taxes, and this means that depending on the city or county in which you buy a vehicle, you might end up paying more in taxes for the same vehicle somewhere else, even if the sales price is the same. Before deciding on a vehicle purchase, you should take the time to do your homework and learn more about the tax regulations in that particular location.

Can I buy a car in a zero-sales-tax state and pay no taxes?

There are some states that don't charge sales taxes on cars, including Montana, Delaware, Oregon, and New Hampshire. Unfortunately, you can’t just avoid paying taxes by buying the vehicle from one of these states.

When you buy a vehicle – even from out of state – you are required to pay taxes and fees based on your state of residence. However, you may be able to get tax deductions for your vehicle when you add it to your tax filing, especially if the vehicle is used for work or if it meets certain other criteria, like being a hybrid, low-emission or no-emission vehicle. These deductions can take some of the sting out of paying sales tax when you purchase the vehicle. 

Documentation fees

When you buy a car from a dealer, they’re almost always going to charge documentation fees to cover the administrative costs related to the paperwork to do to put the deal through. Some states put caps on the administrative fees that dealerships are allowed charge and others don’t, so this is another area where doing your homework before you buy can save you some money. And while you can’t haggle a dealer on the documentation fee for the car (dealers legally have to charge each customer the same documentation fee), that doesn’t mean you can’t haggle the price of the vehicle down to compensate for the documentation fee.

Registration

Before you drive off the lot in your new vehicle, you need to get it registered with your state’s Department of Motor Vehicle (DMV) first to establish yourself as the legal owner. Different states have different methods of calculating the registration fees. Some states charge a flat rate, while others are based on things such as the weight of the vehicle, the value of the vehicle, or the age of the person registering the vehicle.

Emissions

Even if a vehicle passed emissions standards in the state you bought it from, it might fail in your home state, and this can be a major hassle. Certain states, like California, New York and Massachusetts, have much more stringent smog regulations than others, so if you’re purchasing a vehicle from out of state, you may want to double check that it is compliant in your area.

Transportation

Another factor to consider when buying a car from out of state is how you’re going to get it home. To transport it yourself, you would first need to a temporary registration before you can drive it back. However, in most cases, driving your new vehicle isn’t the easiest or the most cost efficient way to get it home. From accidents and breakdowns to expensive fuel prices, there are a lot of things that can go wrong with driving your new vehicle home yourself – whether it’s a cross-country or just from a neighboring state.

The simplest and cheapest way to get your new vehicle is to trust a reputable auto shipping company like CarsArrive Auto Relocation to get it to your door.  

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