You might have a few questions if you are purchasing car out of your state or if you're thinking about shopping for one. What taxes are you paying for, and to which state? What about the requirements for emissions, the approvals for loans or the car being sent to you?
To help you know what's going on behind the thick curtain of buying a car and the government, we're going to go over the basics of how to buy a car from another state and what to look for.
Consider This First
You can make your transaction more complicated by buying a car in a different state, but knowing what to expect before you start shopping can ease some of that stress. Here are a few things to investigate in advance.
Taxation
When talking about tax, we mean sales tax. In the state where you are registering, you will generally pay sales tax on your new car. If you're considering buying a car in a state that doesn't charge sales tax — Alaska, Delaware, Montana, New Hampshire or Oregon — you can only get those savings if you're registering your car in that state.
Many states require you in the state where you live to register your vehicle. Check beforehand with the Motor Vehicles Department of your state to understand their policy.
Vehicle Registration
You may need a temporary registration before you register your vehicle if you plan to drive the vehicle to your home state.
If you buy a car from a dealer, the registration paperwork can often help you. But if you buy from a private seller, you probably need to know the state's requirements for a temporary registration and apply for it on your own at the DMV.
Note that you may need to submit a vehicle identification number, or VIN, verification form to ensure the vehicle was not stolen when you register the vehicle in your home state.
Insurance
You may or may not need to get coverage for your new car before you buy it, depending on your current car insurance policy. Your current coverage extends to a new vehicle purchase with some insurance companies as long as you notify the insurer within a certain time frame that you have purchased a new vehicle.
But some policies do not offer this extension, so before you make a purchase, you'll want to have the coverage in place. Also, if you finance the vehicle, some types of insurance will probably be required by lenders, often including liability insurance.
Vehicle Transportation
If you plan to drive the car back to your home state, you're going to want to get a temporary registration to allow the car to drive first. But if you plan to ship it, you may need to do some research at a reasonable rate to find a reliable shipping company.
If the purchase of your car is a dealership transaction, ask your dealer if they have relationships with companies that are able to ship your car. Otherwise, spend some time examining different options to ensure that your circumstances are best dealt with.
Am I Able To Buy a Car Out of State?
There is nothing to prevent a customer from passing government boundaries to purchase either a new or a used vehicle, although there are some items to consider.
For example, it requires more time and energy to shop for an out-of-state car, and it may require extra caution. Traveling to wherever the vehicle is situated is always the best way to make sure it is as publicized, and giving the car or truck a test drive before entering a sales contract. Even cheaper, take the moment to have the vehicle checked by a local mechanic who can assess the mechanical situation of the car and advise of any probable roadside issues.
Vehicle Emissions
Each state has different requirements for emissions, so in another state a car that passes the minimum standards of one state may fail. For example, through the California Air Resources Board, California set strict emission standards, and several other states followed suit.
Check that the car you want to buy is "California certified," meaning that it is made to comply with California smog regulations. Many vehicles are produced solely for sale in the other 49 states and comply with federal emission regulations.
Purchasing A Vehicle From Different State
If you can possibly find a better deal or an otherwise difficult-to-find model in another state, whether new or used, you're going to have to take a day trip to handle the transaction yourself. Again, it is important to meet the owner and give a thorough test drive for the car. If you're looking for a specific new vehicle you can't find near where you live, this can be an easier undertaking. This is because you can usually have the closest dealer for a given brand search for inventories from other dealers and have the vehicle shipped for purchase locally.
That said, be careful about classified listings outside the city that involve a third-party agent using a transfer of funds service. The vehicle will never be delivered there is a good chance and you will never hear from the "seller" again. Another growing problem is the "cloning" of vehicles. Here, thieves obtain a legitimate vehicle identification number (VIN) from a vehicle that matches the year, make, model and color a stolen vehicle and swap or duplicate the identification numbers. This is where con artists illegally remove "salvage" or "flood" designations from vehicle documents to make wrecks look like problem-free models, at least on paper.
This is why you should consider purchasing a used vehicle only after obtaining a CARFAX or Autocheck Vehicle History Report that can confirm the number of owners and the reading of the odometer. If the car was in a wreck, flooded or rescued, these reports may also indicate those circumstances.
Subject Matter
Buying that state of the-art car can help you save money in the right situation, and it can be the best way to get the model you want. But it can take time to make the necessary preparations, so plan ahead before you buy.
Research the various laws and requirements for out of state vehicle purchases that your state has. Have an insurance and transportation plan in advance and find out if the seller offers a time window in which you can return the vehicle if it is not what it has been advertised to be.
Finally, as you consider how much car you can afford, make sure you know all the costs of buying an out of state car so your new vehicle fits your budget.