Find out the essential steps you need to take to buy a car out of state in 2019. It pays to check with your state DMV’s website beforehand to see what’s required to save you time and effort. Another good reason to buy a car out of state is if you have your heart set on a specific make and model. … A new car is often the second largest purchase (after a house) that a person will make in a lifetime. Alabama collects a 2% state sales tax rate on the purchase of vehicles, which includes off-road motorcycles and ATVs. New Hampshire: $8,098. If you are hoping to save some tax dollars by buying your car out of state, think again. Many dealerships will give you a temporary registration sticker to use for your drive home. See who has the best deals this month! One great reason to buy a car out of state is if you find a nearby dealership who is offering a knockout deal on a particular vehicle or a special for first-time customers. Annual ownership and usage costs: $2,691. Once you have found the car of your dreams, assuming it is a new vehicle, it’s always a good idea to ask for a copy of the window sticker. If you’ve bought a car from a dealership, they will likely collect sales tax and pass it along to the proper agency in your state. When you buy your car from a dealership in another state, they may have the authority to collect state sales tax and send it to your state along with other paperwork for the title and registration. The Carfax Report may also indicate if the car has ever been in a crash, flooded, or salvaged. Additional Car Buying Tips to Know. Dealer incentives. You’ll receive a signed title from the seller that names you as the current owner, but you will have to transfer the title to your home state, and register the car there as well. Ask preliminary questions before going to see the car. Have the seller show proof that the vehicle has passed its last emissions test to avoid any surprises later on. What’s more, prices for specific types of used vehicles can vary by region. Call your insurance company before making the sale to ensure that you are covered in this scenario. If buying a car out of state from a dealer, he or she will usually handle the temporary title and registration paperwork for you. A missing title … They will usually help you with all of the necessary paperwork. You may also have to pay any applicable local sales taxes. Buying a car out of state can be challenging, but it can also help you save money under the right circumstances. It would be best if you tried to find a car you can afford that is located in your state or, at the very least, in one nearby. You might have to pay the difference if the seller’s state sales tax is lower than your state’s. The seller should provide a signed title and bill of sale. My PA job situation is a long-term temp situation, so I don't want to transfer my license just for the purchase of a car. Though some of these modifications are relatively simple, many of them can be expensive. Being prepared is key. If you buy from a private party, you should be prepared to be stopped by law enforcement on the way home for not having a license plate. One-time purchase costs: $25. We’ve seen incentives on some models differ by as much as $1,500 depending on location. It can save you so much in fact that it might just be worth the drive. A newer vehicle may not require an emissions test, but these standards change by state and even by county. Many automakers offer deals on their certified used cars, like they do on new cars. There’s nothing to stop a buyer from crossing state borders to buy either a new or a used car. Remember the trip home: If you end up purchasing the vehicle, you also want to consider the drive home. It won't work. For example, convertibles tend to be in greater demand – and command more money – in warmer climates than colder ones. You will need to go to the DMV within a certain amount of time -- usually anywhere between 30 to 60 days -- to acquire these essential documents. However, there are a few things to consider. Of course, much of this paperwork will be temporary, given you'll need to title and register the vehicle in your home state upon returning. I specialize in the vehicle buying and ownership experience, with a few car reviews thrown in for good measure. Some states may require that you have a safety inspection done to ensure that the car is road-worthy. This will give you proof of ownership for your drive home, as well as your trip to the DMV to get proper license and registration. The short answer is that buying a car out of state could be the best way to get what you want and a good deal. Buying a new car is a big decision. Discounts for volume sales are not taxable. If the car you want is difficult to find or you have found it at a significantly cheaper price point, then it might be worth the trouble of buying it out of state. Conversely, four-wheel-drive trucks and SUVs tend to be more valuable in northern states than in the South. The process of getting insurance for an out of state vehicle purchase is similar to insuring a car bought in the owner’s state of residence. If you can, get proof that the car passed its last emission test so you know what you're getting yourself into. If you have questions about this story, please contact us at Editors@carfax.com. The purchaser must pay tax when registering the vehicle. It may be worth a long drive to get a bigger rebate or zero-percent financing if it’s not being offered where you live. You should have this paperwork from the dealer when you purchased the car. The KY dealer sold it without tax and a temporary cardboard plate. Typically, if you are buying your car from a private seller, the sales taxes will be collected after the actual sale. You might live close to a state border. Follow these simple steps to ensure that your vehicle purchase goes as smoothly as possible. Then, go visit the seller to make sure the car is as advertised, and be sure to take a test drive. If you’re buying a used car from a private party, you may have to pay taxes on the transaction price when it’s registered. By going to see the car in person, you can check for visual defects. So, if you can find a similar vehicle at a comparable – or even slightly higher – price within state lines, you should consider that car first. Before you make any big out-of-state treks to potentially buy a car, make sure that you're not making the trip for nothing. This will cost you some money up front, but it is money well spent. Research the car thoroughly. According to Autotrader, there are three ways to get an out of state vehicle insured after the purchase. MojoMotors.com, a used-car classified ad site, said its recent research showed Alabama was the most expensive state for those items, at an estimated average … If you're from California, emissions can be tricky. Be wary of out-of-town used-car classified listings that involve a third-party agent using a funds-transfer service. There’s a good chance the vehicle will never be delivered and you’ll never hear from the “seller” again. Can I Buy a Car Out Of State? Determine if the car is, in fact, what the seller says it is. Show them the paperwork for the car. Local supply and demand are key elements in determining a vehicle’s transaction price, whether new or used. On the other hand, when performing an in-person out of state title transfer after buying a vehicle without a title from another state, motorists will be required to submit a manufacturer’s statement of origin (MSO) document. This way, you don't have to pay a sales tax on your vehicle in the new state when you re-register it. Buying a car out of state - and I can't figure out the tax, title, and license fees for AL (Huntsville: sales) User Name: Remember Me: Password ... a cash purchase (mine was a new vehicle if that makes a difference I don't know). Before you buy, test drive the car. Test drive the car: Generally speaking, you should be able to visit and test drive the car you want to purchase. Before you make your purchase, make sure that the brake lights, seat belts, steering system, and other essential components of the car work. Alabama State Code 810-5-75-.35, Section 40-12-260 (b) (2) requires individuals who reside in the state to obtain a license plate for any new or used motor vehicle within 20 calendar days of purchase or transfer of ownership. Use Carfax’s Dealer Directory to Find Top-Rated Dealers in Your Area. Sometimes buying a car out of state can save a lot of money. Opting for an out of state car purchase is different than buying a car in Washington. Buying a car out-of-state can be a major undertaking. Check the automaker’s website to see whether the offers change based on location. Yes, you can. If you buy from a dealership, the dealer may alleviate some of the burden by filing paperwork or submitting tax forms once you have paid for the car. I've been covering cars for more than 30 years, with 17 of those spent as automotive editor for Consumers Digest magazine. However, if you are buying your car from a private seller, you will have to handle the paperwork on your own. I bought a car in Kentucky (which has a 6% sales tax) and drove it back to NC (which has a 3% highway use tax). If you're unsure, it may be better to stick to local options. It's important to familiarize yourself with the regulations in your specific state. Getting your title and registration in order is an easy process if you're buying your car from an out-of-state dealership. If you plan to buy a vehicle that doesn't meet these requirements, be sure to find out what modifications would be needed. It can be a lot easier to get scammed if you're purchasing a car out of state without seeing it first. Our expert team staffs DMV buffs who know all of the ins and outs of car registration, taxes, titling, and more. You need to ensure that the car is as-advertised and is in working order. I hold a B.A. Bring along identification: This typically includes a government-issued photo ID (your driver’s license should do), along with a utility or tax bill that proves your address. Some states require dealerships to obtain proof of insurance before completing the sale. However, if you're buying from a private seller, you'll need to handle title and registration paperwork on your own. Otherwise, you might find that the car has more defects than the seller let on. How can I check out the car? With the passage of Acts 2015-503 and 2015-551, sales of automobiles, motorcycles, trucks, truck trailers, or semitrailers, excluding motor homes and travel trailers, that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama, are subject to the Alabama sales tax in an amount equal to the state automotive sales … Therefore, in addition to completing an out of state vehicle title transfer when applying for a DOR title as a new state resident, you will also need to transfer the car title of a vehicle with out-of-state … Even better, take the time to have a used vehicle inspected by a local mechanic who can evaluate its mechanical condition – particularly the parts you can’t see – and alert you to any possible problems. Finally, watch out for “title washing.” 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. Your registration process will be delayed if your state requires emissions tests. You need to make sure your new or used car financing is worked out early on. Sometimes, when a person buys a car without doing enough research, being reasonable about finances, or comparing prices, he wants to return the car. Also, do not forget to consider the sales tax rate. New vs. Used Car Buying from Out of State. Carfax Used Car Listings Make it Easy to Find Your Next Car. Action Alerts PLUS is a registered trademark of TheStreet, Inc. state that does not allow transfer of plates. A dealer's affidavit, IF your vehicle was purchased from an out-of-state dealership. If you're buying from a private seller, you may get pulled over on your way home for not having a license plate if you purchased in a state that does not allow transfer of plates. Discounts (Rule 810-6-1-.53): Cash discounts are not taxable. As With Any Car Purchase, Do Your Research. It’s best to ask the DMV representative. This won't just save you extra time and money when it's time to get your car inspected, but it will also keep you safe. You will need to provide proof that the vehicle meets the California Air Resources Board's requirements or have it modified to meet their standard. Once you've decided that it's worth buying a car out of state, it's important to be prepared for some of the common pitfalls and obstacles you may face. Worst State to Avoid Unexpected Fees: Alabama If you want to avoid paying unexpected fees, steer clear of Alabama. However, some cars simply aren’t widely available in certain areas. This will help you prove that the car belongs to you if you get pulled over. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. Thinking about buying a new vehicle from another state in the hopes of avoiding taxes? If I buy a car in PA, will I have to drive it to Alabama to register it and get plates? © 2021 TheStreet, Inc. All rights reserved. Another growing problem is vehicle “cloning.” Here, thieves obtain a legitimate vehicle identification number (VIN) from a car matching the year, make, model, and color of a stolen vehicle and swap or duplicate the identifying digits. Once you’ve bought the car, you have a certain number of days to register the title at your local DMV, usually paying a fee. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of. Tips for buying a car out of state. Call the Consumer Protection Division of the Alabama Attorney General's Office: 1-800-392-5658. Why Buy Out of State? Steps to Buying a Car Out of State First, obtain a vehicle history report for the car you plan to purchase. Maybe you’ve found a dealership that advertises great rates for first-time customers. CARFAX Vehicle History products and services are based only on information supplied to CARFAX. Some of the extra steps for out-of-state buying are going to cost you money. You will be required to pay the sales tax rate from your home state. You want to be absolutely sure that this is the car you want. Generally, when you're buying a car from an out-of-state dealership, the dealer handles all title and registration paperwork for you. If you want to buy a car out of state, plan to see the car in person before you make your decision. If you buy a car from a dealership, they may give you a temporary registration sticker. Shopping for a car out of state is one of the best ways to find the car you’ve been dreaming of and also a way to find a better deal. If you purchase your vehicle at a dealership, they will likely collect their state's taxes on the spot and you will be required to make up the difference when you visit the DMV at home. In many states, an emissions test or smog check will be required to get a car registered, and that could delay your registration process. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. It’s also a good idea to contact your insurance company immediately upon purchasing any car to be sure you’re covered for the ride home. CARFAX does not have the complete history of every vehicle. Alabama … There are other loopholes, too. At a minimum, make sure you have the title of the vehicle and proof of insurance. Here are the facts on that and other out-of-state buying issues to keep in mind. However, there are a few things to consider. If you are wondering when an out of state car title transfer is necessary in Alabama, it is important to know that you will be required to apply for a DOR certificate of title in situations when you are attempting to register a vehicle with an out of state title. delivery of an automotive vehicle in Alabama for an out-of-state dealer is not the seller and is not liable for collecting Alabama sales tax; the out-of-state dealer is the seller. Have a mechanic you trust inspect the car. Never purchase a vehicle sight-unseen. For new cars, manufacturer rebates and financing incentives can vary by region. Buying a car out of state is not for the faint of heart or the undecided. No matter what your situation is, buying a car from a different state requires a couple more steps to help you avoid any issues along the way. At this stage, the kind of arrangement you have with the seller when buying a car in another state changes what how you arrange transfer of ownership. Some insurance policies provide automatic coverage for a limited amount of time for new purchases. If you see a car you that you know you want online, check in with the dealer or private seller via email, phone, or text before making a big drive. Before you buy a car, confirm that the car adheres to the state’s safety standards. While all the tips here are designed to help you make it somewhat more manageable, you can't forget the basics of car buying during the process. First, get the Carfax Vehicle History Report to dig into its past. To avoid issues like the ones mentioned above, you should consider obtaining a Carfax Vehicle History Report before purchasing a vehicle. Some states offer “trip permits” that let you drive an unregistered car for a few days – enough time to get it home and get it registered. For vehicles that are being rented or leased, see see taxation of leases and rentals. Find out when you should consider buying a car out of state and what steps you should take. Buying a car out of state can be a challenge, but the benefits can be worth it. A Carfax Report can confirm the number of owners and the odometer reading. Use the CARFAX search as one important tool, along with a vehicle inspection and test drive, to make a better decision about your next used car. You’ll probably have to show proof of insurance, as well. This is especially true if you live on or close to the border of another state. You’ll still have to complete the process through your state DMV, though. You'll want to ask the dealer so that you're prepared to pay the amount when you go to register the car if the dealer can't collect it. Safety Tips for Buying a Car in Alabama Buying a car is a big investment, and though many sellers are honest about the condition of their vehicle, you can never be too careful. These might negate any savings you might achieve from buying your car out of state. Use Carfax’s Service Shop Directory to Find Top-Rated Mechanics in Your Area. You will be required to provide the money before you register the vehicle and get a title. Ask the dealer for the name and address of the previous owner. You don't pay TN tax at all, and not Alabama tax until you register your vehicle in AL and get your tags. Every Car Comes With a Free Carfax Report. Buying a car out of state might be a little more effort than buying a car close by, but it can often reap great rewards. Further, buying an out-of-state car at Balise Mazda is actually pretty easy, because we take care of all of the tough stuff for you. in Communication from Southern Illinois University and live just outside of Chicago. I have an Alabama license but work in Pennsylvania.. Buying a Car out of State: Title and Registration. It's important to familiarize yourself with your area's emissions regulations before committing to a vehicle. Take the vehicle to a mechanic who can verify that it doesn't have any major problems. My weekly “Wheel Deals” newspaper articles are syndicated by CTW Features. There’s nothing to stop a buyer from crossing state borders to buy either a new or a used car. Crossing state lines is a challenging part of buying a new or used vehicle. If you plan to move from a state without sales taxes to one with sales taxes, you should buy the car and register it about three months before your move. Keep in mind your state's safety regulations when purchasing an out-of-state vehicle. Yes, you can. You may get a great deal on the car, but you don't want to end up paying more for major repairs down the road. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. My work has been featured in print publications including Forbes, Chicago Magazine, Men’s Fitness, Executive Travel and Muscle & Fitness, as well as websites including Forbes.com and Carfax.com. So, if you hail from that northeastern commonwealth and are buying out of state, you can drive the car as far as the Connecticut, New Hampshire, New York, Rhode Island, or Vermont border, but will then need to park the car and call a cab to take you the rest of the way. This can potentially help you save a lot of money if dealerships in your area aren't running similar deals. Including city and county vehicle sales taxes, the total sales tax due will be between 3.375% and 4% of the vehicle's purchase price. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of.