What You Need to Know Before Buying a Car Out of State

There are a few reasons why you might consider going to another state to buy a vehicle, especially if you leave near a border. Maybe you want to get a savings on sales tax, or there’s a dealership somewhere else with a car you’ve had your eye on. Whatever the reason, there are a few things you should consider first.

Purchasing the vehicle might be straightforward, but the paperwork follows the rules of the state where the buyer lives, not necessarily the state where the sale occurs. And not knowing what you’re doing can make the experience costly and confusing.

Understand Your Home State’s Rules Before You Buy

Before contacting a seller, buyers should review their home state’s motor vehicle requirements. Some states require a vehicle identification number inspection, emissions testing, proof of insurance, or additional paperwork before issuing a title and registration. Registration deadlines will also vary.

You might think you’re sneaky going across a state line to avoid sales tax. But in many cases, buyers are taxed when they register the vehicle in their home state. That will either be collected by the dealer and paid on the buyer’s behalf, or the buyer will pay it directly.

Even if the vehicle passed inspection in the selling state, it may still need another inspection in its new state. Safety and emissions programs differ by state, sometimes even by county. California, for example, requires vehicles registered in the state to meet its emissions requirements.

Some states require that new vehicles undergo an inspection after they enter the state.

Prepare Before Taking Possession of the Vehicle

As is the case when purchasing any new vehicle, buyers going across state lines will need to contact their insurance provider to get coverage before driving it home. Also needed are valid insurance and any required temporary tags or transit permits. Those may come from the selling state, the dealer, or the buyer’s home state, depending on where you live and where you purchased the vehicle.

Ensure the vehicle you plan to purchase will pass inspections and regulations for your home state. Otherwise, you could be making an expensive mistake.

Sources

USA.gov, “State Motor Vehicle Services”
Federal Trade Commission (FTC), “Buying a Used Car From a Dealer”
California Department of Motor Vehicles, “Smog Inspections”
New York Department of Motor Vehicles, “Register an Out-of-State Vehicle”

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