The Complete Guide to Buying a Car Out of State – Forbes Advisor

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If you are looking for a new or used vehicle, you might consider buying an out-of-state car. Although it is possible, the process is more complicated than going to your local dealership.

Here’s how buying a car out of state works and what you need to know before you decide to do it.

Can you buy a car out of state?

Yes, you can buy a car out of state. Just keep in mind that while you may find a good deal on an out-of-state vehicle, buying it can be a little tricky, especially if you’re buying from a private seller rather than a dealership.

How to Buy a Car Out of State

If you’re set on buying a car out of state, here are the steps to take, depending on whether you’re working with a dealership or a private seller.

Buy from a reseller

In some cases, dealers in other states may have more inventory than is available on your local lots. Or maybe they just offer a better price on the car you want.

Regardless of your situation, you might have an easier time buying from a dealership than working with a private seller for an out-of-state purchase. This is because dealerships are generally more experienced with the Department of Motor Vehicles (DMV) and can help you navigate the paperwork requirements.

If you decide to buy from a dealer, follow these steps:

  1. Make sure you want the car. It’s essential to be certain that the vehicle you’re considering is the car you want and is worth a round trip or shipping to your location if you’re buying it online. This way, you won’t waste your time with a complicated buying process if you end up changing your mind.
  2. Know the price. Check again what the final cost of the vehicle is. This is the off-lot or off-lot price, which includes the sale price, destination charge, sales tax and dealer fees as well as title and registration fees. Note that when you buy a vehicle out of state, you will usually have to pay sales tax in the state where you register the car, not where you buy it.
  3. Put the car on hold. If you are going to drive to the dealership, contact the dealership first and request that the car be put on hold. It’s a good idea to get confirmation of the hold before you go (in writing, if possible). This way, you won’t make the trip and find someone else who has already bought or is in the process of buying the car you want. The dealer can also check what documents you may need to bring with you for an out-of-state purchase.
  4. Check requirements. Contact your local DMV to see what is needed for an out-of-state vehicle purchase. For example, you’ll need to know what the smog and emissions standards are for your state as well as whether a safety check is required.
  5. Check car history. If you’re considering a used vehicle, be sure to check the car’s history to know what you’re getting into. You can visit the National Motor Vehicle Title Information System (NMVTIS) to find a reputable provider for a car history report.
  6. Insure the car. Before you can register the car, you will usually need to provide proof of insurance. It’s a good idea to discuss your situation with an insurance agent to see if your existing policy (if you have one) will cover a new car for a short time or if you need to purchase a new policy immediately. They can also tell you whether you can drive your new car in your home country before registering it and what steps to take to avoid any violations of the law.
  7. Complete the transaction. Drive to the dealership or have the car shipped to you to complete your purchase.

Buy from a private seller

Buying a vehicle out of state from a private seller will likely require more legwork than going through a dealership, as you will need to visit the DMV and complete the required paperwork yourself. However, you might be able to get a better price from a private party versus a reseller, which might be worth it.

If you’re ready to buy from a private seller, follow these steps:

  1. Make sure you want the car. Just like buying from a dealership, buying from a private out-of-state seller comes with some extra work. So it’s important to know for sure that you actually want the car before you start.
  2. Know the price. Resources like the Kelley Blue Book and the National Automobiles Dealer Association (NADA) can help you determine what you should reasonably pay for the vehicle. Remember to factor your state’s sales tax as well as title and registration fees into the overall cost.
  3. contact the seller. Contact the seller to let them know you want to buy the car.
  4. Check requirements. Contact your local DMV to see what documents are needed to purchase a vehicle out of state. At a minimum, you will need the seller to sign the title and complete a bill of sale to show that you now own the car. You may also need to apply for temporary registration before traveling to view the vehicle. Also, some older or classic vehicles may not meet air quality standards. So check what the safety and emissions requirements are for your state.
  5. Check car history. If you’re buying from a private seller, it’s even more important to do your research and review the vehicle’s history. Visit the NMVTIS to locate a trusted vehicle history provider. It’s also a good idea to have the car inspected by a mechanic before buying it to see if there are any issues that the seller hasn’t mentioned.
  6. Insure the car. Be prepared to set up an insurance policy for your new car before you can register it with the DMV. Remember to check with an insurance agent to see if you can drive the car across state lines before it is registered in your state.
  7. Complete the transaction. If you’ve come to an agreement with the seller and arranged the necessary paperwork with the DMV, you’re ready to close the deal and get your new car back.

What to Consider Before Buying a Car Out of State

Knowing what to expect from an out-of-state vehicle purchase can help make the process less overwhelming. Here are some important things to look for beforehand:

Requirements from your home state

Each state has its own requirements for buying and registering a car. Be sure to contact your local DMV to get a good idea of ​​the rules and the paperwork you’ll need to complete.

Safety, emissions and smog requirements

Depending on your state, you might need a safety inspection for your car. Although a dealer will usually take care of this for you, a private seller will not. If you need it, you will therefore have to take the vehicle to an authorized mechanic. Although a safety inspection is not required, it is a good idea to have the car examined by a mechanic just in case.

You will also need to make sure the vehicle meets your state’s emissions and smog requirements.

Vehicle history

If you’re considering a used car, it’s important to do your homework and check the vehicle’s history through one of the NMVTIS sources. This will give you a complete overview of where the car has been, from number of owners, to accidents, to whether it has a salvage title.

Also check if the car has a loan and if so, if you buy the vehicle, you will satisfy the lien placed on it by the lender.

Taxes

Don’t think you can avoid paying sales tax by buying a car in a state that doesn’t charge it. You have to pay taxes in the state you register the car in, not where you buy it.

Title and registration

If you are purchasing a vehicle from an out-of-state dealership, they will usually handle title and registration paperwork as a routine part of the transaction. You can usually expect to receive a temporary registration which will allow the vehicle to be brought back to your home country.

However, if you are buying from a private seller, you will need to work with both your local DMV as well as the DMV in the state where you are purchasing the vehicle. You should expect to get at least a signed bill of sale and title from the seller, which you will take to the DMV to show that you are the new owner.

If you’d rather not have to worry about getting the car back to your state, shipping the vehicle might also be an option, but that also comes with additional expense. You can expect to pay between $500 and $1,700 in fees, depending on where the car is being shipped.

Insurance

It’s best to check with your current auto insurance company (if you have one) before purchasing an out-of-state vehicle. In some cases, your existing coverage will extend to the purchase of a new car for a short period. If not, an insurance agent can help you set up a new policy and explain if you can bring the vehicle back to your state before it’s registered.

Advantages and Disadvantages of Buying a Car Out of State

While buying a car out of state can be a hassle, it can also be worth it in some cases. Here are some pros and cons to keep in mind as you weigh your options:

Advantages of buying a car out of state

  • Wider selection: In some cases, it can be difficult to find the exact car you want at your local dealership, for example if you are looking for a rare or older model. By broadening your search to out-of-state dealers and sellers, you might have an easier time finding what you’re looking for.
  • Could save you money: Several factors can affect the sale price of a car, such as location and demand. In some cases, you might be able to buy a car for less money by buying out of state, but keep in mind that you’ll have to pay sales tax depending on where you register the car. vehicle.

Disadvantages of Buying a Car Out of State

  • More complicated: There are other hoops you will have to jump through to buy a car out of state, especially if you choose to buy a car from a private out-of-state seller. This may include collaborating with your local DMV, finding documents and more. Additionally, you’ll need to figure out how to get the car home, whether that’s round trip or shipping it.
  • More time: You will have to do a lot of research before buying a car out of state, which will be much more demanding than working with a local dealership.
  • Maybe more expensive: If you choose to return the vehicle to your home, you will have to pay shipping costs, which can range from $500 to $1,700.

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