You may also consider buying a car from another state to save money. There are regional differences in new-vehicle pricing and manufacturer incentives, so a car with no incentive available in your state might have a lower price and a rich incentive on it elsewhere.
Another potential reason to consider an out-of-state car purchase revolves around the fact that some vehicles are popular in one market while they are less popular in another. This means you might be able to buy a model with four-wheel drive (4WD) in the Sunbelt cheaper than you could buy it in the Rockies. And this potential opportunity, unlike the first, applies equally to used vehicles. You might discover with an Internet search that a particular five-year-old sports car you crave is much cheaper in another state than it is in your local area. You might also believe that buying a car out of state is a way to steer around state and local taxes, which could potentially save you some money, but as you'll see, that is unlikely.
Finally, a third reason to consider buying a car from another state is that online buying services like Carvana, Vroom, and Shift are making it much easier to find out-of-state vehicles you might want to buy. They take the hassle out of the process as well.
With that in mind, it is wise to be confident that buying a vehicle from out of state will be a better move for you than purchasing a vehicle from a local dealer or a private party in your state. If you live in a big urban area in a populous state, the odds are you'll be able to find a car that meets your expectations without venturing outside the state boundaries. That being the case, you would have to save quite a bit of money to justify the extra steps involved in buying it out of state.
On the other hand, if you seek a rare car, your only choice might be beyond your state lines. Or you might find a compelling deal on a vehicle that is halfway across the country whose combination of condition, equipment, and price make the extra effort worth it. Those are value judgments only you can make.
One of the most significant drawbacks of buying a car from another state is the distance between you and the vehicle. Should you live close to another state, crossing the state line is easier. But for many car buyers, the distance can be an obstacle. After all, we heartily advise seeing and test driving the vehicle before you buy it.
Scams are also a complication of buying a car long-distance. Fraud involving vehicle sales is a significant and growing problem. If a classified listing for a used car appears to offer the vehicle at an unbelievable bargain price, you are well-advised to believe the listing might be the front for a scam. You send money with the expectation that the car will be delivered to you, and you never hear from the seller/scam artist again.
Beyond that, getting through the paperwork involved in buying an out-of-state-car is typically more complicated than you'll encounter when purchasing one within your state. Each state has specific requirements for sales tax, registration, insurance, and emissions compliance. Just understanding all the steps you need to take can make the process more time-consuming than the typical in-state transaction.
Whether you are buying a showroom-new vehicle, a "basket case," or a parts car, understanding the vehicle's condition is the absolute key to getting a good deal. The distance can be a significant impediment to doing that. You might be reluctant to travel to look at the potential purchase for time or cost reasons, and you are probably very reluctant to do that repeatedly. That implies that you find a substitute for going to see and drive the car yourself.
In addition to assessing whether or not the out-of-state vehicle is a sound car that you feel good about buying, you must also deal with the paperwork, fees, and taxes that are an integral part of buying a car.
You will have to pay to get the car titled and registered in your home state, and you will likely have to produce a "bill of sale" and the transferred title to prove that you purchased the car legally. You must do this within the timeframe specified by your home state, which could be as little as 30 days. Depending upon your state's rules, the car might also have to pass an exhaust emissions test before you are allowed to register it.
Speaking of vehicle registration, depending upon regulations in the states involved in your vehicle purchase, you might need to obtain a temporary registration for the new vehicle simply to drive it home.
If you are buying the vehicle from a dealer, the dealer will likely help you with the details, like paying the sales tax to the proper authorities and getting the registration and titling completed. But if you are buying from a private party, it is all on you.
If you plan to drive the vehicle back to your home state, you must be sure that both insurance and, if needed, a temporary registration are in place. If you will have the vehicle shipped to your home, you'll have to find a shipper that will do the job for you. Many auto transport companies are listed on the Internet, and should you purchase from a dealer, they might be able to help you find a reliable company. You should be aware that shipping a car can be an expensive proposition.
Every state has minimum car insurance requirements to be legal out on the road. When registering a car, you must show proof of Pennsylvania auto insurance. This means all motor vehicles out on the road in Pennsylvania must have liability insurance, this includes cars, vans, motorcycles, recreational vehicles, trucks, and buses.
As you consider these issues, keep in mind that buying the car from a private party will be different from purchasing it at a dealership, which can answer registry questions and provide the necessary paperwork. When you buy from a private party, you have to deal with these issues on your own.
There are other out-of-state buying concerns we don't cover here, such as prepurchase vehicle inspection and shipping. Follow the links at the end of this article for more information on those topics.
California has the strictest air quality standards in the nation, so most manufacturers build their vehicles to meet its regulations. Fourteen other states and the District of Columbia have adopted the standards set by the California Air Resources Board (CARB). Buying a car in any of those states means it will pass the requirements of all 50 states. However, some cars are still made only to be sold in non-CARB states. If you bought a new car in a non-CARB state, you might not be allowed to register it in a CARB state.
The states adopting CARB standards include Arizona, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington, as well as the District of Columbia.
There are many exceptions to registering non-CARB cars in CARB states. For example, here are the DMV rules and exemptions for registering non-CARB cars in California. Note that once a non-CARB vehicle has more than 7,500 miles, it is no longer considered new and can be registered in California, assuming it can pass the smog test.
Every car has a plaque that tells if it can be sold in California and, by extension, any of the other CARB states. The plaque is either on the underside of the hood or, in some cases, on the door jamb. The owner's manual will usually describe where the plaque is located.
However, if you are shopping remotely and need to know if the car conforms to CARB standards, you should ask the salesperson (or private seller if the car has been driven less than 7,500 miles) to confirm that it is 50-state compliant. If the seller seems unsure, request a photo of the vehicle's emissions plaque.
Often people mistakenly assume that they can save money by purchasing a car in a state that has a lower sales tax. The tax collectors are way ahead of you: You pay sales tax based on where you register the car, not where you buy it.
In some cases, the dealership where you buy the car will collect your state's sales tax and then pass it along to your home state. However, keep careful records that show you paid the tax to avoid having to pay it a second time when you register the car.
Some states also have what's called a "use tax" on vehicles brought over from another state. Take California, for example. Unless you purchased and used your vehicle outside California for at least 12 months before you brought it into the state, you would need to pay the use tax. The use tax will be based upon the purchase price of the car, minus the sales tax you paid to another state.
You'll want to verify that the dealership can handle the registration from another state. Dealerships often employ people trained in DMV rules or hire a third-party company to assist in the transaction. The dealer will give you a temporary registration to allow you to drive the car home. Ask how long the temporary registration lasts so that you know how much time you have. You don't want to be caught off guard if you're pulled over for an expired registration. Make sure you hang onto your sales paperwork in case there is a delay in the registration. It will have all the pertinent information you need when following up with the dealership or DMV.
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