7 Steps for Buying a Car out of State
You found a great deal on the perfect car. There’s just one issue – it’s in another state.
Don’t fret, you can move most cars from state to state, but you’ll have to do your homework and be prepared to write a few checks. You’ll have to address the car’s title, registration, taxes, insurance, and vehicle inspections to ensure that your transaction passes legal muster.
Your first task is to make sure it’s a great deal. If you’re planning to buy a new car based on a manufacturer-provided financing or new car lease deal, you will need to make sure that it is available to you. Some deals are restricted based on where you live, not the location of the dealer, while others are restricted to certain dealers, and you can take the car anywhere.
1) Get a Vehicle History Report
Buying a used car across state borders can be trickier than buying one in your home state. Your first step should be to order a vehicle history report from a company such as Carfax. If there are any red flags on the report, they should be addressed before you take another step toward buying the car.
You should pay particular attention to any liens listed on the report, and make sure they are satisfied before you attempt to move the vehicle to another state.
2) Prepurchase Inspection Is Mandatory
If it is just across the state line, you can test drive it and find a local independent mechanic for a prepurchase inspection. If it’s halfway across the country, you will either have to travel there to drive the car and have it inspected or find an independent party to do it for you.
Consider the cost of the car history report and prepurchase inspection inexpensive insurance against buying a vehicle that is unreliable, unsafe, or in need of major repairs. If you’re a AAA member, you can find AAA-approved mechanics in the area where you are shopping who may be able to perform the inspection on your behalf.
Even if it is a certified preowned vehicle that the dealer claims is fully inspected, you should still have an independent party evaluate its condition. If you plan on having the car shipped, be sure to include the transportation costs in your budget.
3) Pay the Tax Man
Though some states have no sales tax, don’t expect to be able to buy a car there and take it to a state that has sales tax without paying the taxes. The jurisdiction where you will operate the car will require that you pay any applicable taxes and fees.
Usually, you will have to do so before the state will allow you to register the car. Check with your local department of motor vehicles, a tax advisor, or a local dealer to determine the tax rate you will be required to pay.
Buying a new car from a franchised dealer can make buying from another state a fairly simple process, with some notable exceptions. The dealer should be able to take care of much of the paperwork and may even be able to collect the sales taxes on behalf of the state the car is destined for.
4) The California Conundrum
One of the biggest exceptions to the new-car-is-simpler rule is for cars destined for states with strict emissions rules, such as California. In most cases, a car with fewer than 7,500 miles on the odometer is considered by the State of California to be new.
You will either have to prove that it was built to meet the California Air Resources Board’s strict standards or prove that it has been modified to meet their criteria. Depending on the car, the modification can be simple and cheap, or very expensive.
When your car arrives in the new state, it will have to be registered and titled. In some cases, the selling dealer will take care of this process (with a temporary registration, at least), but if the dealer doesn’t or you buy from a private party, you will have to manage the process.
5) Get Those State Inspections
You’ll want to visit the website of the destination state’s department of motor vehicles to determine whether your car is subject to state safety, emissions, and/or odometer inspection requirements. Then you’ll have to visit a DMV office with all of your sales, financing, and inspection paperwork in order to get a title and registration.
Keep in mind that most state DMVs require at least one piece of government-issued photo identification, plus proof of address (such as a utility bill), before they will conduct business with you.
6) Title and Registration
You will be required to pay for the new title and registration for the new state, even if you had years left on the previous state’s registration. Be sure to find out how quickly you have to register in the new state, as it could be as few as 30 days after moving the car into the new jurisdiction.
A new title will be generated by the state where you will operate the vehicle. Different states have different title branding standards, so a car that does not require a salvage title in one state might require one in a different state. If your car does require a salvage or otherwise branded title, it will likely to be harder to insure and finance.
7) Get It Insured
Finally, you will want to check with your insurance agent and lender before you purchase the car to determine what insurance you will need and what the limits and deductibles should be. Requirements vary by state, and different lenders can demand a certain amount of insurance to protect their collateral.
In some cases, your insurance company will provide you with a grace period to get new insurance under your existing car’s policy. However, if you don’t have any current car insurance, or the value of the car you are buying is dramatically different than the value of car on your current policy, you will want to have a new policy in place before you take possession of your new or new-to-you ride.
More Shopping Tools From U.S. News & World Report
Crossing state lines might be the most challenging part of your car buying adventure, but you shouldn’t forget the basics of car buying along the way. You’ll want to have your used or new car financing worked out early in the process, and if you are looking for a preowned vehicle, you will want to be well-versed in things for look for when buying a used car.
U.S. News & World Report offers a plethora of resources for car buyers, including new car rankings and used car rankings where you can see how the cars you are considering stack up against their peers. You can find hundreds of the best new car lease and financing deals on our site each month, alongside incentives on used cars.
Our Best Price Program can also save you money. You can get a pre-negotiated price on your car at a local dealer. On average, buyers have saved more than $3,000 off MSRP using the Best Price Program.
In addition to savings off MSRP, getting the best interest rate on your car loan can save you thousands. Compare rates from up to four lenders with myAutoloan to get the best deal.