Guide: Buying a Car out of State – Essential Information
In theory, buying a car out of state is straightforward and opens up all sorts of purchasing options. After all, buying an out-of-state car allows you access to vehicles that you might not be able to get in your home state; it may also give you the chance to buy common models for cheaper.
In practice, however, buying a car in another state can be complicated. Exactly how difficult buying a car in a different state is depends a lot on where you live.
The rules on how to buy a car out of state vary significantly across the US. California, for example, has the strictest emissions control regulations in the country, so most manufacturers will build to those standards.
Image Source: Buying a Car out of State
However, older vehicles or those from small manufacturers, however, may not meet those requirements. It’s important to be aware of these differences, especially when buying a used car out of state from a second-hand dealership, private seller or auction.
It’s not just emissions laws you have to worry about; every state has its own rules on safety inspections, registration, ownership titles, and insurance for purchasing a car out of state. There are also differences in sales tax to consider, all which, when combined, can make buying a car from another state intimidating, especially if you’re doing it for the first time. Here is a breakdown of the most important elements to consider:
- Emissions/smog checks
- Safety inspections
- Title and registrations
- Sales taxes
- Insurance
We will take these parts of the process for buying a car out of state, address them one at a time, and provide detailed advice on how to deal with the challenges. We will also provide resources for people considering buying a car in a different state to smooth the process for them and avoid problems.
Furthermore, this review will highlight the advantages and disadvantages of different purchasing options – whether buying a car out of state from a dealer, at auction or privately. Finally, we’ll help you to decide if buying a car out of state is really for you.
See Also: Finding the Best Auto Loan Companies and Auto Lenders | This Year’s Guide
Buying a Car out of State: Getting Started
Before considering the technical hurdles, there are certain thing you should consider carefully before buying a car in a different state:
- Decide in advance exactly what car you want
- If buying privately from a dealership, confirm the details with it
- Ensure the vehicle is exactly as advertised
- Consider whether you will travel to pick up the car or have it delivered
Travelling to another state can be an expensive, time-consuming trip that will be wasted if you do not buy anything in the end. Therefore, you should definitely know what you’re buying and have arrangements in place before making the trip. In addition, direct contact with the seller before the trip will ensure that you have all the necessary paperwork with you and that there are no last-minute complications. A trip wasted due to unforeseen problems can usually be avoided.
This is especially important if you’re buying a car out of state from a private seller or at an auction. You may have to deal with more of the paperwork yourself and there are not likely to be guarantees about the condition of the car. Buying a car in another state is risky in this situation, so having as much knowledge about the vehicle as possible is recommended.
One last consideration before buying a car in another state is how to collect it. The simplest but often most difficult method is to travel and collect it yourself. This usually involves temporary tags and registration documents when buying a car out of state from a dealer. A private sale might require you to apply for these yourself, however, as well as proof that it meets emissions requirements.
Don’t Miss: How to Get a Credit Union Car Loan |Guide | Best Credit Unions for Car Loans
Buying a Car out of State: Emissions Requirements
Most car manufacturers will build new vehicles to match the emissions standards set by the state of California, which has the strictest regulations in the US, thus making them eligible for sale in all other states. This may not be the case when buying car in another state, however, if it is an older model or from a niche manufacturer.
In approaching how to buy a car out of state when you are not sure if this applies, the first stop, as previously mentioned, is the seller. He or she should be able to verify if the car meets emissions standards for your state which has adopted one of two systems depending on what the state government chose.
You may need to research these standards yourself: the federal standards are used in most states, but a few follow the stricter California standards and the DMV provide a useful tool to help you determine which ones apply to you. Confirm what tests the car has passed before buying a car from another state, and you may save yourself trouble later.
One simple method to check if it a car is road legal when buying a car in a different state is to inspect the underside of the hood. If it has been certified, it will have a plaque attached that states that it is 49-state, 50-state or California certified. The latter two show that it is legal for all states while the former option does not meet California standards.
If you are suspicious of the legitimacy of the plaque when buying a car out of state from a dealer or private seller, you may want to have it formally inspected anyway. Note that in rare cases, the plaque is located in the door jamb instead of the hood, but the owner’s manual should tell you if you’re unsure.
If buying an out-of-state car that doesn’t match your state’s requirement, you should arrange to take it in for a smog check as soon as practically possible. The DMV should be able to help you make the necessary arrangements, which should be in place before purchasing a car out of state, if that’s possible. Alternatively, find a licensed pollution inspection station near you and make an appointment for a smog check there. A simple Google search will help you to locate the nearest one.
All-in-One Change Management Tools
Top Rated Toolkit for Change Managers.
Get Your Change Management Tool Today...
Buying a Car out of State: Safety Inspections
Basic safety inspections involve similar arrangements as the emissions checks are often carried out at the same time. The standards between states differ much more, however, so you should be aware of these when buying a car from another state. Some require a safety inspection before titles and tags are awarded while others only require annual or biannual inspections afterwards. Still others don’t require inspections at all, which you should be wary of when buying a car in a different state.
Image Source: Basic Safety Inspections
The DMV tool that shows the emissions standards in various states will also help with safety inspections, so take advantage of it to make sure you are properly informed. Regulations may change from year to year in small ways, so it’s essential to remain up to date before buying a car in another state.
For obvious reasons, this is especially important when buying a used car out of state. It is often difficult to know what kind of damage a used car will have until it’s been thoroughly inspected, so be sure to do this. Consider also only buying from reputable dealers and getting a warranty that will cover in the event of any unforeseen problems. Purchasing a car out of state without some kind of proof of safety inspection is not only risky from a financial perspective – it can also be very dangerous if you intend to drive it.
Experts warn buyers to be especially wary of this problem at public auctions, as these are usually the last resort for car dealers to shift cars they can’t otherwise sell. Some may also try to hide safety problems until after the sale or otherwise fail to inform a buyer purchasing a car out of state about something important. If buying an out-of-state car at an auction, be sure to arrive early and give your chosen vehicle a thorough inspection before bidding.
Related: Finding the Best Subprime Auto Lenders & Companies | Guide | Bad Credit Auto Loan Lenders
Buying a Car out of State: Title and Registration
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. If buying a car out of state from a dealer, he or she will usually handle the temporary title and registration paperwork for you.
This will allow you to drive the car immediately and register it with the local authorities in your home state later. If buying at an auction or from a private seller, however, things get a lot more complicated.
In most cases, when buying a car in a different state from a private seller, you’ll need to handle the temporary paperwork yourself. This usually involves a complicated and delicate balancing act between the motor vehicle authorities in both the purchase state and your home state.
This might be further complicated by the differences in how these authorities operate. A best-case scenario when buying a car out of state, in this situation, is that you’ll be able to get the temporary documents from your home state before the purchase.
It is vital to leave room for possible complications at this stage, as this is where they are most likely to occur when dealing with a private seller. If you suspect this will be the case, it may simply be best to avoid buying a car in another state altogether or sticking only to reputable dealers.
In the event that you do go ahead with this process, however, the DMV provides useful information on how to approach it state by state.
Bear in mind that purchasing a car out of state privately requires you to address the title and registration documents separately. These resources are also useful for finally registering the car once in your home state, so refer back to them at that stage too.
Buying a Car out of State: Sales Taxes
Something not many people expect is that, when buying a car in a different state, you must pay the sales tax for your home state – not the one it was bought in. This can get confusing, but as with the registration process, buying with a reputable dealer simplifies the process.
Buying a car out of state from a dealer will usually result in the bulk of the paperwork being done for you, and he or she is often willing to help you work through what you still need to do.
Nevertheless, you should keep proof of the tax payment to show the authorities in your home state, in case they request it. Dealers will sometimes calculate tax based on their state, instead of yours, so be prepared to cover the difference yourself later if your home state taxes are more.
Just as before, buying privately complicates things. In most cases, you’ll need to pay your sales tax when you register the car with your homes state’s authority.
You can’t save money on a car by simply buying from a state with lower sales due to this, though you may still find the vehicle’s retail price is lower in some places than in others.
Preparation before buying a car in another state should include calculating your state’s sales tax as it applies to this sale, which lets you know how much you’re really spending. Many sites offer tax calculators to make this process simpler.
Once again, the DMV provides useful information for the process of calculating and paying the tax for buying a car from another state that you should check. If you’re buying on a fixed budget or you’re aiming to save money by buying a car in another state, this can help you work out how to make the most of it.
Popular Article: How to Refinance a Car Loan | Guide on Auto Loans & Financing a Car
Buying a Car out of State: Insurance
Regarding your insurance, the best practice is to call your insurance company to get advice directly from it on what to do.
Every state requires some kind of insurance before you can legally drive a car, so this is vital if you’re going to pick up the car from another state yourself. Some insurance companies do provide a clause that covers buying a car in a different state specifically, so, in this case, you should be able to drive immediately.
Many do not, however, and require you to purchase insurance specifically for this purpose.
In the case that your insurance covers buying an out-of-state car, it most likely will only do so for a certain period of time. Make sure you are clear on how long this is before the purchase, in order to prevent any nasty surprises. If your insurance doesn’t provide coverage, then, as with any car insurance, be sure to shop around for a good deal that covers your needs out of state. The DMV, as usual, is very helpful here and is a must-have resource for this – whatever your current situation is.
Conclusion
The essential questions of whether and how to buy a car out of state are highly dependent on your specific needs and situation.
There’s no question that it can be a complicated, difficult process for the inexperienced, so you should be sure of what you want and can expect before proceeding. In most cases, buying a car out of state is only recommended if you have very particular needs that cannot be met in your home state such as when buying a rare car.
If you do decide to go ahead with an out-of-state purchase, preparation and a clear understanding of what you’re getting into is key.
Buying a car out of state from a dealer is the safest, simplest way as most of the necessary checks and paperwork are handled for you.
Buying from a private seller or at an auction is only recommended if you are experienced in the processes and knowledgeable about cars, due to the heavy risks involved.
Read More: Online Auto Loans: How to Find the Best Car Loans Online | This Year’s Guide
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.