Cheapest State to Buy a Car

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Which is the cheapest state to buy a car? This is the question everyone considers when buying a car apart from the other important things. It appears that the cost of the car is more important than most of the things. Hence, many people like to buy a vehicle from outside the state.

Let’s be honest, it is cheaper to buy a car from states like New Hampshire or Florida as compared to California or New York. That’s because some states have additional sales tax along with other fees. This article helps you to find out more about the cheapest state to buy a car, and why.

What are the factors that affect the cost of a car?

You may think that the price of Toyota Corolla should be the same in New York as it is in Florida or California. But, that isn’t the case always. States have the right to levy taxes and fees on auto sales. As such, the prices of the same car can change drastically.

It may be cheaper by a few thousand across state lines. If you know the best state to buy the car at a cheap price, it can help you save money in the prolonged run. This way, you can get the most out of your hard-earned money.

However, there are some factors that affect the cost of a car. And, this is what makes some states cheaper than the others when it is about selling cars. One of the biggest factors is the initial cost of the car. On average, you’ll find that Florida is the best state in terms of the initial price of a new car.

The prices of cars are around 10% less in Florida than the rest of the country. Other things to consider while finding the cheapest state to buy a new car are the taxes, fees during the purchase, and cost of insuring the new vehicle.

What are the benefits of buying a new vehicle out of state?

There are certain advantages when you are thinking to buy a car across other states in the country. There are many states that provide cheaper solutions to buy cars. Hence, be sure not to look at only one or two states. You got a whole country to do a search.

Buying a car from outside your state is great when you can’t find the exact model locally. There are some benefits when buying from other states, but it may turn into a nightmare if you don’t perform thorough research before finalizing the purchase.

Don’t limit your search to the state where you belong. Remember that car prices depend on the location where they are manufactured. You can find the same model at a relatively low price in another state as compared to the price your local dealer is asking.

When you expand your search, you can find more prices to compare. In this way, you can find many ways to save money. Keep in mind that you can save more money when you buy a car out of your state from private owners, dealers, and other auto auction companies.

You may think that auction cars are damaged beyond repair. This is not always true. Many auctions include cars that are in good condition after these are reprocessed. However, before you make the purchase, make sure to do a proper inspection.

You need to consider the estimated sales tax as well. As you know, buying a car out of your state may get complicated. You should have a proper understanding of the state requirements. And most importantly, you have to consider the costs incurred while bringing the car to your home.

Things you should consider prior to buying a vehicle out of state:

  • Insurance – There are some insurance companies who provide you with extended coverage of your current car to the one you are planning to buy. However, you need to intimate them before a certain period of time.
  • Emissions – The car you are about to buy may do well with the standard emissions levels in the state where it originates. But, it may not pass in your state.
  • Registration – Want to drive the new car home? But first, you need to register the car. The dealers will help you out with the registration process. But, when a private seller is involved in the buying process, you should verify the documentation from your local DMV, and apply for temporary registration. The DMV makes sure whether the car was stolen or not.
  • Sales tax – This kind of tax is usually payable in the state in which the registration of the new car takes place. New Hampshire, Oregon, Delaware, Alaska, and Montana don’t require sales tax. Check with the local DMV for all the details relating to the registration policy.
  • Transporting your car home – A temporary registration is a must for driving the car back to your home. You can also ship the new car through a reputed transportation company. There are many auto dealers who have close connections with the shipping companies.

The cheapest states to buy a new car:

Now that you have a clear understanding of what to search for, let’s discuss the task of locating your car. Buying would benefit you, but don’t rush into things. Remember that if you have a specific model, find where it is manufactured.

Keep in mind that buying a car is more than the sticker price. You have to consider the maintenance fees and associated insurance needs. Fees tend to differ from one state to another. But, New Hampshire is the most affordable one. Why?

Because you don’t have to pay a sales tax after you buy the car. That’s where you save most of the money upfront. However, similar rules apply to Oregon, Delaware, Montana, and Alaska. You need to pay a one-time fee of $25. Insurance is pretty affordable and the repair costs are very reasonable.


So it is seen that New Hampshire is the only cheapest state when it comes to buying a new car. Because there is no sales tax and very low registration fees. Make sure to consider the required factors before signing the deal.