How to Buy a Car from Another State

Sometimes you need to broaden your horizons when buying a car. The selection available in your state might be poor or inventory is low, so looking at neighboring states may open up the door to more options. 

You could save money on the make or model you’re looking for or bargain with a dealer who has surplus stock. Either way, it can be a good way to save. But although the vehicle you find might be cheaper, there will be other costs that arise when choosing a car in a different state that needs to be considered.

Buying a car from out of state: The pros 

Looking outside your current state, especially if you live in an area where dealerships are few and far between has its pros. Here are some of the advantages of buying a car from out of state:

1. More choice

There is a strong chance that by widening your search area to different states, you’ll have a larger range of cars to choose from. The 2022 NADA data report shows there are 16,773 new car dealers in the US, with a further 20,000+ private or used car dealerships. 

As an example of the choice of dealers per state – if you live in Oklahoma, you have the option of choosing from 252 car new car dealers. But if you cross over south into Texas, there are a further 1,239 dealerships to choose from.

2. Affordability

Different states are likely to have different prices, with the cost of a car often coming down to its popularity. You could secure a better deal on a vehicle that's less popular in that state.

Buying a car from out of state: The cons 

Complications may arise when buying a car from out of state. For example, you might not be familiar with how things work there, and the documentation could prove tricky. Here are some drawbacks of buying a car from out of state:

1. Bringing it home

Although you might find the overall price of the car to be less, you need to factor in getting it home. Whether it’s delivered by the dealership, or you have to drive it back yourself, there will be fuel costs or the cost of delivery.

2. Complicated

Out-of-state car buying can also be more challenging. For instance, you will need to acquire a temporary registration if you intend to drive the car home. Usually, a dealership will handle this for you. However, you may need to deal with the Department of Motor Vehicles (DMV) in either your home state or the state where the transaction was made, and this too can be complex.

How to buy a car from out of state

Before committing to buying a car from out of state, here are the steps to help you understand the process.  

1. Understand the cost

Make sure you aren’t paying over the odds on a car. It is possible that some dealers may up the price significantly in hopes that a customer won’t notice. There are resources like the National Automobile Dealers Association where you can get a better understanding of a fair price. Do your own research and compare makes and models to ensure you’re getting a good deal.

2. Review the vehicle history

Every vehicle should have a detailed history report (if buying a used car or secondhand) that documents any accidents or maintenance issues. Ask for and review these documents. You can also prepare to have a technician or mechanic assess the vehicle before you buy it for peace of mind and in case any faults have not been listed by the dealership or seller.

3. Contact your local DMV 

Each state has varying safety and emission testing requirements. To ensure you know the requirements for your new car, contact your local DMV. If your car fails any of the tests, you’ll need to address them before you can complete the buying process.

4. Verify documentation requirements

Documentation required to purchase a car also varies from state to state. Again, contact your local DMV to see what paperwork is needed before you can complete your purchase. You may also find that you need a temporary registration if you’re driving the vehicle back home yourself. 

5. Register the car

If you’re satisfied with the car's history and you’ve had a third party assess the condition, you can proceed to the next steps confidently. Now it’s time to register the car in your state. To do this, take the mechanic’s report, bill of sale, driver's license and proof of address to your local DMV so it can be registered under your details. At this point, you’ll receive your registration and license plates.

6. Pay state sales tax 

Just because you’re buying a car out of state does not mean that you are exempt from paying taxes. Again, each state’s tax rates may be different, so do your research. Don’t skip this step because could qualify for tax credits. 

7. Insure the car 

If you’re planning on driving the car back to your home state, make sure the vehicle is insured alongside having a temporary registration. Find a policy that works for you, then consult your insurer about your out-of-state purchase. Some insurers may allow you to drive the car without first registering it on your policy, so check with them first to ensure you have the necessary coverage. Also, if you’re buying this car with an auto loan, contact your financing provider to ensure there are no specific requirements set by the insurer.

8. Complete the purchase

If you and the seller are happy, you’ve had someone look at the vehicle, assessed the car's history, contacted your local DMV, and taken care of any insurance or registration needs, you can now drive back to your home state in your new car worry-free. 

The car subscription model 

It can get complicated to buy a car from a different state, and as shown above, there are a lot of legal technicalities that you have to abide by before making a purchase. 

If you want to drive a new vehicle without all the aforementioned hassle, then consider FINN – a car subscription service that makes getting a new vehicle easier than ever. Simply find the car you want from our wide selection, and we’ll run a basic credit check (with no impact on your score), get you approved in minutes, and then schedule your delivery. You’ll make one monthly payment that includes insurance and roadside assistance. That’s it – no long trips across the state or the hassle of visiting your local DMV.

Final thoughts

You should now have a decent understanding of how to buy a car from a different state. It can open up the door to new makes and models, or even help you secure a bargain buy.

Each state has different requirements you have to satisfy before you can drive your car back home. For example, you need to have a mechanic assess the car, and also check what safety and emissions testing the vehicle needs before proceeding to buy.