Buying a Car Out of State

Are you thinking of buying a car out of state? There are four main factors to keep in mind when buying a car out of state: researching the price, knowing the emissions regulations in your state, sales tax rules, and registration requirements. 

Jump to:
Price comparisons
Emissions regulations
Sales tax collection
Registration requirements
Pros and cons of buying a car out of state

As you consider these issues, keep in mind that buying the car from a private party will be different from purchasing one 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, insurance and shipping. Follow the links at the end of this article for more information on those and other helpful topics.

Price comparisons

Compare the prices in your area with those in the closest state. You can use Edmunds' new car inventory or used car inventory tools to cast a wide net. Prices will vary significantly from one area to another, so you need to determine if the money you're potentially saving is worth the time and hassle of traveling to another state. Different cities and states will have lower or higher prices based on the market. Places with lower demand can mean lower prices, and dealer incentives can work in your favor. Similarly, if there is a high demand in a certain area, the prices will not be much different than what you're seeing close to you.

It's important to note that the dealership fees can vary from one state to the next. These fees may cut into your potential savings if you're not careful. Take a look at our related story "What fees should you pay?" for more information on how they can vary by state.

Checking emissions requirements

Emissions requirements will vary from state to state. Check the laws in both your state and the information on the vehicle's emissions plaque to be sure you'll be able to register it at home. California has the strictest air quality standards in the nation, so most manufacturers build their vehicles to meet its regulations. Nineteen 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 only made to be sold in non-CARB states. If you buy a new car in a non-CARB state, you might not be allowed to register it in a CARB state.

The states of Arizona, Colorado, Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, as well as the District of Columbia, have adopted CARB standards.

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.

Regulations vary, so check the website for your state's DMV or registry of motor vehicles to see the laws that govern the registration of out-of-state vehicles where you live.

Locating the emissions plaque: 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 doorjamb. 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.

Sales tax when buying a car out of state

Whatever the fees are where you find the car, you're going to have to pay sales tax, and possibly a use tax, in your own state. Make sure you take taxes into account before moving ahead with the transaction. 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. But if you're lucky enough to live in a state with no sales tax, you won't pay anything even if the state where you bought the car does have sales tax.

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.

If it's a private-party sale, the DMVs in most states collect sales tax when you register the car back home. Sales tax is a percentage of the purchase price of the car, as reported on the bill of sale. Note that the DMV may verify the vehicle’s value with one of the standard valuation tools, such as the Edmunds appraisal tool.

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 on the purchase price of the car minus the sales tax you paid to another state.

Make sure to brush up on these sales- and use-tax issues before making the purchase.

Registration requirements

This is another area that varies considerably. Some states make registering your vehicle very simple, while in others, you'll need full safety and/or emissions tests before you're allowed to register the vehicle. Be prepared.

If purchasing from a dealer, 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.

When buying a used car from a private party, there's a bit more to keep track of. The seller should give you a signed title so you can prove you are the new owner. Some states also require a bill of sale from a private party to certify the transfer of ownership. It will contain specific information about the transaction, such as the car's VIN, mileage, buyer and seller details, and purchase price. Bill-of-sale templates can be found online. Note that Florida and Michigan are not among the states that require a bill of sale.

Depending on your state's laws, you may also need to apply for a temporary registration so you can drive the car home and complete the registration process. Once you're back in your home state, the DMV may need to give the car a safety inspection to ensure that the brake lights, seat belts, and other important items are in working condition.

If your home state requires a smog certification before registration, this is your responsibility. It's smart, however, to ask the seller for proof that the vehicle has recently passed a smog test so you can see if it is likely to pass in your state. Refer to the earlier section on emissions to verify its CARB status. 

Check to see if your home state has a time limit for registering a vehicle. In many cases, you’ll have to register it within 30 days of purchase or pay a fine.

Pros and cons of buying a car out of state

Pros:

• You might save money

• Convenient online shopping

• Wider selection of vehicles

• Access to special models

Cons:

• Can't avoid sales tax

• More complicated

• Need to get it home

• Might need safety and emissions tests

To sum up: Because of potential tax and registration problems, it's always easier to buy a car in your home state. However, if you are a bargain shopper or someone looking for a rare vehicle, the entire nation can be your car lot. Just make sure you understand important issues such as emissions requirements, sales tax and the registration process before you seal the deal.

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Car Buying from a Distance
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