If you’re thinking about buying a car in another state, make sure you understand everything involved in this type of purchase. Although you may be able to save money or find a very specific vehicle that is not available locally, you can incur additional costs without careful planning. Steps in this process include:
- Getting a vehicle history report.
- Having an inspection.
- Paying sales tax.
- Obtaining required safety and emissions test results.
- Registering the car.
- Insuring the car.
- Obtaining the title.
Reasons To Purchase a Car Out of State
According to Credit Karma, you may want to think about buying a vehicle from a dealer or owner in another state if you are seeking a vintage or rare make and model, cannot find the features you want at a local seller, or have found a great deal from a seller in another state. For example, different states may use different standards to value vehicles and the cost also fluctuates depending on regional supply and demand. You should weigh these factors against the challenges associated with purchasing an out-of-state vehicle, such as transportation, insurance, inspections, registration, and sales tax.
Considerations When Buying an Out-of-State Vehicle
Preparing yourself for the complexities of purchasing an out-of-state vehicle can help you avoid hassles and additional costs. According to Carfax, you should pay sales tax to the state where you will register your vehicle (where you live), not to the state where you bought the vehicle. However, you may need to obtain a temporary registration card from the state where you purchased the car if you plan to drive it back to your home state.
You should also make sure the car meets the emissions standards of your home state, not those of the state where you purchased the vehicle. For example, if you live in California, a car purchased elsewhere may fail the stringent emissions testing protocol of your home state. Some cars have a label indicating that they are manufactured to meet the emissions testing standards of all 50 states.
If you buy a car from a neighboring state, it’s easy enough to drive it back home. If the purchase is across the country, however, shipping the car to you may negate any potential savings you earn from buying an out-of-state vehicle. If you are working with a dealership, they may have contacts that can help you ship the car home at a reasonable price.
Steps to Buying a Car Out of State
First, obtain a vehicle history report for the car you plan to purchase. This report will provide information about red flags that will either keep you from buying the car or affect your negotiations. For example, if the car title has liens, these should be satisfied before you try to transport the vehicle back to your home state. Otherwise, you may be legally responsible for those liens according to The Balance.
Have a thorough inspection done by a mechanic before buying a used car out-of-state. Opt for an independent professional rather than a person who is recommended or employed by the dealership. If the car is several states away and you cannot travel there, you may ask a local mechanic to act in your absence.
After you get the vehicle back to your home state, you must pay sales tax on the vehicle. A local dealer you trust, your tax professional, or your local department of motor vehicles can typically provide guidance on this issue.
Your state’s department of motor vehicles can also provide information on the required inspection tests for your new car. Depending on state laws, this may include odometer, emissions, and/or safety testing. After your vehicle has been inspected, visit the DMV with the inspection certification, your sales paperwork, photo identification, and proof of address. These documents will allow you to register the vehicle and obtain the title.
Make sure you find out the time limit for registering the car in a new state. In many cases, you must complete this step within 30 days of purchase or risk fines and other penalties. U.S. News and World Report notes that if you work with a dealer in another state, he or she may help you complete the required registration paperwork. You may also need to provide a vehicle identification number (VIN) verification form. This document allows your home state to ensure that the car is not stolen property.
If the vehicle requires a salvage title or other type of non-standard title, check the requirements in your state for this type of title before finalizing the vehicle purchase. The cost of the title and the amount of time you have after purchase to obtain the title also vary by state.
According to Auto List, the provisions of your auto insurance policy determine whether you have to have insurance coverage on the new vehicle before you buy it or after. Some insurers cover new vehicle purchases for a specific amount of time even before you add the auto to your policy. If your policy does not include this provision, however, you’ll need to get coverage right away. In addition, if you are taking out a loan to purchase the car the lender may have specific insurance requirements you must have in place before the loan will be funded.
Before buying a car, get a quote to insure the vehicle from your existing insurance company. Review the insurance laws in your home state to meet the legal minimum coverage standards. The lender may have additional requirements if you finance a vehicle.
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 the 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.
List of Sources:
https://www.creditkarma.com/auto/i/buying-car-out-of-state/
https://www.carfax.com/blog/buying-out-of-state
https://www.thebalance.com/buying-a-car-in-a-different-state-4148015
https://cars.usnews.com/cars-trucks/your-guide-to-buying-a-car-out-of-state
This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io
