The Insurify Guide to Buying a Car Out of State

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Shopping around for a new or new-to-you car is exciting, but also complicated. 

Your perfect car may or may not be easy to acquire, especially at a reasonable purchase price. In many cases, buying a car out of state might be the better deal, whether you live just across the state line or are looking for something in low supply. However, the rules of two states apply to an across-the-border purchase. Additionally, obtaining the right insurance for your vehicle while you transport it home can cause a bit of a headache.

This guide will help you make the right considerations when car buying in a different state, and save you time and money in the process!

Speaking of saving money, Insurify can find you tailor-made, low-rate quotes for car insurance in two minutes. Check it out today.

Finding the Best Car…and the Best Price

Several websites exist simply to compile listings of new and used cars. Cars.com and Auto Trader, for example, compile listings across the country and allow you to be hyper-specific with your search terms. You can also check out dealership websites and even Facebook Marketplace to find listings from private sellers.

With so many options out there, finding a great price for your new car may seem too vastly complicated to narrow down to one choice. Be sure to take your time during your shopping process. A great strategy is to make a list of must-haves and nice-to-haves. Knowing what you can’t live without will help you make sure you get what you need.

Once you have some models in mind, it can be very helpful to read through discussion boards on the vehicle. People often use them to ask and answer common questions about the car. This has the added benefit of showing you the kinds of maintenance typically associated with the car and will offer insight into your decision. In a similar vein, you should also check out reviews of any dealership you’re considering.

If you’re buying a new car, be sure to also visit the dealership website for information about rebates. These can potentially save you hundreds, even thousands versus buying in your home state. And don’t forget to research your trade-in if you have one. Knowing the worth of your old car will help tremendously during price negotiations.

Cars have different levels of demand depending on location. Four-wheel-drive vehicles are more popular in colder climates, while convertibles and sports cars are more desirable in warmer climates. Traveling to a place with lower demand for the vehicle you want will usually result in a better deal.

Bear in mind that, regardless of where you purchase your car, you will pay sales tax in your home state. So if you’re purchasing out of state simply to save on sales tax, it’s probably not worth it. In some states, like California, if you’re driving the car home yourself, you may need to pay additional sales tax in the state of purchase. Be sure to take any additional tax into account when calculating costs.

It’s also not a bad idea to compare how much insurance will cost on your new or new-to-you vehicle. Some makes and models cost less to insure than others, and this can affect your bottom line in a big way.

Special Considerations for Purchasing a Used Car

In my humble opinion, you should always obtain a vehicle history report of any used car you consider purchasing. The report will provide pertinent information, including any damage due to flood or accident.

If the previous owner brought the car to the dealership, all the details of maintenance and repair will also appear on the report. Some previous owners may even keep records of maintenance that can be provided. (Hint: this is a good sign.) You’re most likely to find records like these when purchasing from a private party.

A vehicle history report should be obtained through a third party like the U.S. Department of Transportation or CarFax. It is based on the vehicle identification number or VIN. Many dealers and private sellers will provide you with the report upon request. If you have any doubts about your dealer or seller’s integrity, you can obtain the report yourself. You may need to pay a small fee. The VIN can be found on the car, in a small window along the frame of the windshield.

In any case, be sure to compare the VIN listed on the title, and the vehicle history report if it’s provided by the seller, with the VIN that appears on the vehicle itself. Some unreputable dealers may use a duplicate VIN—taking the VIN from a car of the same year, make, and model, but applying it to the car that’s for sale. Typically this is to cover up undesirable information, like a salvage title.

Another common con is called “title washing.” This involves altering the title document to remove designations like “flood,” “salvage,” or “rebuilt salvage.” Because these words indicate serious damage in the car’s history, they should seriously lower the sales price. Title washing can also be done by transferring the title to a state that doesn’t use the same verbiage, thus removing the unwanted designation.

Vehicle Inspection

Generally speaking, you should never buy a car sight unseen. A pre-purchase inspection can help you detect information about vehicle damage not previously disclosed. Flood damage, for example, can often result in the quite specific smell of mildew in the vehicle.

During the inspection, you should examine several things, including but not limited to:

  • Tire wear: Is it even or uneven? How much tread is left on the tires?
  • Electrical components: Do they all work correctly?
  • Odometer reading: Does it match what was stated in the advertisement?
  • Body condition: How is the paint? Are there any dents, knicks, or scratches? Are doors easy to open? Do the doors squeak?
  • Glass condition: Any cracks or other damage? Do all the windows work properly?
  • Instrument panel: Do all warning lights glow when turning the ignition switch, but not starting the engine? Consult the owner’s manual (which should be provided) to be sure.
  • Rust: Are there any signs of rust anywhere, including under the vehicle?
  • Tailpipe: Is there any oily residue indicating that the engine is burning oil?
  • Under the hood: Are the hoses and belts new? Are there any signs of cracking? Are the fluids full and clean? Does the battery have a charge indicator? If so, what is left on the battery?
  • Test driveHow does the alignment feel? What noises does the car make? Does the steering wheel vibrate when stopping?

An in-person inspection also gives you the chance to verify the VIN, and verify that all the pieces of the car are original. Replaced doors, for example, will have a different VIN listed on them.

Finally, consider bringing your car to a trusted mechanic or even bringing one with you to inspect the car. Seasoned professionals will be able to spot issues that your eyes may miss. Hidden issues can make the purchase undesirable, but minor problems can be a bit of ammunition during price negotiations. Bear in mind that the dealer is not obligated to allow you to do this, though they do often perform their own safety inspection.

Two-State Considerations

All states require that vehicles be registered with their respective Department of Motor Vehicles. However, all states do offer a grace period between the date of purchase and the deadline for registration. Please check with your state’s DMV to learn more about this time window.

If you make your purchase from a reputable dealer, your salesperson will likely be able to provide you with accurate information about the state in which you’re buying. When you register at the DMV, you will need to pay taxes within your state, and you should receive an itemized receipt of fees.

Some dealers will collect sales tax at the time of purchase. In this case, you will need to show proof of payment when registering your new vehicle. Some dealers may also collect registration fees and mail you your license plate. This is more often the case when financing your purchase with a car loan. The dealership will also provide you with temporary registration, which will allow you to drive legally before registering your sale with the DMV.

Emissions standards vary from state to state, though California is the strictest. These emissions requirements are known as the California Air Resources Board (CARB) standards. 14 other states have adopted these standards, and if you purchase from one of these states your vehicle will likely already meet emissions standards. These states are:

Be prepared, in any case, to get an emission or smog test on your vehicle. The DMV may require it regardless of the state of purchase. In fact, it’s a good idea to contact your local DMV beforehand or at least visit their website. There you can learn about all the fees involved with registering your new vehicle, as well as the paperwork, like a bill of sale, you will need to provide in order to receive a new title.

Lastly, when purchasing from a dealer, you will need to provide proof of insurance before leaving the lot. However, even if you’re purchasing from a private seller, it’s a good idea to have the proper insurance on your car. Bear in mind that the state of purchase may have lower requirements than your home state. Your agent or state’s DMV website can provide you with this information.

Speaking of insurance…

Speak to Your Insurance Provider and Compare Insurance Rates

If you currently have auto insurance, be sure to speak with your insurance company about getting a policy that includes your new car. Your carrier may also provide some insight into your purchasing options. Be sure to ask for a quote before you decide to buy.

If you don’t have insurance, you’ll need to find a new policy. You can purchase it beforehand and set the start date of your policy for the day you purchase your car.

In either case, comparing car insurance quotes with Insurify can be very helpful. Even if your current insurance company offers a low rate, adding a new or different car to your policy could mean a lower premium somewhere else. In fact, any time there are small or large life changes, you should run a comparison check to be sure you are getting the best rate. But this is especially true when buying a car. 

If you do find a lower rate with another insurance company, you are allowed to switch even in the middle of your policy. And, most companies provide a full refund of any unused premium. You can learn more about switching insurance here.

Bear in mind that, even if you hire a company to transport your new car home, you may need to have insurance even during the transport. Be sure to speak with your agent before you make arrangements.

Bottom Line

While it is certainly more complicated, buying a car out of state can often make it easier to get a good deal. I was able to find my car for $2,000 less than the same year, make and model offered at dealerships within my home state. Yes, it takes time and a little more research, but these savings can make a big difference.

While finding the best deal on your next car is a complicated ordeal, finding the best rate for car insurance does not have to be. Check out Insurify and find your lowest rate today!

J.J. Starr is a financial copywriter and enjoys helping readers find the information they need. In addition to her background in banking and financial advising, she is also a poet with an MFA from New York University. She lives in Amherst, Massachusetts. You can learn more at jjstarrwrites.com.