BUY A CAR Out of State (Top 10 Tips) Kevin Hunter the Homework Guy
Searching for the best car deal? Great, but what happens when the best deal you find isn’t anywhere near you? In fact it’s miles away in another state? We’re here with the top 10 steps You Need to Know When Buying a Car Out of State, and the common hassles you’ll definitely want to avoid!
#1 Get a Vehicle History Report for Used cars
Before anything else, it’s critical to obtain a vehicle history report from services like CarFax or AutoCheck. These reports can reveal important issues such as past accidents, flood damage, and equally important, any liens against the vehicle. Ensuring these liens are cleared is essential because you don’t want to be stuck paying someone else’s debt. A lot of dealers actually have a link right on their website now with a free history report.
#2 You need an Independent Inspection on Used cars
Getting a Used Car checked by an independent mechanic cannot be emphasized enough. This isn’t just a quick look-over. This should be a detailed inspection covering everything from engine performance and safety features to electrical systems and the undercarriage. It’s best to find a mechanic who’s geographically close to the car but not too close to the seller to make sure they’re not buddies. In order for a proper inspection to be done, the vehicle has to be put up on a hoist.
#3 Handling Sales Tax
When it comes to taxes and state fees, listen carefully. In MOST STATES, You need to pay sales tax to your OWN state ONLY. Wherever the car will be registered, that’s where taxes are paid. The only exception to this rule is California, so if you’re from New Mexico and Buy in California, you’ll pay taxes in CA, drive the car home, and pay state taxes and fees again, in New Mexico. That’s the greedy Californians for you! Don’t buy a car out of state in California! So, in any other state, you have the dealer sell you the car and later you go to your OWN DMV and register and pay taxes. You can call your DMV before you leave to double check what you’ll owe so you can plan ahead. If you are NOT buying California but rather another state, be careful with dealers who insist that you must pay THEM. It’s happened plenty of times that the tax money never gets paid.
#4 Safety and Emissions Testing
Each state has different requirements for vehicle emissions and inspections. You’ll need to verify what inspections are necessary in YOUR home state—these could include emissions, & safety tests, and odometer verifications. Getting these done and obtaining the necessary certification is crucial for the registration process at your home state DMV. Make sure you do a little research in your own state.
#5 Temporary Registration
If you’re driving the car back yourself, temporary registration is a must. You can’t drive across the country without a legitimate plate or permit of some kind on your vehicle. Oftentimes, this can be obtained from the state where you bought the car, or in most states you can get a temporary travel permit from your home state website or DMV office. Ensure all paperwork is in order, like the sales contract showing the purchase price, with proof that taxes were collected if the collection was done by the dealer. You need evidence on dealer letterhead if you pay the dealer the taxes due in your home state. Don’t forget to do this in case the dealer engages in funny business. We’ve heard of dealers failing to actually send in the out of state tax payment far too many times, and the problem is that there’s no accountability and you’ll be stuck paying taxes twice unless you have a clear record that you paid them to the dealer.
#6 Insurance is also a Key Part of this
Insurance coverage is indeed another critical step. Confirm with your insurance provider about how new purchases are handled. If you currently have a full-coverage policy on one or more of your existing cars, your policy may automatically cover new purchases for a limited period of time (just ask your insurance rep to verify this is true); if not, you’ll need immediate coverage, especially if you’re financing the purchase. Knowing the insurance laws and ensuring you meet or exceed the minimum required coverage standards in your state is also vital.
#7 Get That Title
When it comes to the title, following up on it is everything. Most states require you to register your new car within a certain period—often 30 days—to avoid late fees. If the car comes from a dealer, they might assist with the out-of-state registration and paperwork. Be cautious with non-standard titles, like salvage titles, as these can complicate the registration process.
#8 Verify the VIN
A VIN verification is a simple but powerful step. You caen do this on sites like BeenVerified or by asking for an Autocheck or CarFax report. This step helps ensure the vehicle isn’t stolen and also that it matches the make and model the dealer has advertised. This process can sometimes actually be required by your state DMV as part of the registration process.
#9 Understanding the Full Cost
Crunch the numbers thoroughly. Use the OTD templates we have on our website thehomeworkguy.com and make sure you know what you’ll be paying in writing. Consider the purchase price, taxes, registration fees, and any potential travel costs for picking up the car. These expenses can quickly add up, potentially offsetting the savings from buying out of state. If you’re having it shipped to you, that’s another expense to consider against the value of what you’re saving.
#10 Test Drive Locally First
Even if your heart is set on a specific car, try to test drive a similar model close to home. You must know that you actually like the vehicle you’re after and that it fits you well. This gives you a clear idea of what to expect and helps confirm whether the out-of-state hassle is even worth it.