Buying a new car can be a hassle regardless of whether you buy from a dealership or a private seller. Both car purchase methods have their own set of pros and cons. Still, dealership purchases often make car buying less of a hassle overall. Things like sales tax, temporary registration, insurance details, and finding a lender for a potential loan are often taken care of by the new or used car salesman. At the very least, the dealership often assists with these items.
Buying a used car from a private party forces the individual buyer and seller to sort out all of the details involved in the car purchase. Despite this, a significant benefit of a private vehicle purchase is that car pricing is often lower than what a dealership would ask for the same car.
All of these things make car buying methods a matter of preference, but buying a car out of state is a choice that the customer must carefully make since many of the factors surrounding an out-of-state vehicle purchase are more involved than a home state purchase.
A private party purchase of a vehicle from a different state can be complicated because things like state tax, emissions standards, safety inspection regulations, and even insurance can vary drastically from state to state. These factors can even cause the purchase price to be higher on an out-of-state vehicle than one bought in your home state. But, being aware of what you need to do to complete a new vehicle purchase across state lines will make the process easier.
Why Buy From out of State?
Although it is harder to buy a new car from a different state than your home state, there are several reasons you may want to do so. The simplest of these is that you have a specific vehicle model in mind that you want or need, and it is not widely available or available at all where you live.
A few others reasons this makes sense include buying a vehicle from an out-of-state family member, finding a fantastic deal, or preferring a car with less wear-and-tear. Buying a car out of state will not always be such a pain that good deals and good reasons to buy cannot override the hassle involved.
On top of this, things like Facebook Marketplace, eBay Motors, Carfax, AutoCheck, and a host of other car-buying resources make the additional steps much more bearable. Once you determine that you want to buy a car out of state, you must take several important steps to ensure the legality of your purchase and the ease of transition.
Vehicle History and Inspection
The first thing you should do when you find a new or used car that interests you is to run a vehicle history report. The most common vehicle history resource used is Carfax, but AutoCheck, Kelley Blue Book (KBB.com), autoDNA, and other resources are available as long as you have the vehicle identification number, or VIN, of the car you are looking to purchase.
Some of these sites offer free reports, but they are not as in-depth as paid vehicle history reports. Most fee-based reports cost less than $50 and are well worth the price for the information they can reveal about a car. These reports include insurance insurance-reported accidents, odometer readings, vehicle maintenance history, and liens that the private party seller might not report.
After a vehicle history check is purchased or reviewed, a good next step is to test drive the vehicle yourself and have an independent local mechanic look the prospect vehicle over. Good private sellers will not have issues with either of these things but beware of those who are hesitant to allow either of these things to occur.
A good vehicle history report, a problem-free test drive, and a clean inspection will reassure you that your vehicle purchase is worth the drive across state lines.
Getting Insurance Together
Getting everything needed to insure a vehicle may not be the first step in an out-of-state vehicle purchase or even a vehicle purchase in general. Still, it is imperative to understand and anticipate what you need to do to drive the car back to your home state after the purchase is complete. Calling your insurance agent will be the easiest way to find out what you need to be covered.
Insurance companies, lenders, and states are all different when it comes to what you need and how to prove that you have insurance coverage. Some car insurance companies allow your current insurance to cover your new vehicle, while other cars require a new policy before taking full ownership. Your auto insurance agent will be able to tell you everything you need for proof of insurance before your new policy kicks in.
Registration and Titling
After the vehicle purchase is complete, you will have to drive the vehicle home. Because it's not registered in the correct state yet and might not have any license plate, it's important to have the signed title, bill of sale, and all the necessary insurance and identification paperwork for the car handy.
After you get the car home, the first thing to do is get it retitled in your home state and registered with your state's Department of Motor Vehicles (DMV) or similar vehicle agency. Each state has varying registration and new title fees, often higher than titling a vehicle purchased in that state. Despite the extra costs, this process is usually not much more complicated than getting your driver's license renewed. Proof of identification, vehicle identification number (VIN) verification form, insurance, and proof of residence are typically required. Most states have a grace period of thirty to sixty days in which you must register your new car before incurring any penalties.
Setting Up a Safety Inspection
Each state has different safety inspection requirements. Some states do not require them, while others have a long list of items to check for your vehicle to pass. Like the registration and title process, have the vehicle safety inspected at your local mechanic to ensure that you do not incur any fines if your state imposes them.
A local mechanic and the state's DMV webpage should also have specific state inspection information. Some states like Nebraska and Kentucky only require a safety inspection after purchasing a car out of state. Some like New York, Virginia, and Pennsylvania require annual inspections for safety and other issues. Most have particular requirements, some of which only apply to certain vehicles or vehicle types.
The potential issues a safety inspection brings with it are how an out-of-state purchase can cost more than a home state new or used car purchase. The state in which you live and the state in which you buy the vehicle could be the costliest part of the process, especially if the previous state required fewer inspections or had lower safety inspection standards than the state you keep the car in.
Setting Up an Emissions Test
For many, emissions inspections and safety inspections are often lumped together. Some states require both performed at the same time while some only need one or the other, though most states that require emissions testing also require safety inspections.
California, in particular, is known for its strict emissions requirements. California residents who buy an out-of-state vehicle need to be particularly careful that a pre-purchase inspection includes smog and other emissions equipment testing so the vehicle will be compliant. Many new cars sold in the United States are equipped to be 50-state compliant and meet the California Air Resources Board (CARB) emissions standards enforced by 14 other states and the District of Columbia.
Even though California is the classic example of strict vehicle emissions regulations, states like Colorado, Delaware, Maine, New York, New Jersey, Vermont, and several others follow CARB guidelines. It is important to know what your state requires for emissions to drive your new car legally.
Taxes are a sore subject for many, but they are often required before registration and retitling can occur. A few states will not require sales tax on a new vehicle purchase, so it is pertinent to know what your state requires and pay both state and local taxes on the purchase as soon as possible.
Vehicle taxes apply to the home state and county of the buyer or the state where you keep the vehicle. In other words, if you buy a car from a private seller in Kentucky, and you live and maintain your vehicle at your home in Arkansas, the vehicle tax will be levied by Arkansas. To find information about your specific state's tax requirements as they pertain to vehicle purchases, check with the state's vehicle registration agency.
In general, buying a new or used vehicle from a different state is more complex and involves more hassle than buying a car from your home state. Dealership can help mitigate the hassle since many of their salesmen help you through the process or even complete some of it for you. Buying from a private seller from out of state requires more work on your part.
Making sure your insurance will cover your drive home, having the vehicle inspected by an independent mechanic, obtaining a vehicle history report, registering and retitling the car in your home state, getting your new vehicle inspected in your home state, and paying necessary taxes are all part of the process.
Because each state has varying requirements for many of these mandates, it is essential to refer to check with the various state agencies for specific information that you need to know to make your out-of-state vehicle purchase as easy and successful as possible.