Buying a Car Out of State: Everything You Need to Know

Buying a car out of state is increasingly common as more and more people turn to online search tools and peer-to-peer selling networks to find a new vehicle.

Let’s look at the pros and cons of going across state lines for a new or used car and review some of the considerations and critical steps that go into buying a vehicle in another state.

Pros of Buying in Another State

There are clear reasons why buying a car in another state can make sense. These include:

• A far greater selection: Internet tools mean you can now find vehicles anywhere in the U.S. at prices that might not be available locally.
• Specific vehicles: The same tools also make it possible to find a specific prized make or model, wherever it might be.
• Local deals and offers: You might be able to take advantage of discounts, rebates, or add-ons not available from car dealers in your area.

Cons of Buying in Another State

There are also reasons why it’s important to be cautious about buying a vehicle in a different state. These include:

• Transportation costs: The sticker price may not include the cost of driving or shipping a vehicle to your state. It's a good idea to find out these costs before your car purchase.
• Taxes and fees: You may need to pay sales tax, and other fees might make it more expensive to register an out-of-state vehicle.
• Different registration requirements: Some vehicles might need to be modified before you can register them in certain states or may not be allowable at all.

Key Considerations

With these pros and cons in mind, here are the key points to consider if you're looking at buying a vehicle out of state – especially if you want to save money.

Cost Issues

Consider whether extra costs, like local fees and taxes, might make bringing your new car home more expensive. In that case, you might lose any potential savings from buying out of state compared to locally. Be sure to look at:

• The cost of driving or shipping the vehicle
• The tax you need to pay when you register the vehicle in-state
• Any emissions testing, safety testing, or modifications you need to make before you can register the vehicle

Registration

Be aware of state regulations that might prevent you from registering your vehicle or force you to make significant modifications. For instance, states like California have strict rules that determine:

• Whether a vehicle is registered as a new or used vehicle
• Whether salvaged, rebuilt vehicles or customized vehicles can be registered at all

Insurance

Be sure that your in-state auto insurance will be able to cover your new vehicle. For example, many insurance agencies do not cover converted or home-built camper vehicles.

Dealership vs. Private Sale

A major factor to consider in weighing an out-of-state purchase is whether you'll buy from a dealership or as part of a private sale. A private sale might offer the best savings, but it means you'll be signing up to handle all aspects of the out-of-state purchase personally.

9 Steps to Buying a Car Out of State

Once you've found a car you want to buy in another state, here are the steps you'll need to go through to purchase it:

1. Get A Vehicle History Report

Whether you are buying from a dealership or a private seller, a vehicle history report will let you know how often the vehicle has been sold and whether it has been modified or been involved in a major accident.

For a private vehicle purchase, the report will also let you know whether the car is the subject of any liens, that is, whether the seller still owes money to a lender. A vehicle history report should be provided by the dealership or can be ordered using the vehicle identification number (VIN) from agencies like Carfax or AutoCheck.

2. Get An Inspection

If you buy a used car from a dealer, they should be able to provide an inspection report. If you are buying from a private seller, you'll need to arrange for the car to be taken to a certified mechanic for an independent inspection. Some states require safety and smog checks.

3. Get Insurance

No matter where you buy, you’ll need insurance to drive the car home. You’ll need to provide details about the car to your insurance company so they can issue coverage under an existing or new policy.

4. Test Drive the Vehicle

Inspect and drive the vehicle yourself to make sure it's in the condition advertised and that it performs as expected. Be very cautious about buying a vehicle sight unseen, even if it's a new vehicle from a dealership.

5. Arrange Financing

If you’re financing your car through a lender in your home state, you’ll need to provide details of the car, including a VIN so the lender can provide proof of financing or issue a cashier’s check for the buyer.

6. Negotiate and Sign a Sale Agreement

Agree on a price and sign a sale agreement. If this is a private sale, it should cover any necessary contingencies like financing, an after-sale inspection, or undertakings about the vehicle's condition.

7. Get the Title and Bill of Sale

If you’re buying through a private sale, you’ll need a signed title and bill of sale from the seller. If the title is held by a lender, the seller will need to prove the car has been sold, or you’ll need to arrange to take over the loan. Be cautious about taking possession of a car without the title.

8. Get a Temporary Registration

You can drive between some states with the title and bill of sale in hand. In others, you'll need a temporary registration. A dealer will usually take care of the temporary registration and title requirements. If you're buying from a private seller, you'll need to take care of this yourself.

9. Register the Vehicle Where You Live

Once home, you'll want to register your vehicle as soon as possible. To do this, you'll need to complete any safety or emissions checks required by your state and pay the tax due on the purchase of the car. Resist the temptation to delay registering your car to avoid paying tax.

Have Questions About the Loan Title Process?

Check out our helpful information here

Buy Out of State, Finance Close to Home

There’s no need to go far to find the financing for your next vehicle. OUCU Financial offers our members affordable and convenient auto loans for both new and used vehicles, as well as refinances.

We offer:

• Competitive rates on new and used vehicles
• No application fee and no prepayment penalty
• Affordable add-ons like GAP insurance
• Skip-a-Pay option

Click below to learn how financing through OUCU can help you find a great deal on a private vehicle sale, whether you're buying in-state or out.

Tips for Buying a Car from a Private Seller