Buying a car out of state

How to buy a car from another state

Even though it’s a big purchase done mostly remotely, buying a car out of state is common and very doable. Just follow these seven steps, and you’re much more likely to have a smooth and satisfying experience.

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1. Get a vehicle history report

For pre-owned vehicles — even certified pre-owned (CPO) vehicles — it’s always best to check the vehicle history report before becoming emotionally (or financially) committed to a car.

A vehicle history report provides an extensive summary of the car’s life from the date of first sale to today, including the number of previous owners, maintenance records and its general geographic location. You’ll also see accident records, damage reports and any outstanding liens on the vehicle.

Here’s a sample report from CARFAX. Vehicle history reports typically cost around $30 and are well worth the investment, since they can lend additional peace of mind or reveal concerning red flags.

Sometimes a seller will purchase the vehicle history report themselves and attach it to the listing, so be sure to check before investing your $30.

2. Get a pre-purchase inspection

Even if the vehicle history report looks clean, it’s still best to have a mechanic check out any used vehicle before you arrive on-site. This service is called a pre-purchase inspection (PPI) and typically costs around $200. You’ll need the seller’s permission to perform one since they’ll need to hand the keys to your mechanic, but if you can arrange it, it’s well worth the cost.

“This inspection helps buyers make an informed decision based on the actual state of the vehicle, including its safety, performance and overall reliability,” said Eric Hamilton, founder of Whyte Knyte Inspection Services.

Broadly speaking, dealers will let you perform an on-site inspection as long as you get permission and notify them of the mechanic’s projected arrival time. National used car retailers like CarMax don’t allow PPIs, but you can perform one during the return window.

Private sellers may be entirely receptive — or completely opposed — to a PPI. In the latter case, it’s up to you whether you’re willing to forgo the PPI and risk traveling to see a car in unpredictable shape.

But should the PPI turn up green, it’s time to plan how you’ll retrieve your new car.

3. Plan how you’ll get the car home

Your plan to pick up your car largely depends on how far it is.

If it’s a half-day drive or less, you may be able to drive up with a friend, purchase the car and drive it back in a single day. Just keep in mind that while private sales can go somewhat quickly (since you’ll do the bulk of the paperwork later), buying from a dealer can take up to four hours as you sign and document everything upfront.

If the car is more than a day’s drive or perhaps even a flight away, you might consider shipping it home.

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According to American Auto Shipping, the average cost to ship a car 1,000 miles is about $1,150. When you compare that with the price of a flight, meals, lodging and gasoline, it starts to become a viable option that’s also a huge timesaver.

Once you’ve determined whether to ship the car or retrieve it yourself, there’s one final step before purchasing.

4. Prepare your insurance

If you don’t already have auto insurance, you’ll need to purchase a policy before driving off the lot. If you already have a policy, most providers will give you 30 days to transfer your policy to your new vehicle. So, technically speaking, it’s acceptable to buy the car now and deal with your insurance a bit later.

Still, you might consider getting quotes for insurance upfront and transferring your policy on day one. First, your insurance rates will likely change (and go up) with your new car, so it’s best to get quotes early so you can factor higher premiums into your budget.

Second, you may want your newer, superior coverage for the long ride home. To illustrate, if you had state minimums on your old beater but plan to get full coverage on your new Mercedes, you might want that full coverage to kick in before your 500-mile journey back to your home state. 

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5. Purchase the car and secure the title

If you’re purchasing a new or used car from a dealer, you shouldn’t have to worry about securing the title. They’ll do everything for you and mail the title to your lender if you’re financing.

If you’re buying from a private seller, you’ll want to familiarize yourself with the title transfer process specific to the state where you’re buying the car and make plans with the seller accordingly.

The Florida Department of Highway Safety and Motor Vehicles, for example, recommends that buyers and sellers simply meet at a motor vehicle service center, where they can be guided through the process: According to its site, “This protects both the seller, who knows that title has been transferred out of their name, and the buyer by ensuring the seller has provided them with the proper ownership documents.”

Lastly, keep in mind that the majority of private sellers want cash for their cars, so be sure to have a check from your bank or lender ready before arriving in person.

Once you have the keys, get a car wash and a pint of ice cream or a nice coffee to celebrate. Now it’s time to get your new car home.

» MORE: How to buy a used car

6. Get an emissions test

Before you can get your car registered in your home state (and pay your due taxes), you may need to pass safety and emissions tests required by your state, city or county. Generally speaking, safety and emissions requirements are decided at the county level, so try performing an online search for “[your county] emissions test.”

Once you’ve passed your tests, it’s time to head to your local motor vehicle office.

7. Register the car and pay sales tax

If you bought your car from a dealership or big used car retailer, it’s possible the seller has registered your vehicle for you and factored your home state’s sales tax into the sale. You should ask to be certain.

If you bought your car from a private seller, however, you’ll now need to go to a motor vehicle office to register your car yourself. This is also where you’ll pay any applicable taxes on the sale and transfer the title from state to state.

Residents of Alaska, Delaware, Montana, New Hampshire and Oregon pay 0% sales tax on cars. On the opposite end of the spectrum, residents of California, Indiana, Kansas and Nevada all pay at least 7%, so be sure to factor your state’s vehicle sales tax into your budget before you get sticker shock at the motor vehicle office.

Reasons to buy a car out of state

Though it may require some logistical gymnastics on your part, buying a car out of state can actually present some advantages over buying locally:

• Better selection: A wider search radius means more options, especially if you’re looking for a rare car, like an air-cooled Porsche 993.
• Better deals: The farther you look, the more likely you are to find an amazing deal worth traveling for.
• Room to negotiate: Nashville, Asheville, Atlanta — if it’s all the same to you and you’re willing to travel for the best deal, let the sellers know, and they may be more flexible on price.
• Cars in sunny states may be in better shape: If you live in an area with lots of salt, potholes or generally harsh road conditions, a vehicle from out of state may have significantly less wear and tear on its wheels, suspension and undercarriage.

What to consider when buying a car from another state

While potentially advantageous, buying a car out of state still requires extra careful planning and consideration. Since you can't use your local mechanic for a pre-purchase inspection, you may need to browse reviews and make a few phone calls to find a trustworthy local mechanic who can do an on-site PPI.

You’ll also owe sales tax to the state where you register the car, not where you purchase it. If you purchase the car from a dealer, it may incorporate your home state’s sales tax into the purchase and give you a temporary tag. But if you buy from a private seller, don’t forget that you might have a big tax bill (up to 8.5% in Nevada) waiting for you at your local motor vehicle office.

Technically speaking, if you purchase a car from a private seller, you’ll be driving it home without a plate or any proof of registration. Most states have a grace period of at least seven business days to return home and register the vehicle, but you may still get pulled over for having no plates. Keep your dated bill of sale handy during your drive home.

Even a clean CARFAX report combined with a spotless pre-purchase inspection is no guarantee of quality. The risk of a breakdown on the drive home may be another reason to consider shipping over driving.

If you live in California and are registering a vehicle, you may need to get a smog inspection. If the vehicle fails the smog check, you’ll need to get it repaired and retested.

Bottom line

Buying a car out of state can be hugely advantageous and involves just a few extra steps. As long as you perform your due diligence, plan ahead for transport and get your tests and registration done ASAP, you’ll be able to find a deal and bring it home in no time.