What Should You Know Before Buying a Car Out of State?
So, you’ve found your dream car—but it’s sitting in another state, not your own backyard. Maybe it’s a rare model, a better deal, or just the exact color you’ve been hunting for. Before you get swept up in the excitement, let’s break down what you really need to know to make this cross-state purchase smooth and stress-free.
How Does Registration Work When You Buy Out of State?
Here’s the first thing that trips up a lot of buyers: registration. When you buy a car in a different state, you can’t just drive it home and call it a day. You’ll need to register the vehicle in your home state, not the state where you bought it. This means you’ll have to gather the right paperwork—think bill of sale, title, proof of insurance, and sometimes a temporary registration or transit permit.
Most states give you a short window (often 30 days) to get this sorted. Some dealerships will help with the paperwork, but if you’re buying from a private seller, you’ll be handling it yourself. Check your state’s DMV website for the exact requirements, since they can vary a lot. For example, California has strict emissions testing, while Texas might require a safety inspection. Missing a step can mean fines or even trouble getting your plates.
Will You Have to Pay Taxes Twice?
This is a big concern, and thankfully, the answer is usually no. You typically pay sales tax in the state where you register the car—not where you buy it. So, if you live in Illinois but buy a car in Indiana, you’ll pay Illinois sales tax when you register the car back home.
However, some states have reciprocal agreements, and a few may collect tax at the point of sale. If you’re buying from a dealer, ask them how they handle out-of-state sales. Private sellers won’t collect tax, but you’ll pay it when you register. The key is to keep all your paperwork—receipts, bill of sale, and any tax documents—so you don’t get caught in a paperwork tangle later.
What About Emissions and Safety Inspections?
Here’s where things can get tricky. Each state sets its own rules for emissions and safety inspections. For instance, if you’re moving a car from a state with lax emissions laws to one with stricter standards, you might need to make modifications before you can register it. According to the Environmental Protection Agency, more than 30 states have some form of emissions testing, and requirements can change depending on the age and type of vehicle.
Before you buy, check your state’s inspection requirements. If your new ride doesn’t meet the standards, you could face costly repairs or even be unable to register the car at all. Some buyers get a pre-purchase inspection in the destination state just to be sure.
How Do You Get the Car Home Legally?
Let’s say you’ve sealed the deal—now, how do you actually get the car home? If you’re buying from a dealer, they might issue a temporary tag or transit permit. Private sellers usually don’t have this option, so you’ll need to check with the DMV in both states. Some states allow you to drive home with the signed title and bill of sale, but others require a temporary permit.
Alternatively, you can hire a transport service. It’s not cheap—a cross-country haul can run $600 to $1,200—but it’s hassle-free and keeps you legal. If you’re driving it yourself, make sure you’re insured for the trip. Some insurers offer short-term coverage for new purchases, but don’t assume you’re covered until you check.
Are There Any Hidden Fees or Surprises?
It’s easy to overlook the small stuff. Some states charge extra fees for out-of-state buyers—think title transfers, emissions testing, or VIN verification. If you’re financing the car, your lender may have additional requirements, like proof of inspection or a lien recording in your home state.
Don’t forget about logistics, either. Travel costs, hotel stays, and even meals can add up if you’re picking up the car yourself. And if you’re buying a used car, always get a vehicle history report to avoid nasty surprises like salvage titles or undisclosed accidents.
Is It Worth the Extra Effort?
Sometimes, buying out of state is the only way to get the car you want, especially if you’re after something rare or unique. According to a 2023 study by iSeeCars, nearly 13 percent of used car buyers purchased vehicles from outside their home state, often saving thousands compared to local prices. But those savings can evaporate if you’re not careful with paperwork, inspections, or transport costs.
The big takeaway? Buying a car out of state isn’t about perfection—it’s about smarter adjustments. Start with one change this week—maybe just researching your state’s DMV rules—and you’ll likely spot the difference by month’s end.
