How To Buy a Car Out of State: Insights From an Insurance Agent
- If you buy a vehicle from an out-of-state dealer, they will handle your temporary registration. If you’re buying from a private party, plan to visit the DMV (Department of Motor Vehicles) in the seller’s state.
- In most cases, you’ll need to pay your own state’s sales tax when you purchase a vehicle out of state, not the seller’s. The car must also meet any inspection, emission and insurance requirements for your state.
- Buying a car across state lines can be risky. It’s easier to get scammed and you might have to meet a stranger far away from home.
I’ve been a licensed auto insurance agent for 15 years, and I’ve helped thousands of policyholders navigate buying and insuring cars, including ones they bought across state lines.
Can you buy a car out of state? Absolutely, but it takes some know-how. The most common questions people have are about registration. You generally need to get a temporary registration from the state you’re buying the car in. This will let you drive the car home legally.
But which state’s sales tax applies? How do you make sure you don’t get scammed? If I had a policyholder on the line and they asked me how to buy a car out of state, this is what I’d say…
1. Make sure the car is as advertised
Buying a car in another state has unique challenges, especially if you found the car on Craigslist or are buying it sight unseen. Doing a little homework now could save you a giant headache in the future.
Pull vehicle history reports
Getting a VIN check, or pulling a Vehicle History Report (known as a VHR) is a really important part of purchasing a vehicle. VIN (which stands for vehicle identification number) and VHR reports can help you see the history of the vehicle, whether or not there are any potential problems with the title, or whether or not the vehicle was stolen.
- VINCheck: This free tool from the National Insurance Crime Bureau will tell you if an insurance company has declared the vehicle a total loss or stolen. VinCheck won’t pull up information if the owner didn’t report damage to an insurance company.
- National Motor Vehicle Title Information System ( NMVTIS): Run the car’s VIN through an NMVTIS-approved VHR vendor to see different parts of its history. Prices vary depending on the vendor you choose.
- Safety recall lookup: This free search uses the car’s VIN to determine whether there are any outstanding recalls that need to be repaired. Manufacturers will do recall repairs free of charge, but you should know about them before buying.
- Carfax report: It’ll cost you $44.99, but consider ordering a Carfax report. This will show you whether the car has been in any accidents and how well it was maintained. VINCheck is helpful, but it won’t work if the owner didn’t report damage to an insurance company.
Get a prepurchase inspection
Whenever you buy a used car (in-state or not), a prepurchase inspection should be a non-negotiable. You can find inspection services with independent mechanics or national chains, like Firestone.
If you can’t afford a professional inspection, take a mechanically inclined friend or family member with you and have them give the car a once-over when you get there.
Want to learn more? Read What To Look for When Buying a Used Car.
2. Buy the car
Dealerships will walk you through the car-buying process. If you’re buying from a private party, you’ll have to do the paperwork yourself.
The dealer also usually collects your sales tax (you’ll pay whatever the rate is in your state). If you buy from an individual, you’ll pay taxes when you get home and register the car.
For private party sales, the seller will sign the title over to you. Never buy a car without a title. Without a title, there’s no way to know whether the seller actually owns the car, whether it has a current loan or if it is salvaged.
You should also get a bill of sale (some states require it). It can help prove you own the car while transporting it back home.
Don’t know how to write a bill of sale? No worries — we’ve created a guide for that.
Yes. But make sure the car you buy meets your state’s inspection and emission test requirements. I learned this the hard way when I moved from Michigan to Virginia.
Michigan doesn’t require car safety inspections, but Virginia does. When I got to Virginia and tried to register my car, I was surprised to learn that I needed an inspection. I was a little less surprised when I failed the inspection because of rust. I couldn’t legally drive or register the car until I got it fixed.
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3. Insure it
Generally, the car insurance you currently have will apply to your new car for seven to 30 days. You should still insure it anyway.
For one, only your current insurance coverage applies. If you have liability only, for example, your new car will only get liability (not full) coverage. You’ll also need to show proof of insurance to get your temporary registration.
4. Get temporary registration
You probably won’t need to worry about this part if you’re buying from a dealership as they’ll take care of it for you.
If this is a private party sale, you will have to go to a DMV in the seller’s state to get temporary registration (sometimes called a drive-out permit). Come prepared with the title, bill of sale, proof of insurance and your ID.
5. Get the car home
The easiest way to get the car home is to drive it back. That means you’ll need to take someone with you to pick it up. One of you can drive your old car and the other, your new car. Maybe this could be your mechanically inclined friend who’s helping you inspect the car.
If you’re worried about putting extra miles on the odometer (or if the car doesn’t run), you can get it transported. Expect to pay $1.25 to $2 per mile.
According to a LendingTree Study, people in Nevada, Florida and Louisiana pay the most to own a car. If you live in New Hampshire, Maine or Ohio — congratulations. Car ownership is least expensive in these states.
6. Register it in your own state
Once you get the car home, it’s time to register it in your own state. How easy this is to do depends on where you live.
In Florida, you must bring a notarized odometer reading to register a car for the first time. In other states, the same documents you used to get temporary registration may be enough.
Contact your local DMV for more information, as requirements vary by state. There’s nothing worse than waiting all day just to be turned away because of red tape.
Bonus: Staying safe when buying a car out of state
Exchanging funds securely
Dealerships usually accept credit cards, debit cards and checks. A private party might prefer cash because it’s safest for them, but it can be dangerous for you.
There are ways to pay for the car that protect both you and the seller, including a:
Cashier’s check: Getting a cashier’s check is like trading cash for a check written from the bank’s account. The seller can rest assured that the check will be good because the money is coming from the bank’s account, not yours.
Bank wire: Bank wiring does have its risks (see scams below), but it can still be a safe way to transfer money. The seller’s bank sends the money directly to your bank, so you know the funds are available. It’s best that you wire the money together at your bank. Once the wire’s gone through, it’s almost impossible to reverse.
Avoiding common car-buying scams
How do you protect your wallet when you’re buying a car across state lines? You keep your eye out for car-buying scams like the ones below.
| Scam | What it is | What happens next | How to avoid |
|---|---|---|---|
| Wire transfer fraud | Seller asks you to wire the money before you get the car | You wire the money and the seller stops responding | Take the seller (and the car) to the bank with you when you wire the money |
| Deposit theft | Seller asks for a deposit to take the car off the market | The seller accepts your deposit and blocks you | Never put down a deposit to hold a car, always verify the seller’s identity and keep records of the transactions |
| Fake escrow | Seller asks you to pay through a third-party service, sometimes one with a brand name (like PayPal) | You make a payment on a fake website built to look legitimate | Refuse and offer to pay in person by cashier’s check or bank wire |
| Title washing | Seller re-registers a salvage/branded car in a state that doesn’t require salvage/branded on the title | You unknowingly buy a car that’s been declared a total loss or is unsafe to drive | Order a Carfax report before buying |
| VIN cloning | Seller finds a clean VIN online in for-sale ads and puts it on a stolen, branded or salvaged car | You end up with a stolen, totaled or unsafe car | Make sure the VIN on the paperwork matches the VIN that’s inside the driver’s side door and on the dashboard |
Protecting yourself physically
When you’re buying a car from a private seller — in-state or out — take steps to protect yourself.
- Refuse to meet and abandon the sale if the seller starts getting weird or pushy
- Consider sharing your location with a loved one (or at least tell someone where you’re going and when you’ll be back)
- Meet during the day, in a public place (a police station parking lot or the DMV parking lot is best)
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