Buying a Used Car from Out of State: A Step-by-Step Guide
Written by
Staff Writers
Updated on October 28th, 2021The COVID-19 pandemic has affected many aspects of the economy, including the automotive industry. It forced several automakers to stop production when it started, which led to a global microchip shortage.
As a result, the country’s year-over-year new car inventory has roughly decreased by half. It also caused the prices of new and used cars to increase. Many buyers took to checking out options in other states just to get the car they want.
But is buying a used car out of state worth it? What are the pros and cons of exploring this option? Read on to learn what you need to know if you’d like to buy a used car out of state.
Tips for Buying a Used Car from Out of State
Can I buy a car in another state? Yes, you definitely can. To give you an idea of the process involved, here are some of the things you should do or consider when buying an out-of-state car:
Obtain a Vehicle History Report
Secure the vehicle history report of the used car you’re eyeing to get access to information that can help you decide if the car is worth it and determine its potential issues.
For instance, with the help of the report, you may be able to know if the car has a lien. If that’s the case, you can let the owner settle any unsettled balance before proceeding with the deal. Otherwise, you may have to deal with the liability once you buy the vehicle.
Assess the Condition of the Vehicle
Make sure that the vehicle you’re planning to buy is in good condition. This can be tricky since you may not have the chance to inspect it yourself since it’s out of state. It’s why many buyers prefer to leave the assessment to a trusted professional rather than depend solely on the reports provided by the dealer or seller.
You may not be able to take the vehicle out on a test drive yourself, so it’s important to find an inspection agency you can trust to do it for you. Also, remember to ask your representative to check for water damage.
If the car has water damage, it may mean that its previous owner drove it through a flooded area or that it was previously submerged in water. You can read this article to have an idea about how to inspect a car for flood damage.
Check Emission Requirements
Check your state’s DMV (Department of Motor Vehicles) or registry of motor vehicles website to determine how to register an out-of-state car.
For instance, California has the strictest air quality standards in the country. Most automakers manufacture their vehicles to comply with these regulations.
So if you buy a vehicle from a state that follows the standards set by the California Air Resources Board (CARB), it’s sure to pass the requirements of all other 50 states.
But note that there are vehicles that are made in a non-CARB state, which means they may not meet the strict air quality standards. If the vehicle you’re planning to buy comes from such a state, you may have a hard time registering it in a CARB state, like California, Arizona, Connecticut, Maine, and many others.
Deal with Tax and Registration Issues
Note that you’ll need to pay sales tax to the state where your vehicle will be registered (the state where you live in). Not all states charge sales tax, so you must check the rules that apply to your area.
If you’re planning to push through with an out-of-state deal, be prepared to spend money for the processing of your vehicle’s title and registration. You may also have to present a "bill of sale" and a transferred title to prove that you legally bought the vehicle.
You must accomplish these tasks within the timeframe set by your home state, which is around 30 days in most states. Your vehicle may need to pass an exhaust emission test before you can register it. Also, keep in mind that some states also require buyers to secure a “temporary registration” before they can take their vehicle home.
Review the Vehicle's Insurance Policy
If you’re planning to get a new insurance policy for your vehicle, you must discuss this with the car’s previous owner or sales representative before sealing the deal. Review the vehicle’s insurance policy thoroughly together and make sure nothing will keep you from updating or replacing it with a new one. Otherwise, you may encounter problems down the line.
Drive Your Vehicle Home
Secure the vehicle history report of the used car you’re eyeing to get access to information that can help you decide if the car is worth it and determine its potential issues.
For instance, with the help of the report, you may be able to know if the car has a lien. If that’s the case, you can let the owner settle any unsettled balance before proceeding with the deal. Otherwise, you may have to deal with the liability once you buy the vehicle.
Registration Information by State
Before sealing the deal, it’s crucial to review specific registration laws and requirements that apply to the specific state where you’d want to register your vehicle (your home state). Enter the name of your state to view the list:
Reasons to Buy a Used Car from Out of State
Aside from the global microchip shortage, here are other compelling reasons to buy a car from a different state:
- You want a vintage or rare model.
- You can’t find a car with the features you want in a local seller.
- You want to save money and take advantage of the regional differences in new vehicle pricing and manufacturer incentives.
- You prefer using online buying services.
Challenges to Overcome
Buying a car out of state is more complicated than buying one close to home. Here are some obstacles you may encounter when getting a vehicle from a different state:
Distance
The greatest challenge in purchasing a vehicle out of state is distance. If you don’t want to travel, you’ll have to find a trusted inspection agency to test drive and inspect the car you want to buy for you. You’ll also have to spend money on transport or shipping.
Distance may also make it difficult for you to check the vehicle’s VIN (vehicle identification number). This can make checking the car’s history challenging.
Make sure to watch for “title washing.” Some owners may take advantage of your distance and hide important information from you, like flood damage.
Risk of Fraud
Fraud in the automotive sales industry is a growing problem. If you’re not planning on doing the transaction personally, watch for red flags like unrealistic bargain prices.
Complicated Paperwork
As mentioned, states have specific sales tax, registration, and emission requirements. These may give you a headache, especially if you didn’t do your research. So before sealing any deal, make sure you understand all the steps involved in your transaction.
Is Buying a Used Car Out of State Worth It?
Buying a car out of state is more complicated than buying one close to home. Here are some obstacles you may encounter when getting a vehicle from a different state:
Buying a used car out of state from a dealer can be a hassle. However, if you’re willing to go through the process, the results will definitely be worth it. You can take your pick from vehicles outside your home state. As long as you do your research and plan your purchase carefully, buying an out-of-state car should come with little risk.
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