Best State to Buy a Car: Where Can I Get the Best Deal?

Best State to Buy a Car

Purchasing a new or used vehicle is a significant investment, and you want to make sure you get the best deal possible.

Buying a car out of state can help you find the best deal on the vehicle of your dreams. But which state should you look in?

Let’s dive into the best (and worst) states to buy a car.

Best and Worst States to Buy a Car Video

Best State to Buy a New Car

Best State to Buy a New CarThe cost of buying a vehicle in different states depends on the demand for the vehicle, promotions/incentives, and many more factors. Overall, New Hampshire is the best state to buy a new car. When examining the top factors, it is the most affordable option. The top reasons to buy a car in New Hampshire include:

  • No sales tax.
  • Low cost of living.
  • Low registration fees.
  • Relatively low insurance premiums.
  • Low cost of car ownership.

Keep in mind that many of the reasons that make New Hampshire a great place to buy a car primarily impact those who live in/will register their car in New Hampshire.

Worst State to Buy a New or Used Car

Worst State to Buy a CarCalifornia is the worst state to buy a new or used car in. The cost of living in California is extremely high and continues to rise. The state also has significant unemployment rates. Overall, drivers look to hold onto their cars for longer. This leads to less-used cars available, making for a competitive market. On top of that, the population growth also places more competition on the new car market, making it harder to find an affordable car that’s new or used.

Overall, owning a car in California is extremely expensive. It’s the state with the second-highest cost of living (behind Hawaii). The high sales tax and expensive gasoline prices make it the most expensive state to own a car.

Best State to Buy a Used Car

Florida is the best state to buy a used car inBest State to Buy Used Car. The U.S. Census found that Florida’s senior population gives up high-quality used cars due to decreased driving abilities. Over 20% of Florida’s population is 65 years or older, and many of these people look to give up cars in good condition.

Additionally, young people in Florida also look to upgrade to newer, better cars on a more frequent basis. Both factors lead to a massive used-car inventory. The mild winters help preserve the condition of cars as well. Car shoppers can find a wide array of high-quality used cars in Florida.

States With The Lowest Car-Buying Fees

Best State FeesUnexpected fees can also increase the price of a car purchase. Some states have fewer car-buying fees. The top three states for the lowest car-buying fees are Oregon, Alaska, and New Hampshire.

According to the Oregon Department of Justice, the initial car-buying fees in Oregon average $150 or less, which is far less expensive than other states. In Oregon, dealers cannot charge more than $115 for processing fees without an integrator, or $150 if they use an integrator.

Alaska and New Hampshire also charge minimal fees for car purchases, making them great states for car buying fees.

States With The Highest Car-Buying Fees

Worst States FeesAlabama is the worst state for unexpected car-buying fees. The average cost of fees on a car purchase is $2,313 in Alabama. When buying a car in Alabama, you can expect to pay around 14% in fees! Here are some other states with high fees as well:

  • Arizona- 13.9%
  • Colorado- 13.8%
  • Tennessee- 12.5%
  • Florida- 11.3%

States With No Sales Tax

States With No Sales TaxThere are some states that do not have sales tax. Sales tax is an underestimated car-buying expense, as it can add thousands of dollars to the purchase price. The states without a car sales tax are:

  • Alaska
  • Delaware
  • Oregon
  • Montana
  • New Hampshire

However, you won’t be able to save money buying a car in a state without car sales tax unless you register the car in that state as well. Even if you ship or pick up the vehicle from another state, buyers pay sales tax for the state they register the car in, not the state they buy it in. There are certain criteria that may allow you to avoid paying the sales tax.

Learn more about the sales tax for each state in this post.

States With Lowest Auto Insurance Rates

States With Lowest Auto InsuranceMost states require auto insurance, so it’s important to factor in that cost. Auto insurance rates vary drastically across different states, but the national average is $1,318 per year. If you are looking for states with affordable auto rates, Michigan is not a good option. Michigan’s auto insurance rates are so exorbitant that the government is looking to create policies to regulate them.

On the other hand, Maine has the cheapest auto insurance rates. Premiums with decent coverage fall around $864 a year. Some other states with affordable auto insurance below $1,000 are Idaho and Ohio.

Tax information and rates are subject to change, please be sure to verify with your local DMV. 

Frequently Asked Questions

What is the cheapest state to buy a car?

Overall, New Hampshire is the cheapest state to buy a car if you register the car there. New Hampshire has a decent-sized used car market, no sales tax on cars, affordable car insurance rates, and an overall low cost of living.

What is the best state to buy a used car?

Florida is the best state to buy a used car, with prices 10% below the national average. The large population of senior citizens increases the used car inventory, as many older drivers look to sell their cars. Used cars in Florida are generally well maintained, as they do not experience harsh winter weather.

What state has the lowest dealer fees?

Oregon has the lowest dealer fees, as they average $150. This is significantly lower than many other states. Two other states with very affordable dealer fees are Alaska and New Hampshire.

What state has the lowest or no sales tax?

Several states do not have sales tax on car purchases, including Alaska, Delaware, Oregon, Montana, and New Hampshire.

What state has the cheapest insurance?

Maine has the cheapest auto insurance rates. While the national average cost for car insurance is $1,318, the average cost in Maine is $864. Two other states with annual car insurance rates below $1,000 are Ohio and Idaho.

Is it worth buying a car from a different state?

Buying a car out of state allows you to find the best deals on the specific cars you are most interested in, but the process adds complexity. When you buy a car out of state, you still need to pay certain fees for the state you will register the car. Additionally, you’ll either have to physically go pick up the car or pay to have it shipped to.