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How to Buy a New Car Out of State

by Louise Balle

There is no rule that states you have to purchase a new car in your state of residence. You can cross state lines to find a better deal on a car if you'd like. The process is very similar to buying a car in your own state. But keep in mind that you still have to pay applicable sales tax on the transaction to the state where you make the purchase in order to register the car.

Paying Cash

Travel to the out-of-state dealership (or private seller) and decide on the car that you wish to buy. Inform the salesman that you are located in another state and give your full out-of-state address so that he can fill out the official paperwork accordingly.

Sign the sales agreement (bill of sale), pay cash for the car (including sales tax if it's at a dealership---if at a private seller you pay the sales tax at your local DMV office), and wait for the dealer or seller to sign the title over to you. The seller will provide you with a temporary tag so that you can drive the vehicle back to your state. If for some reason he cannot, such as in the case of a private seller in another state, you may have to arrange to have the car towed to your home.

Take the out-of-state title and a copy of the sales agreement into your local state department of motor vehicles (DMV) to prove that you paid sales tax in the other state. Provide your driver's license and proof of insurance as well. Fill out the initial title registration form to register the car in that state and pay any applicable fees. You'll receive your plates (for your own state) and the new title, reissued for your own state, in the mail.

Financing the Car

Review and sign your financing agreement with the dealership in addition to your sales agreement. Place a cash deposit as required by the agreement. The main difference between this arrangement and paying cash is that the financing company will get the out-of-state title. You will receive temporary tags to allow you time to register the car.

Drive the car back to your state and wait a few days for the dealership or financing company to send the title to your state's DMV office. Your state will reissue and send the car title to the financing company.

Visit the DMV to register your car as described in Step 3 of the first section---the only difference is that you won't have the title in your hand. Inform the representative that your car is financed and provide a copy of your sales and financing agreement. Your home state's DMV will process the registration and send your plates as soon as the title information is verified.

Tip

  • Be sure to ask for a vehicle history report on the car before you buy if the car is used. This will show information about the previous owner as well as any issues the car experienced while titled in the other state.

Warnings

  • The exact rules for each state varies. Be sure to check the department of motor vehicle's website for both your state and the state where you plan to buy the car for more specific information on the process.
  • Some states will require you to pay the difference between the other state's sales tax and your own state's sales tax if the latter is higher. Make sure to check your state's specific rules.

About the Author

Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.

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Photo Credits

  • luxury car - model toy car image by alma_sacra from Fotolia.com