However, there are a few things to consider. Why Buy Out of State? According to Autotrader, there are three ways to get an out of state vehicle insured after the purchase. It’s best to ask the DMV representative. Determine if the car is, in fact, what the seller says it is. Buying a car out of state - and I can't figure out the tax, title, and license fees for AL (Huntsville: sales) User Name: Remember Me: Password ... a cash purchase (mine was a new vehicle if that makes a difference I don't know). Ask the dealer for the name and address of the previous owner. If the car you want is difficult to find or you have found it at a significantly cheaper price point, then it might be worth the trouble of buying it out of state. If you want to buy a car out of state, plan to see the car in person before you make your decision. At a minimum, make sure you have the title of the vehicle and proof of insurance. See who has the best deals this month! There’s nothing to stop a buyer from crossing state borders to buy either a new or a used car. For vehicles that are being rented or leased, see see taxation of leases and rentals. With the passage of Acts 2015-503 and 2015-551, sales of automobiles, motorcycles, trucks, truck trailers, or semitrailers, excluding motor homes and travel trailers, that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama, are subject to the Alabama sales tax in an amount equal to the state automotive sales … Many automakers offer deals on their certified used cars, like they do on new cars. There are other loopholes, too. Here are the facts on that and other out-of-state buying issues to keep in mind. I have an Alabama license but work in Pennsylvania.. Finally, watch out for “title washing.” This is where con artists illegally remove “salvage” or “flood” designations from vehicle documents to make wrecks look like problem-free models, at least on paper. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of. This can potentially help you save a lot of money if dealerships in your area aren't running similar deals. It's important to familiarize yourself with the regulations in your specific state. Dealer incentives. Discounts (Rule 810-6-1-.53): Cash discounts are not taxable. You don't pay TN tax at all, and not Alabama tax until you register your vehicle in AL and get your tags. So, if you can find a similar vehicle at a comparable – or even slightly higher – price within state lines, you should consider that car first. Show them the paperwork for the car. You may get a great deal on the car, but you don't want to end up paying more for major repairs down the road. Worst State to Avoid Unexpected Fees: Alabama If you want to avoid paying unexpected fees, steer clear of Alabama. This is especially true if you live on or close to the border of another state. Shopping for a car out of state is one of the best ways to find the car you’ve been dreaming of and also a way to find a better deal. Even better, take the time to have a used vehicle inspected by a local mechanic who can evaluate its mechanical condition – particularly the parts you can’t see – and alert you to any possible problems. Some states require dealerships to obtain proof of insurance before completing the sale. Conversely, four-wheel-drive trucks and SUVs tend to be more valuable in northern states than in the South. Our expert team staffs DMV buffs who know all of the ins and outs of car registration, taxes, titling, and more. To avoid issues like the ones mentioned above, you should consider obtaining a Carfax Vehicle History Report before purchasing a vehicle. delivery of an automotive vehicle in Alabama for an out-of-state dealer is not the seller and is not liable for collecting Alabama sales tax; the out-of-state dealer is the seller. Never purchase a vehicle sight-unseen. Safety Tips for Buying a Car in Alabama Buying a car is a big investment, and though many sellers are honest about the condition of their vehicle, you can never be too careful. If you are hoping to save some tax dollars by buying your car out of state, think again. Can I Buy a Car Out Of State? It won't work. Buying a Car out of State: Title and Registration. A missing title … New Hampshire: $8,098. If you’re buying a used car from a private party, you may have to pay taxes on the transaction price when it’s registered. Before you buy, test drive the car. Buying a car out of state might be a little more effort than buying a car close by, but it can often reap great rewards. © 2021 TheStreet, Inc. All rights reserved. Some states may require that you have a safety inspection done to ensure that the car is road-worthy. First, get the Carfax Vehicle History Report to dig into its past. If you buy from a dealership, the dealer may alleviate some of the burden by filing paperwork or submitting tax forms once you have paid for the car. A newer vehicle may not require an emissions test, but these standards change by state and even by county. The purchaser must pay tax when registering the vehicle. Crossing state lines is a challenging part of buying a new or used vehicle. Use Carfax’s Dealer Directory to Find Top-Rated Dealers in Your Area. Thinking about buying a new vehicle from another state in the hopes of avoiding taxes? Yes, you can. One-time purchase costs: $25. However, there are a few things to consider. You will be required to pay the sales tax rate from your home state. You will need to provide proof that the vehicle meets the California Air Resources Board's requirements or have it modified to meet their standard. A dealer's affidavit, IF your vehicle was purchased from an out-of-state dealership. You might have to pay the difference if the seller’s state sales tax is lower than your state’s. While all the tips here are designed to help you make it somewhat more manageable, you can't forget the basics of car buying during the process. New vs. Used Car Buying from Out of State. You will be required to provide the money before you register the vehicle and get a title. For new cars, manufacturer rebates and financing incentives can vary by region. You’ll receive a signed title from the seller that names you as the current owner, but you will have to transfer the title to your home state, and register the car there as well. Therefore, in addition to completing an out of state vehicle title transfer when applying for a DOR title as a new state resident, you will also need to transfer the car title of a vehicle with out-of-state … Including city and county vehicle sales taxes, the total sales tax due will be between 3.375% and 4% of the vehicle's purchase price. Buying a car out of state can be a challenge, but the benefits can be worth it. Some of the extra steps for out-of-state buying are going to cost you money. … Call the Consumer Protection Division of the Alabama Attorney General's Office: 1-800-392-5658. Then, go visit the seller to make sure the car is as advertised, and be sure to take a test drive. If you can, get proof that the car passed its last emission test so you know what you're getting yourself into. You might live close to a state border. Buying a car out of state is not for the faint of heart or the undecided. My PA job situation is a long-term temp situation, so I don't want to transfer my license just for the purchase of a car. It would be best if you tried to find a car you can afford that is located in your state or, at the very least, in one nearby. You may also have to pay any applicable local sales taxes. Follow these simple steps to ensure that your vehicle purchase goes as smoothly as possible. It can be a lot easier to get scammed if you're purchasing a car out of state without seeing it first. Keep in mind your state's safety regulations when purchasing an out-of-state vehicle. If you plan to move from a state without sales taxes to one with sales taxes, you should buy the car and register it about three months before your move. You want to be absolutely sure that this is the car you want. You will need to go to the DMV within a certain amount of time -- usually anywhere between 30 to 60 days -- to acquire these essential documents. If you're from California, emissions can be tricky. Another growing problem is vehicle “cloning.” Here, thieves obtain a legitimate vehicle identification number (VIN) from a car matching the year, make, model, and color of a stolen vehicle and swap or duplicate the identifying digits. If you’ve bought a car from a dealership, they will likely collect sales tax and pass it along to the proper agency in your state. It may be worth a long drive to get a bigger rebate or zero-percent financing if it’s not being offered where you live. Once you have found the car of your dreams, assuming it is a new vehicle, it’s always a good idea to ask for a copy of the window sticker. Some insurance policies provide automatic coverage for a limited amount of time for new purchases. I've been covering cars for more than 30 years, with 17 of those spent as automotive editor for Consumers Digest magazine. The short answer is that buying a car out of state could be the best way to get what you want and a good deal. Though some of these modifications are relatively simple, many of them can be expensive. Opting for an out of state car purchase is different than buying a car in Washington. I bought a car in Kentucky (which has a 6% sales tax) and drove it back to NC (which has a 3% highway use tax). Research the car thoroughly. Before you make your purchase, make sure that the brake lights, seat belts, steering system, and other essential components of the car work. Further, buying an out-of-state car at Balise Mazda is actually pretty easy, because we take care of all of the tough stuff for you. Discounts for volume sales are not taxable. CARFAX does not have the complete history of every vehicle. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. Find out when you should consider buying a car out of state and what steps you should take. My work has been featured in print publications including Forbes, Chicago Magazine, Men’s Fitness, Executive Travel and Muscle & Fitness, as well as websites including Forbes.com and Carfax.com. If buying a car out of state from a dealer, he or she will usually handle the temporary title and registration paperwork for you. On the other hand, when performing an in-person out of state title transfer after buying a vehicle without a title from another state, motorists will be required to submit a manufacturer’s statement of origin (MSO) document. Find out the essential steps you need to take to buy a car out of state in 2019. If you see a car you that you know you want online, check in with the dealer or private seller via email, phone, or text before making a big drive. Steps to Buying a Car Out of State First, obtain a vehicle history report for the car you plan to purchase. This way, you don't have to pay a sales tax on your vehicle in the new state when you re-register it. So, if you hail from that northeastern commonwealth and are buying out of state, you can drive the car as far as the Connecticut, New Hampshire, New York, Rhode Island, or Vermont border, but will then need to park the car and call a cab to take you the rest of the way. Be wary of out-of-town used-car classified listings that involve a third-party agent using a funds-transfer service. Local supply and demand are key elements in determining a vehicle’s transaction price, whether new or used. These might negate any savings you might achieve from buying your car out of state. Some states offer “trip permits” that let you drive an unregistered car for a few days – enough time to get it home and get it registered. Once you've decided that it's worth buying a car out of state, it's important to be prepared for some of the common pitfalls and obstacles you may face. The KY dealer sold it without tax and a temporary cardboard plate. Otherwise, you might find that the car has more defects than the seller let on. Buying a new car is a big decision. Before you make any big out-of-state treks to potentially buy a car, make sure that you're not making the trip for nothing. In many states, an emissions test or smog check will be required to get a car registered, and that could delay your registration process. Use Carfax’s Service Shop Directory to Find Top-Rated Mechanics in Your Area. What’s more, prices for specific types of used vehicles can vary by region. The Carfax Report may also indicate if the car has ever been in a crash, flooded, or salvaged. I specialize in the vehicle buying and ownership experience, with a few car reviews thrown in for good measure. Have a mechanic you trust inspect the car. Alabama State Code 810-5-75-.35, Section 40-12-260 (b) (2) requires individuals who reside in the state to obtain a license plate for any new or used motor vehicle within 20 calendar days of purchase or transfer of ownership. As With Any Car Purchase, Do Your Research. Before you buy a car, confirm that the car adheres to the state’s safety standards. This will cost you some money up front, but it is money well spent. Take the vehicle to a mechanic who can verify that it doesn't have any major problems. Ask preliminary questions before going to see the car. However, if you are buying your car from a private seller, you will have to handle the paperwork on your own. We’ve seen incentives on some models differ by as much as $1,500 depending on location. Yes, you can. Getting your title and registration in order is an easy process if you're buying your car from an out-of-state dealership. If you're unsure, it may be better to stick to local options. Call your insurance company before making the sale to ensure that you are covered in this scenario. Alabama … My weekly “Wheel Deals” newspaper articles are syndicated by CTW Features. You’ll still have to complete the process through your state DMV, though. Being prepared is key. However, if you're buying from a private seller, you'll need to handle title and registration paperwork on your own. However, some cars simply aren’t widely available in certain areas. One great reason to buy a car out of state is if you find a nearby dealership who is offering a knockout deal on a particular vehicle or a special for first-time customers. They will usually help you with all of the necessary paperwork. If you're buying from a private seller, you may get pulled over on your way home for not having a license plate if you purchased in a state that does not allow transfer of plates. Have the seller show proof that the vehicle has passed its last emissions test to avoid any surprises later on. CARFAX Vehicle History products and services are based only on information supplied to CARFAX. Many dealerships will give you a temporary registration sticker to use for your drive home. At this stage, the kind of arrangement you have with the seller when buying a car in another state changes what how you arrange transfer of ownership. A Carfax Report can confirm the number of owners and the odometer reading. Annual ownership and usage costs: $2,691. Once you’ve bought the car, you have a certain number of days to register the title at your local DMV, usually paying a fee. Use the CARFAX search as one important tool, along with a vehicle inspection and test drive, to make a better decision about your next used car. MojoMotors.com, a used-car classified ad site, said its recent research showed Alabama was the most expensive state for those items, at an estimated average … If you plan to buy a vehicle that doesn't meet these requirements, be sure to find out what modifications would be needed. The seller should provide a signed title and bill of sale. Buying a car out of state can be challenging, but it can also help you save money under the right circumstances. There’s a good chance the vehicle will never be delivered and you’ll never hear from the “seller” again. Action Alerts PLUS is a registered trademark of TheStreet, Inc. state that does not allow transfer of plates. It's important to familiarize yourself with your area's emissions regulations before committing to a vehicle. Test drive the car: Generally speaking, you should be able to visit and test drive the car you want to purchase. Maybe you’ve found a dealership that advertises great rates for first-time customers. It can save you so much in fact that it might just be worth the drive. Also, do not forget to consider the sales tax rate. You'll want to ask the dealer so that you're prepared to pay the amount when you go to register the car if the dealer can't collect it. This won't just save you extra time and money when it's time to get your car inspected, but it will also keep you safe. Alabama collects a 2% state sales tax rate on the purchase of vehicles, which includes off-road motorcycles and ATVs. A new car is often the second largest purchase (after a house) that a person will make in a lifetime. If you buy from a private party, you should be prepared to be stopped by law enforcement on the way home for not having a license plate. This will help you prove that the car belongs to you if you get pulled over. You need to make sure your new or used car financing is worked out early on. Of course, much of this paperwork will be temporary, given you'll need to title and register the vehicle in your home state upon returning. If you have questions about this story, please contact us at Editors@carfax.com. You need to ensure that the car is as-advertised and is in working order. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. Buying a car out-of-state can be a major undertaking. Your registration process will be delayed if your state requires emissions tests. Generally, when you're buying a car from an out-of-state dealership, the dealer handles all title and registration paperwork for you. This will give you proof of ownership for your drive home, as well as your trip to the DMV to get proper license and registration. When you buy your car from a dealership in another state, they may have the authority to collect state sales tax and send it to your state along with other paperwork for the title and registration. Sometimes buying a car out of state can save a lot of money. Check the automaker’s website to see whether the offers change based on location. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. You’ll probably have to show proof of insurance, as well. Tips for buying a car out of state. Bring along identification: This typically includes a government-issued photo ID (your driver’s license should do), along with a utility or tax bill that proves your address. If I buy a car in PA, will I have to drive it to Alabama to register it and get plates? It’s also a good idea to contact your insurance company immediately upon purchasing any car to be sure you’re covered for the ride home. The process of getting insurance for an out of state vehicle purchase is similar to insuring a car bought in the owner’s state of residence. Sometimes, when a person buys a car without doing enough research, being reasonable about finances, or comparing prices, he wants to return the car. If you are wondering when an out of state car title transfer is necessary in Alabama, it is important to know that you will be required to apply for a DOR certificate of title in situations when you are attempting to register a vehicle with an out of state title. For example, convertibles tend to be in greater demand – and command more money – in warmer climates than colder ones. How can I check out the car? No matter what your situation is, buying a car from a different state requires a couple more steps to help you avoid any issues along the way. If you buy a car from a dealership, they may give you a temporary registration sticker. If you purchase your vehicle at a dealership, they will likely collect their state's taxes on the spot and you will be required to make up the difference when you visit the DMV at home. It pays to check with your state DMV’s website beforehand to see what’s required to save you time and effort. Typically, if you are buying your car from a private seller, the sales taxes will be collected after the actual sale. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of. Remember the trip home: If you end up purchasing the vehicle, you also want to consider the drive home. Another good reason to buy a car out of state is if you have your heart set on a specific make and model. in Communication from Southern Illinois University and live just outside of Chicago. Every Car Comes With a Free Carfax Report. Carfax Used Car Listings Make it Easy to Find Your Next Car. There’s nothing to stop a buyer from crossing state borders to buy either a new or a used car. You should have this paperwork from the dealer when you purchased the car. By going to see the car in person, you can check for visual defects. 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