In this video post I cover 4 things that you need to know before buying a car out of state. As a former Mercedes-Benz car salesman I’ve sold cars out of state and I’ve even purchased cars out of state for myself. Buying a car out of state expands your market, gives you more opportunities to purchase the car you want at a lower price, and also gives you an opportunity to find different versions of the car you want in better condition.
Aside from the benefits, most new and used car buyers also want to know the risks. What can go wrong? Travelling out of state to buy a car costs real time, money, and energy. If you show up and the car is not as promised, or information wasn’t disclosed that should have been, then you lose what you put in to that point. The biggest potential mistake of all though is that you buy something that ultimately cannot be registered in your state, or requires repairs, modifications, or additional taxes that you didn’t anticipate. This mistake can cost thousands.
In general, most people buy cars out of state without any complications at all. This video is outlined into 4 distinct sections that you need to understand before you go to avoid making a big mistake.
Safety Inspections & Emission Requirements
Before exploring your options out of state you need to understand the different safety and emission regulations of each state relative to your own. An easy mistake buyers can make is to believe that just because a vehicle is registered in another state that the same vehicle can be transferred cleanly to their own state.
If you purchase a vehicle in a state that doesn’t require safety inspections, issues may arise when transferring that title to a state that does. Similar issues can arise when confronted with emissions standards that are localized, even within the same state.
I personally bought a ’94 Jeep Wrangler that had spent it’s life in Florida. My Wrangler failed NO2 (nitrogen dioxide) emissions inspections here in Cleveland because at some point in the life of the Jeep the catalytic converter was stolen (thieves looking for platinum).
Negotiating Out of State
Negotiating out of state is a big concern for a lot of buyers. But in general the process is the same as negotiating in state. On the car blog here and on my YouTube channel as well I cover all things vehicle negotiation. The biggest difference is going to be your ability to walk away. I explain exactly what to say when negotiating by email to get a great price in advance. Although in general you can get most of the best possible deal negotiating remotely, nothing beats being at the dealership in person. Presence is customer leverage. A dealer simply has a harder time to walk away from someone physically standing in front of them, as opposed to interacting with an offer over the phone or by email. But when you’re coming from out of state, the dealer has your number. They know how hard it would be for you to actually walk away from the table.
Trade-Ins and Shipping
Out of state buyers have more flexibility than most people realize. As a car salesman I once worked out a deal with a man over the phone several hundred miles away and a state away. We agreed to a price in advance, worked out all the financing. I drove the car to him, and after the test drive, he signed the paperwork and I drove his trade in back.
Car dealers are willing to explore a number of creative options to get a deal done. They’re willing to offer fair valuations to trade-ins remotely. Using videos and photos usually enough can be assumed to make a competitive trade in price offer.
Cars can be shipped and trade ins and be transported back the same way they came. Typically shipping is going to range from ~$1-$2/mile in the ballpark of $500-$2,000. The buyer pays this premium, but for the right vehicle or condition this can be a small price to pay for the right buyer
Taxes and Registration
New and used car tax policy varies significantly by state. This helpful article explores the different sales tax rates and tax exclusions and exemptions for each state.
What’s important to know about taxes when buying a car out of state is exactly what you will owe your department of motor vehicles. This is an easy mistake for car dealers to make as they can miss the nuances of state and local tax codes they are not familiar with.
For example, in some states, manufacturer rebates are taxed. In most states, trade in value is exempted from sales tax when purchasing a new car. These types of mistakes are easy to make when working with an out of state dealer. But ultimately when it comes time to register the out of state vehicle you purchased the Department of Motor Vehicles in your state will require the full amount of taxes be paid before you receive permanent plates.
All Things Vehicle Negotiation
I’ve helped thousands of YouTubers save money and time on their next vehicle purchase with the #CarBuyingTips, #PersonalFinance, and #InvestmentAdvice on my YouTube channel and on notwaitingtolive.com/car-blog. I recommend the following videos to best negotiate your next vehicle purchase:
How to Make Lowest Initial Offer in Used Car Negotiation: https://youtu.be/ozkOrmz_8lw
How to Make Lowest Initial Offer in New Car Negotiation: https://youtu.be/TcRVHIFSJHw
How to Best Negotiate Used Car Price: https://youtu.be/zgT_4khybEw How to Best Negotiate New Car Price: https://youtu.be/BHgwd6YKWlU
How to Best Negotiate a Lease: https://youtu.be/ImT61XQf3VQ
How to Negotiate by Email: https://youtu.be/pJxjHpcPQdM
Cash Buyers Pay More (What to Say to Save Money): https://youtu.be/uc2W0oBdTU0
Online Car Buying (How Much Are You Overpaying?): https://youtu.be/HnR8XOMSvs0
The Story of the Biggest Discount I Ever Gave As a Car Salesman: https://youtu.be/LXz3mS2PN-g How Much Car Can You Afford? (The #1 Rule to Know): https://youtu.be/OzLfnZKV9OA
5 Myths About Buying at the Car Dealership: https://youtu.be/XnuxP9BifXU
How to Sell a Car For Sale by Owner: https://youtu.be/jlG0PEa8IIc