There are a number of reasons why you would consider buying a car from a dealership in a state other than where you live such as price, selection and condition. The popular question from many automobile buyers is how do I buy a car out of state and drive it home? This article contains the information you need to know when you buy a car out of your home state. The people that ask this question are from all over and not necessarily near the border of another state, but they have found a vehicle and they are willing to make a purchase in a state other than their own in order to get exactly what they want.
Out of State Car Buying and Taxes So You Drive It Home
Laws vary from state to state where taxes are concerned, but there are a few standing rules of thumb that will help you know what to expect when you want to know how to buy a car out of state and drive it home. Some states have agreements with neighboring states where the dealer is required to collect the sales tax where the vehicle will be registered and licensed and the tax is calculated at the rate where the owner is going to register the car. For example; if your state and county of residence sales tax rate is 7% and the state of the dealer that is selling the car is only 6% the dealer will collect the 7% sales tax and pay the state. Even though the selling dealer usually collects 6% sales tax they will collect 7% because you are from the state that charges 7%.
Now to make things more confusing, not all states have agreements between states and therefore the dealer will not charge the buyer any sales tax at all at time of purchase. That’s right they will not charge you any sales tax at all on your vehicle purchase, but when you get back to your home state and get your license plates or vehicles tags you will be required to present your paperwork from the purchase and pay the state and county sales tax along with any charge for license plates. So be prepared to pay your tax when you want to buy a car out of state and drive it home.
Wait there is one more scenario when it comes to how you buy a car out of state and drive it home and this when you finance a vehicle and pay the sales tax. Lenders that finance vehicles typically will require the financing dealership to collect the sales tax at the time of purchase and then the dealer will write a check to the state for the taxes. The dealer will give you the buyer a check made out to the state for taxes that you will in turn give to the D.M.V. when you get your license and registration. The lender feels more comfortable this way and does not have to worry about a government agency putting lien on the vehicle for taxes because a government lien takes priority of a lender lien. Which is always part of the process for buying a car.
Out of State Car Buying and License Plates or Registration
Buying an automobile in a state other than the state where you reside is not uncommon and therefore in most states the dealerships will provide or charge you for a temporary tag or license plate. The car dealer fees are the same amount that the state charges and is usually valid for 7 to 10 days. That should be sufficient time for you to buy a car out of state, drive it home and get to your local licensing authority.
Laws can vary from state to state, but these cover most of what you need to know. Some states may require a police department inspection to check used vehicles for warrants and others may have emissions requirements to be met. Either way that is the long and short answer of how do I buy a car out of state and drive it home.
- Car Buying Paperwork – Bill of Sale
- Beware of the Car Dealer Fees and Hidden Costs
- No Haggle Car Sales – Yeah Right!
- Steps for Buying a Used Car Privately
- The Dealer Prep Fee Scam