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  • When purchasing a car, it’s important to consider which state you buy it in because it affects initial costs, such as taxes, fees, insurance, and warranties.
  • Some of the best states to buy a car in include Florida, Indiana, Maine, and Oregon.
  • The best state to buy a car is New Hampshire. It’s the cheapest state overall when it comes to factors like initial costs, taxes, and additional fees.

The cost of a vehicle may vary depending on where it is purchased, and even then, other factors can affect its price. For example, each state has different laws and taxes can be significantly more costly in one area over the other. Because of this, it may be more cost-effective to purchase a vehicle in a different state.

But which state is the best for cutting costs when purchasing a car?

Best States to Buy Cars: Factors to Consider

There are many reasons as to why vehicle costs vary from state to state. For example, some states sell vehicles at much lower prices than other states but additional costs like taxes, fees, and insurance can pad the price. Here are some important factors that can affect the price of a vehicle.

couple at a car dealership buying car
The cost of a vehicle may vary depending on where it is purchased, and even then, other factors can affect its price.

Initial Costs

It’s important to pay attention to the cost of the vehicle you plan on purchasing in every state because there’s a good chance you can get the same model elsewhere at a much cheaper price. For example, you can save money by purchasing a car in Florida compared to other states like California, which has relatively high sales tax rates (approximately  7.5%).

Secondhand Vehicles

Costs between buying a new car and one that’s pre-owned vary greatly, typically ranging from 10-70% of the original price. On top of that, the average cost of a used car varies from state to state, meaning you can cut tremendous costs by finding a good seller in the right state.

Taxes and Extra Fees

Another important factor to consider when purchasing vehicles in different states is how sales taxes vary depending on the state. Taxes will vary depending on where you purchase the vehicle as well as where you choose to register it.

There are also a lot of unexpected fees that come with purchasing vehicles like dealer fees, service fees, and even registration fees. Much like taxes, the costs of these fees will vary from state to state so it’s important to do your research.

Warranties and Insurance

Before buying any vehicle, it’s important to confirm two things: whether or not it has a valid warranty and if it will work in your home state. Each state has laws and restrictions when it comes to warranties, so it’s important to confirm that your vehicle will still be protected if you purchase it out of state.

Similarly, it’s good practice to contact your insurance company to see if your plan covers vehicles purchased away from your home state.

Finding the Right State to Buy a Car

Because there are so many factors to keep in mind when buying new cars according to state, it’s tricky to single out the undisputed “best” state to purchase a vehicle. On the other hand, it is significantly easier to single out the best states according to initial costs, secondhand deals, insurance, and additional fees.

Florida: Best at Cutting Costs

If you’re keen on getting your hands on a vehicle for cheap, Florida is one of the best states when it comes to cutting costs. Vehicles in Florida are approximately 10% less expensive than vehicles in other states, and this is because Florida has a large population of elderly people.

Approximately 20.5% of the state’s population is made up of people over the age of 65. As the elderly tend to drive less, many of the vehicles they own are traded, sold, or handed down to the younger generations who need them.

It’s also worth mentioning that vehicles in Florida will likely be in better condition compared to vehicles in other states due to the notable rarity of snow and other harsh weather conditions. When in Florida, you won’t have to worry as much about corrosion damage caused by salt and snow.

Indiana: Ideal for Buying Used Cars

Many drivers opt to buy secondhand vehicles to cut costs. Aside from being cheaper overall, these vehicles come with a lot of benefits such as having lower insurance rates and less depreciation. For drivers keen on getting a secondhand vehicle, Indiana is an excellent state to buy used cars. The average cost of a used car in Indiana is approximately 11.1% cheaper than the average cost of a used car all across the US.

Maine: Good for Auto Insurance

The cost of car insurance varies depending on which state you’re in, as well as what kind of vehicle you’re driving. Because of this, it’s important to pay attention to the make and model of a vehicle you’re interested in, as well as where you plan on living.

One of the best states for getting vehicles with affordable auto insurance is Maine. With annual premiums of approximately $864, Maine offers the lowest car insurance rates out of all the states in the US – especially since the national average totals around $1,318.

Oregon: Inexpensive Fees

Every vehicle comes with extra fees. This doesn’t refer to the buying price or insurance, but rather unexpected fees such as dealer fees, uncovered service fees, and taxes. Most vehicles are more expensive than their initial costs would suggest. These costs will vary depending on your state of residence.

If you’re interested in buying a vehicle without padded costs from unexpected fees, Oregon is the perfect state to buy a vehicle. You won’t have to worry about sales taxes in Oregon, and you likely won’t have to spend any more than $130 in additional fees when purchasing a vehicle.

Is New Hampshire The Best State to Buy a Car?

Though the initial cost of purchasing a vehicle in New Hampshire isn’t as cheap as purchasing a vehicle in Florida, drivers can save a lot of money by getting their vehicle here as opposed to anywhere else.

Even if you can get cheaper secondhand vehicles in Indiana, you’ll spend less on a new vehicle overall in New Hampshire.

Like Oregon, you won’t have to worry about sales taxes. Insurance is also much cheaper, with insurance premiums that cost approximately $941 annually.

About The Author
Written By Automotive and Tech Writers

The Research Team is composed of experienced automotive and tech writers working with (ASE)-certified automobile technicians and automotive journalists to bring up-to-date, helpful information to car owners in the US. Guided by's thorough editorial process, our team strives to produce guides and resources DIYers and casual car owners can trust.

Any information provided on this Website is for informational purposes only and is not intended to replace consultation with a professional mechanic. The accuracy and timeliness of the information may change from the time of publication.

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