Are There Problems With Buying a Car in Another State Than Which You Live?

Whether you are buying a new or used automobile, occasionally that perfect car or deal is located in another state. You can usually buy it out-of-state and bring it home, however there are several factors to consider. The steps you must take will differ depending on your state, whether you are buying from a dealership or private party and whether you are financing or paying cash. You can have your bases covered, however, by considering a few things.

Financing

If you've found your perfect ride, chances are that you already have a plan to pay for it. If you are getting a loan through a financial institution, talk with your loan officer about their ability to handle an out-of-state transaction. Most banks and credit unions will be able to meet your needs, but may want certain documentation up-front before they will issue a check or wire funds to the seller or dealer. At a minimum, they will likely ask for a copy of the title to ensure that it's in the seller's name and is not salvaged. They may want to some additional guarantee, such as a signed purchase order or bill of sale including verbiage regarding the seller's obligation to release the title upon acceptance of payment.

Titling

Each state has different titling paperwork, such as a bill or sale and odometer disclosure forms. Your financial institution typically will educate you on the required documentation and may even submit it on your behalf. If you are purchasing your vehicle with cash, contact your state's department of licensing to find out what documentation is required. If you are planning a trip to complete the transaction and pick up the vehicle, be sure to bring the paperwork with you as some states require original signatures on title paperwork.

Taxes and Fees

Some states charge sales and other taxes and fees on vehicles, while others do not. If you are purchasing out-of-state through a dealership, you may be able to pay your taxes and fees up-front at the time of purchase. More than likely, however, you will need to pay at the time of titling by making a check out directly to your department of licensing. Be sure to clarify this in advance of the purchase, especially if you are getting a loan. Many financial institutions will allow you to include taxes and fees in the cost of the loan, but this usually needs to be coordinated before the transaction is complete. Depending on the state and the type of car, these amounts can be quite high.

Emissions and Inspections

Consider the condition and year of the vehicle before purchasing. Some states such as California and Oregon have strict smog and emission requirements that a vehicle must pass in order to be titled. Other states, like Texas, require an overall inspection of the vehicle before proper documentation will be issued. Newer cars that have been well-maintained are the safest bet.