Cheapest state to buy a car and truck

What states have the lowest sales tax on cars?

Are you in the market for a new or used car or truck? If so, you might be wondering, “Is it cheaper to buy a car out of state?” The simple answer is yes, it can be. However, the cost of vehicles can vary significantly from state to state, influenced by factors like taxes, dealer markups, local market demand, and many others.

In this blog post, we’ll delve into the states with the cheapest cars and trucks. We’ll explore strategies for buying cars in different states and provide valuable tips to help you make informed decisions. Whether you’re looking for a great deal on a new car or a used vehicle, this guide will help you navigate the complexities involved when you buy a car in a different state.

To get the wheels rolling, we’ll start by rating the top 10 states with cheapest cars.

Top 10 cheapest states to buy a car

The price of new cars reached new heights last year, highlighting the need to shop around for the least expensive state to buy a car. For many people, buying a car is a major purchase, but what many don’t realize is that where you live plays a significant role in how much it will cost you to buy and own a car.

Factors considered when determining the cheapest states to buy your car

There are various reasons why vehicles cost more or less depending on the state. For example, some sell vehicles at much lower prices. That being said, additional costs, such as taxes, fees, and insurance, also help to dictate the best state to purchase a car. States with no sales tax on cars are certainly a cheaper option.

Let’s take a quick look at some of the more important factors that can affect what state sells the cheapest cars.

Initial costs

If you’re wondering what state sells the cheapest cars, you should pay attention to the cost of the vehicle you’re planning to buy. You’ll likely find exactly the same model elsewhere at a much lower price. A good example is to compare your current location with other states, such as California, where the sales tax is relatively high at around 7.5%.

Secondhand vehicles

Another factor to consider when picking what states have the cheapest cars is to remember that the difference between buying a new car and one that’s pre-owned varies significantly. A pre-owned car typically ranges from 10-70% of the original price.

In addition, the average cost of a used car also varies considerably from state to state. Theoretically, you could cut the cost of buying a car by finding a good seller in the right state. Buying a car out-of-state is much simpler than ever before, thanks to the internet and the availability of reliable auto transport providers like WeShipCars.

Taxes and extra fees

Something else to consider when buying vehicles in different states is the amount of sales taxes that vary by state. These will vary depending on where you purchase the vehicle and also where you register it.

Alongside taxes, there are additional fees that accompany any vehicle purchase. These include dealer fees, service fees, and registration fees. As with taxes, these also vary depending on the state. It’s vital for research to play a key role when looking at which state sells cars the cheapest.

Warranties and insurance

Two final factors to consider when weighing up which state has the cheapest cars are insurance and warranties. Confirm with the seller whether or not the vehicle has a valid warranty and if it will be valid where you live. When it comes to warranties, individual states have laws and restrictions that need to be taken into account. It’s, therefore, critical that you confirm the vehicle will be protected if you’re buying it out of state.

Similarly, you should also contact your insurance provider to check that your plan covers vehicles purchased out of state.

Now that we’ve sorted out some of the ground rules, it’s time to introduce the best state to buy used cars. We’ve ranked them from the lowest to the highest cost. The prices are current as of August 2023.

1. Oregon

• Average price for a new/used car: $51,299-$28,218
• Average new/used dealer fees: $353-$353
• Sales tax: 0.00%

Oregon is the top state on our list of places where cars are cheaper in the US. There is no sales tax, which makes a massive difference, and dealer fees are extremely low.

2. Montana

• Average price for a new/used car: $56,186-$30,906
• Average new/used dealer fees: $537-$537
• Sales tax: 0.00%

If you want to buy a car in Montana, you benefit from a double whammy in terms of 0% sales tax and extremely low dealer fees. Although, you will find that car prices are around 15% higher than the national average.

3. New Hampshire

• Average price for a new/used car: $45,928-$25,263
• Average new/used dealer fees: $1,372-$1,372
• Sales tax: 0.00%

Is New Hampshire the answer to the question “What state has the cheapest cars?”? Not quite, but it does have below-average dealer fees and car prices.

4. Alaska

• Average price for a new/used car: $58,377-$32,111
• Average new/used dealer fees: $315-315
• Sales tax: 1.81%

Alaska's average car price is a massive 20% above the national average, but its saving grace is the lowest dealer fees in the country.

5. Delaware

• Average price for a new/used car: $47,502-$26,129
• Average new/used dealer fees: $2,486-$2,486
• Sales tax: 0.00%

Only four states in the country levy zero sales tax on car purchases, and Delaware is one of them. Car prices are about 2% below the national average, but the relatively high level of dealer fees means this state can’t climb any higher.

6. Hawaii

• Average price for a new/used car: $46,718-$25,698
• Average new/used dealer fees: $2,179-$1,620
• Sales tax: 4.44%

Hawaii offers certain cars at 3.58% below the national average. However, this state doesn’t quite make it into the top five cheapest place to buy a car in the USA because of the 4.44% sales tax and four-digit dealer fees.

7. Virginia

• Average price for a new/used car: $48,656-$26,762
• Average new/used dealer fees: $2,488-$1,971
• Sales tax: 5.77%

Car prices in Virginia are in line with national averages. However, sales taxes are moderate. Dealer fees are below national norms, although new car fees are among the highest. Virginia might not be the cheapest place to buy a car in the US, but it’s among the top ten.

8. Wisconsin

• Average price for a new/used car: $49,080-$26,997
• Average new/used dealer fees: $2,753-$2,069
• Sales tax: 5.43%

In Wisconsin, dealer fees are among the highest in our top ten list of which state has the cheapest cars. However, when looked at nationally, vehicles in this state are still quite affordable. Sales taxes are moderate, and car prices are just 1.30% above the national average. Hence the reason for Wisconsin sitting in the top eight.

9. New Mexico

• Average price for a new/used car: $50,770-$27,926
• Average new/used dealer fees: $1,603-$1,230
• Sales tax: 7.61%

New Mexico's sales tax is high—it is the 16th highest in the nation. However, the state scores well when it comes to affordability. Dealer fees are relatively reasonable, and prices are around 4.79% above the national average. It’s not the cheapest place to buy a car in America, but it is definitely worth considering.

10. North Carolina

• Average price for a new/used car: $50,100-$27,558
• Average new/used dealer fees: $1,996-$1,623
• Sales tax: 7.00%

The factor that lets North Carolina down is the relatively high sales taxes. Aside from that, the relatively low dealer fees help you make things more affordable. Typically, prices for new and used cars run at around 3.4% above the national average.

Finding the best states to buy a car

If you want to find the cheapest state to buy your car, there are some steps you should follow. They include:

• Make the Most of Available Online Tools: There are some invaluable online resources you can use to compare prices across different states. Check out websites like Autotrader, Cars.com, and Kelley Blue Book.
• Set Up Alerts: Many of the online marketplace platforms allow you to set alerts. This means you can track vehicles you might be interested in and take advantage of any price drops.
• Visit Local Dealerships: Take the time to compare local and out-of-state dealerships. If you find cheaper prices, don’t be afraid to negotiate with dealers.
• Engage in Community Forums: Many online groups allow local buyers to share their experiences and tips for finding the cheapest state to buy a car.
• Timing is Critical: Pricing typically depends on the time of year. Holiday weekends and end-of-year sales events tend to mean very attractive promotional pricing that could save you a great deal.

Which state sells the cheapest cars in terms of initial cost?

The initial cost of a vehicle is a primary concern for anyone looking to grab a bargain on their latest car purchase. In terms of used car sales, Florida has the cheapest prices. This is all down to a few important factors. Firstly, the Sunshine State has one of the largest populations of older people. In addition, the climate is very favorable. Roads tend not to be salted, so Florida cars don’t suffer from salt damage.

Worst state for initial cost

California is the worst state for initial car costs because of the high cost of living. It also has a relatively high sales tax rate (7.25%), high gas prices, and expensive car repairs. All these factors make car ownership very costly for many Californian residents.

Best state for unexpected fees

When deciding which state has the cheapest cars, we considered far more than the initial cost. You must pay a variety of fees when purchasing a vehicle, and these all add to the cost. They tend to vary from dealership to dealership. On average, Alaska and Oregon have the lowest unexpected car purchase fees, typically not running to more than $350 in total.

Worst state for unexpected fees

If you want to keep your unexpected fees as low as possible, you’d better not be looking in Alabama. In this state, they’re significantly higher than most other places in the country. On average, you can expect to pay over $2,300, which is 18 times more than Oregon.

Best state for auto insurance

In most states, car insurance is a legal requirement, so it’s important to keep this in mind when looking at what state has the cheapest cars. As you might expect, not all states are created equal. Michigan, for example, has a reputation for high insurance costs. Maine, on the other hand, offers some great deals on car insurance. In North Dakota and Iowa, insurance is also more affordable.

The 10 cheapest states for auto insurance are:

• Maine: $949 (average annual premium)
• Idaho: $992
• Vermont: $1,053
• Ohio: $1,083
• Wisconsin: $1,145
• North Carolina: $1,165
• Indiana: $1,190
• Iowa: $1,215
• Hawaii: $1,241
• Tennessee: $1,264

What is the cheapest state to buy a new car?

Oregon is often considered the best state to buy a new car due to its lack of sales tax. This can lead to significant savings, especially on high-value vehicles.

However, other factors, such as dealer markups, registration fees, and local market conditions, should be considered. While Oregon offers a tax advantage, it’s always wise to shop around and compare prices from different dealerships, both in-state and out-of-state.

Ultimately, the best state to buy a new car in 2025 depends on various factors and individual circumstances. By researching and comparing prices, you can find the best deal on your next vehicle.

What state has the cheapest used cars?

While there isn't a definitive answer to the question of "which state has the cheapest used cars," several states consistently offer more affordable options.

States known for having lower-priced used cars include:

• Ohio: Ohio is often cited as a state with relatively low-priced used cars. Factors like lower population density and a high number of dealerships can contribute to more competitive pricing.
• Indiana: Like Ohio, Indiana has a relatively low cost of living, which can translate to lower prices for used cars.
• Michigan: With a strong automotive industry, Michigan often has a good supply of used cars at competitive prices.
• Wisconsin: Wisconsin's lower cost of living and decent supply of used cars can make it a good state for finding affordable options.

While these states offer attractive pricing, it's crucial to consider factors such as vehicle condition, mileage, and specific dealership deals when making a purchase. Always do your research and compare prices from different dealerships to ensure you're getting the best deal.

Benefits of buying a car out of state

While it’s very tempting to purchase a car locally, there are several advantages to buying a car out of state. They include:

• Cost Savings: If you shop around and look at sales outside your state, you may find considerably lower prices or higher-value vehicles, particularly in states that don’t charge sales tax or have lower registration fees.
  • Flat Fees vs. Value-Based Fees: Some states, like New Hampshire, charge a flat registration fee regardless of the car’s value. Others, like California, base their fees on the car’s market value.
  • Annual vs. Biennial Registration: In some states, there are annual registration renewals, while others allow biennial registrations. This difference can influence long-term costs and budgeting.
• Wider Selection: Depending on the location where you’re looking, you’ll find a wide range of vehicles available. You might struggle to find your dream car locally, but that doesn’t mean there’s not a dealer across the country who has it sat on their lot.

What to consider when shopping for a car out of state?

When shopping for a car out of state, there are several things to consider. For example, finding a car in another state is one thing, but you’ve then got to figure out how you’re going to transport it. If you plan to drive the vehicle home, you might have to register it in the state you purchased it in and then transfer the registration when you get home.

In addition, you’ll most likely have to have insurance in your home state and the purchasing state. If you transport the car on a trailer or allow a reputable car shipping company like WeShipCars, to move your purchase, you won’t have to worry about these factors. However, there will be the cost of car transportation to factor into your calculations.

Registration laws vary from state to state and have the potential to make buying a car in another state quite expensive.

Sales tax is another important factor for anyone wondering are cars cheaper in other states. In some states, you do not have to pay sales tax when you buy your car, but you may incur it when you bring your vehicle home.

Cheapest state to buy a truck

When comparing prices, New Hampshire is the best state to buy a truck. It has the lowest registration fees and sales taxes and also the cheapest used trucks. There are a few more contenders for the title of the cheapest state to buy trucks. Oregon and Florida, also located in the Northeast, are likely to have better used truck prices and lower registration fees. All these factors contribute to the lower cost of ownership, making them a good example of the best state to buy trucks.

What states have the lowest sales tax on cars?

States with lower sales tax rates can lead to significant savings when purchasing a car. States like Oklahoma, North Carolina, Colorado, and Alabama have relatively low car sales tax rates, making them attractive options for car buyers. However, it's important to consider other factors like dealer markups and local market conditions when making a purchase.

Buying a car in states without sales tax on cars

If you buy a car in states with no sales tax on vehicles, you could benefit from huge savings. Delaware is one example, exempting sales tax from car purchases. Purchasing your vehicle in this state could save hundreds or even thousands of dollars upfront when comparing purchase prices.

Another option is buying a car in New Hampshire to avoid car sales tax by state. However, there are legal implications to be aware of. Tax residency is an important consideration. Tax authorities may investigate whether you’re a resident of Montana or simply trying to circumvent your home state’s tax laws. The general advice is to seek guidance from legal professionals who specialize in tax matters. They will have the necessary expertise to navigate New Hampshire’s intricate legal waters.

Another good option if you want to purchase your car in states without vehicle sales tax is to head to Montana. In certain scenarios, you can get registration with no sales tax.

Auto sales tax by state

Below is a list of automobile sales tax by state for your reference:

• Alabama 2.00%
• Alaska 0.00%
• Arizona 5.60%
• Arkansas 6.50%
• California 7.25%
• Colorado 2.90%
• Connecticut 6.35%
• Delaware 0.00%
• Florida 6.00%
• Georgia 7.00%
• Hawaii 4.00%
• Idaho 6.00%
• Illinois 6.25%
• Indiana 7.00%
• Iowa 5.00%
• Kansas 7.50%
• Kentucky 6.00%
• Louisiana 4.45%
• Maine 5.50%
• Maryland 6.00%
• Massachusetts 6.25%
• Michigan 6.00%
• Minnesota 6.50%
• Mississippi 5.00%
• Missouri 4.23%
• Montana 0.00%
• Nebraska 5.50%
• Nevada 6.85%
• New Hampshire 0.00%
• New Jersey 6.625%
• New Mexico 4.00%
• New York 4.00%
• North Carolina 3.00%
• North Dakota 5.00%
• Ohio 5.75%
• Oklahoma 4.5%
• Oregon 0.00%
• Pennsylvania 6.00%
• Rhode Island 7.00%
• South Carolina 5.00% (or $500)
• South Dakota 4.00%
• Tennessee 7.00%
• Texas 6.25%
• Utah 6.96%
• Vermont 6.00%
• Virginia 4.15%
• Washington 6.80%
• West Virginia 6.00%
• Wisconsin 5.00%
• Wyoming 4.00%

Understanding the varying tax implications when purchasing a vehicle in the United States is crucial. The amount you pay for auto taxes by state can vary significantly. While some states, like New Hampshire, have no state sales tax on vehicles, others have rates exceeding 7%. These automobile taxes by state are in addition to other costs, such as registration fees. Understanding the highest car registration fees by state is essential for budgeting the total cost of vehicle ownership.

State with the highest cost of vehicle registration fees

While many states have various fees associated with vehicle ownership, including sales tax, title fees, and local taxes, the state with the highest base vehicle registration fees is generally considered to be Oregon.

Here's why Oregon stands out as the state with the highest cost of vehicle registration fees:

• High Base Fees: Oregon has some of the highest base registration fees in the U.S. For new vehicles, the fees can range from $268.50 to $636.50 for a two-year registration. Renewal fees for existing vehicles also range from $122 to $306 for two years.
• Factors Affecting Fees: The exact amount you pay in Oregon depends on factors like the vehicle's model year and its miles per gallon (MPG) rating. Newer and less fuel-efficient vehicles typically have higher fees.

It's important to note a few things:

• Other States Have High Costs Too: While Oregon has the highest base registration fees, other states have significant costs associated with vehicle registration when you factor in other taxes and fees. For example, some states have high title fees, local taxes, or additional fees for electric or hybrid vehicles.
• Fees Can Change: Vehicle registration fees are subject to change, so it's always best to check with the state's Department of Motor Vehicles (DMV) or equivalent agency for the most up-to-date information.

If you're curious about how other states compare, resources like the World Population Review and Compare.com provide detailed breakdowns of vehicle registration fees and other costs by state.

The cheapest vehicle registration state is New Hampshire. It doesn’t charge any sales tax, and its fees are very low and flat. In other words, the registration fee you pay is not based on the value of the car.

Cheapest state for car registration

Determining the absolute cheapest state for car registration can be tricky, as costs can vary based on factors like vehicle type, age, and local taxes. However, based on available data, Arizona and Mississippi are frequently cited as having some of the lowest base registration fees.

Arizona

• Low Base Fee: Arizona has a very low base registration fee of just $8.
• Public Safety Fee: An additional $32 public safety fee brings the total to $40. Even with this fee, Arizona remains one of the most affordable states.
• Vehicle License Tax (VLT): While Arizona has a low base fee, it's important to consider the Vehicle License Tax (VLT). This is an annual tax based on the vehicle's value, but it decreases each year as the vehicle ages.

Mississippi

• Low Renewal Fee: Mississippi has a low renewal fee of $12.75.
• First-Time Registration: The fee for first-time registrations is slightly higher at $14.
• Ad Valorem Taxes: Like Arizona, Mississippi has ad valorem taxes based on the vehicle's value and the county you live in. These taxes can vary, so it's important to factor them in.

Important considerations

• Other Fees and Taxes: Even in states with low base registration fees, other costs, such as title fees, local taxes, and potential personal property taxes, might need to be considered.
• Vehicle Type and Age: Some states have different fee structures for different types of vehicles or based on the vehicle's age.1
• Changes Over Time: Fees and taxes are subject to change, so it's always best to check with the state's DMV for the most current information.

To get a complete picture of the costs in any state, it's recommended to check with the state's DMV or equivalent agency and consider all potential fees and taxes associated with vehicle ownership.

Worst states to buy a car

Several factors can make certain states less favorable for car buyers. Here are some of the worst states to buy a car, considering these factors:

• High Taxes and Fees: States with high sales taxes, registration fees, and other taxes, such as personal property taxes, can significantly increase the overall cost of buying and owning a vehicle.
• California: High sales tax, registration fees, and expensive car repairs make California costly.
• Alabama, Arizona, Colorado, and Tennessee: These states have high additional fees that can add around $2,000 to the purchase price.
• High Documentation Fees: Dealership documentation fees can vary widely by state and can add hundreds of dollars to the purchase price.
• Alabama, Virginia, and North Carolina: These states have some of the highest doc fees, ranging from $485 to $599.
• Florida: Florida has no cap on doc fees, which average around $995.
• Limited Inventory: States with limited new car inventory can make it harder to find the specific vehicle you want and may lead to higher prices due to less competition.
• Florida, California, Georgia, New Jersey, and Texas: These states have been identified as having lower new car supply.

Other Factors: Other factors to consider include:

• Emissions Testing: States with strict emissions testing requirements can add to the cost of ownership.
• Shipping Costs: If you're buying from a state with limited inventory or from a distant location, shipping costs can be significant.

Based on these factors, states like California, Alabama, Arizona, and Florida often rank among the worst states to buy a car due to a combination of high taxes, fees, and other costs.

Helpful public discussions on this topic

• Best state or area to fly out to buy a car or truck and drive back? Looking for value and condition
• Is there a state that is cheaper to buy cars in?
• The cheapest states and cities for used car shopping