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What to Know When Buying a Car out of State

last updated October 22, 2018 by

Imagine returning home from a business trip in a different state and you happen to pass by a dealership with excellent cars. You decide to step in and the prices are so affordable that you can’t fight the urge to buy your dream SUV. Can you buy a car in another state? Yes, it’s legal.

Are you considering crossing state borders in order to purchase a new ride? The first step is knowing what’s expected from you as a buyer as well as the seller’s obligations.

Tips:

Buying a Car out of State

1. How to buy a car out of state from a dealer

1. Face to Face or Virtual transaction?

While shopping for a car, you’ll visit a few dealership websites to check out their stock. What happens when you find a car that you like on sale by an out-of-state dealer? There’re two options to get things moving.

Some people prefer driving all the way to the dealership. Even though this approach is time-consuming, it’s the only way to verify everything said on the website. You’ll get to view the actual car and even go on a test drive. In addition, you can ask all the questions you need and get a feel of the dealership’s customer care.

The second option is doing everything over the phone or online. After paying for the car, you wait for a phone call to discuss shipping options. While this method is time-saving and easy, it exposes you to a number of unseen situations. For instance, you paid for a black SUV but the dealership shipped a red one instead.

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2. Receiving your car

After the dealership confirms payment, the next step is handing over the purchased vehicle. Buyers getting cars from across state boundaries really don’t need shipping. You can just wait for the weekend then drive to the dealership and get your car. Doing this enables you to test your vehicle at various speeds.

Shipping is convenient when you’re getting your car from very far. For instance, purchasing a car in Florida when you reside in Louisiana. It’s also safe because dealerships only use shipping companies with good reputations to deliver cars.

Since each dealership sets its own fees, you need to have some money prepared. This fee cannot be included in your car loan payments.

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3. Taxes

It’s important to notify the dealership that you reside in a different state before entering into price negotiations. Why? Because the dealership is responsible for collecting and submitting sales tax on behalf of the government. Doing this ensures that your car title gets processed in time.

Also, it’s important to know your state’s current sales tax. A dishonest dealer might inflate figures when he or she senses that a customer is ignorant. Are there any other fees collected by the dealership? Yes, there are. The dealership also collects title fees.

4. Useful tips for buyers

1. Check the dealership’s reputation

As a rational customer, you should always do thorough due diligence before purchasing an item. You don’t want to pay a lot of money for a car only to be told that you’ll receive it after 2-3 months since it’s out of stock.

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Also, if you’re planning to apply for an auto loan, you want to find out the interest rates beforehand. That’s why you should visit consumer review websites like the Better Business Bureau.

2. Ensure that the seller sends all documents on time

One common reason why disputes occur in virtual-based transactions is due to miscommunication.

For instance, after paying shipping costs, the dealership promises to email the receipt within a day. However, when the shipping date arrives, your car doesn’t get delivered because the dealership forgot to send the receipt on time.

How can you avoid this situation? Follow up on the dealership consistently when it comes to paperwork.

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2. Buying a car from a private seller

A private sell can take place between you as the buyer and a seller who might be a friend or relative. It could also be a motorist you interacted with on an online car forum with a good reputation. In this situation, it’s tricky to do the deal over the phone. So, prepare yourself for a face-to-face transaction.

The Do’s

1. Get close up pictures of the car

Before planning to meet with the seller, your first step is finding out whether he or she is honest. Since everybody has a smartphone and easy access to the internet, any seller should send several photos of the car to you.

Find out whether the car has rust by asking to see the engine. You can gauge the quality of paint by analyzing these images. Alternatively, you can request the seller to give you a virtual tour via SnapChat.

2. Walk away if you don’t like the car

If you notice glaring issues that the seller intentionally concealed, just walk away. Buying such a car is taking on a major liability in terms of repair costs. Apart from quality, some sellers will lie about the car’s color or features. Bottom line, avoid dealing with dishonest sellers.

3. Check for active liens

It’s illegal to buy a car with a lien without approval from the lien holder. You’ll notice a lien if the seller has an outstanding auto loan balance. Remember to check whether there are any mechanic liens.

4. Check the required DMV paperwork

The seller should provide proof that the DMV recently ran a full inspection and smog test. You need this paperwork to register your new car in your state.

5. Renegotiate the price if the car has minor issues

This is where you meet the seller and inspect the car up close. You might find some tears in the car seats or an unresponsive side mirror. In this situation, renegotiate for a lower price if the seller didn’t send you pictures of these damages.

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6. Be honest with your sales tax

The government loses a lot of money in this area because most buyers and private sellers deliberately understate prices. However, tax evasion carries heavy consequences. Choose the wise path by stating the correct price and pay your sales tax in full.

3. Car auction in a different state

Car auctions attract mechanics and enthusiasts looking for cheap vehicles to tear apart and obtain decent spare parts. The vehicles you’ll find range from rebuilt titles to virtually outdated cars that no longer match emission rate standards.

Use these four tips

 1. Find out the state of car titles

Avoid buying no-title cars despite how affordable they seem. A no-title car usually has a bad history and the title recovery process will consume plenty of time and money. It’s also shocking to learn that the auctioneers won’t cover any cost related to title recovery.

2. Attend the pre-viewing session

Before bidding, buyers get a couple of hours to walk around the lot and do brief inspections. You get to open the door, hop in and take note of the interior. The auction house allows you to pop the hood open and have a keen look at engine components.

Make sure you arrive early enough so you can attend the pre-viewing session.

3. Find out whether the inspection house offers inspection service

A thorough inspection enables you to figure out how much time and money you need to get the car in good shape. Some auction houses outsource this service to local auto mechanic shops and buyers pay a fee to access this service.

4. Focus on title-attached cars

A title-attached car means that an auctioneer can sell it while waiting for the car title within a specified period. What advantage does it offer you? It gives you the right to return the car and demand for a full refund.

4. Three mistakes to avoid when buying a car from a different state

1. Failing to use a car loan calculator

A car loan calculator enables you to determine your monthly payments when signing up for credit financing. Despite its free availability, a large group of buyers ignore it and end up with unmanageable car payments.

Be smart and use this tool before signing up for an auto loan.

2. Doing shallow background checks on a private seller

Some private sellers are infamous in online car forums for ripping off buyers. It’s wrong to fully trust someone based solely on information available on their Facebook profile. Some buyers even don’t bother to call the seller to find out whether the published contacts are genuine.

3. Failing to do consistent follow-ups

After paying the down payment in an online car purchase, it’s your responsibility to follow up on receipts. Assuming that the seller is working on it is wrong because the accountant might have misplaced your receipt.

5. Be smart!

Following the tips explained in this post will enable you to get value for money in your next car purchase. If you have friends or relatives who know how to inspect cars, ask them to accompany you to the dealership or private seller’s residence.

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