Thinking about buying a new vehicle from another state in the hopes of avoiding taxes? You don't pay TN tax at all, and not Alabama tax until you register your vehicle in AL and get your tags. So, if you hail from that northeastern commonwealth and are buying out of state, you can drive the car as far as the Connecticut, New Hampshire, New York, Rhode Island, or Vermont border, but will then need to park the car and call a cab to take you the rest of the way. If you are wondering when an out of state car title transfer is necessary in Alabama, it is important to know that you will be required to apply for a DOR certificate of title in situations when you are attempting to register a vehicle with an out of state title. Crossing state lines is a challenging part of buying a new or used vehicle. It would be best if you tried to find a car you can afford that is located in your state or, at the very least, in one nearby. Steps to Buying a Car Out of State First, obtain a vehicle history report for the car you plan to purchase. For new cars, manufacturer rebates and financing incentives can vary by region. However, if you're buying from a private seller, you'll need to handle title and registration paperwork on your own. Additional Car Buying Tips to Know. CARFAX does not have the complete history of every vehicle. You will need to provide proof that the vehicle meets the California Air Resources Board's requirements or have it modified to meet their standard. Once you’ve bought the car, you have a certain number of days to register the title at your local DMV, usually paying a fee. Have a mechanic you trust inspect the car. Shopping for a car out of state is one of the best ways to find the car you’ve been dreaming of and also a way to find a better deal. You may also have to pay any applicable local sales taxes. Show them the paperwork for the car. Dealer incentives. Safety Tips for Buying a Car in Alabama Buying a car is a big investment, and though many sellers are honest about the condition of their vehicle, you can never be too careful. This is especially true if you live on or close to the border of another state. This will cost you some money up front, but it is money well spent. If you plan to buy a vehicle that doesn't meet these requirements, be sure to find out what modifications would be needed. Opting for an out of state car purchase is different than buying a car in Washington. On the other hand, when performing an in-person out of state title transfer after buying a vehicle without a title from another state, motorists will be required to submit a manufacturer’s statement of origin (MSO) document. New vs. Used Car Buying from Out of State. Buying a car out of state can be a challenge, but the benefits can be worth it. If the car you want is difficult to find or you have found it at a significantly cheaper price point, then it might be worth the trouble of buying it out of state. With the passage of Acts 2015-503 and 2015-551, sales of automobiles, motorcycles, trucks, truck trailers, or semitrailers, excluding motor homes and travel trailers, that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama, are subject to the Alabama sales tax in an amount equal to the state automotive sales … If you’re buying a used car from a private party, you may have to pay taxes on the transaction price when it’s registered. However, some cars simply aren’t widely available in certain areas. So, if you can find a similar vehicle at a comparable – or even slightly higher – price within state lines, you should consider that car first. Follow these simple steps to ensure that your vehicle purchase goes as smoothly as possible. Ask preliminary questions before going to see the car. These might negate any savings you might achieve from buying your car out of state. You should have this paperwork from the dealer when you purchased the car. To avoid issues like the ones mentioned above, you should consider obtaining a Carfax Vehicle History Report before purchasing a vehicle. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of. At a minimum, make sure you have the title of the vehicle and proof of insurance. Alabama State Code 810-5-75-.35, Section 40-12-260 (b) (2) requires individuals who reside in the state to obtain a license plate for any new or used motor vehicle within 20 calendar days of purchase or transfer of ownership. Another good reason to buy a car out of state is if you have your heart set on a specific make and model. What’s more, prices for specific types of used vehicles can vary by region. This can potentially help you save a lot of money if dealerships in your area aren't running similar deals. Many automakers offer deals on their certified used cars, like they do on new cars. Worst State to Avoid Unexpected Fees: Alabama If you want to avoid paying unexpected fees, steer clear of Alabama. No matter what your situation is, buying a car from a different state requires a couple more steps to help you avoid any issues along the way. See who has the best deals this month! Of course, much of this paperwork will be temporary, given you'll need to title and register the vehicle in your home state upon returning. Be wary of out-of-town used-car classified listings that involve a third-party agent using a funds-transfer service. You’ll receive a signed title from the seller that names you as the current owner, but you will have to transfer the title to your home state, and register the car there as well. Once you have found the car of your dreams, assuming it is a new vehicle, it’s always a good idea to ask for a copy of the window sticker. If you have questions about this story, please contact us at Editors@carfax.com. It's important to familiarize yourself with your area's emissions regulations before committing to a vehicle. Therefore, in addition to completing an out of state vehicle title transfer when applying for a DOR title as a new state resident, you will also need to transfer the car title of a vehicle with out-of-state … CARFAX Vehicle History products and services are based only on information supplied to CARFAX. If you plan to move from a state without sales taxes to one with sales taxes, you should buy the car and register it about three months before your move. You will need to go to the DMV within a certain amount of time -- usually anywhere between 30 to 60 days -- to acquire these essential documents. Being prepared is key. Discounts (Rule 810-6-1-.53): Cash discounts are not taxable. Some of the extra steps for out-of-state buying are going to cost you money. This will help you prove that the car belongs to you if you get pulled over. Find out when you should consider buying a car out of state and what steps you should take. Some states offer “trip permits” that let you drive an unregistered car for a few days – enough time to get it home and get it registered. The KY dealer sold it without tax and a temporary cardboard plate. You may get a great deal on the car, but you don't want to end up paying more for major repairs down the road. One-time purchase costs: $25. Also, do not forget to consider the sales tax rate. Finally, watch out for “title washing.” This is where con artists illegally remove “salvage” or “flood” designations from vehicle documents to make wrecks look like problem-free models, at least on paper. Why Buy Out of State? Action Alerts PLUS is a registered trademark of TheStreet, Inc. state that does not allow transfer of plates. If you're buying from a private seller, you may get pulled over on your way home for not having a license plate if you purchased in a state that does not allow transfer of plates. Carfax Used Car Listings Make it Easy to Find Your Next Car. You'll want to ask the dealer so that you're prepared to pay the amount when you go to register the car if the dealer can't collect it. If you buy from a private party, you should be prepared to be stopped by law enforcement on the way home for not having a license plate. If you see a car you that you know you want online, check in with the dealer or private seller via email, phone, or text before making a big drive. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. Buying a new car is a big decision. A missing title … Another growing problem is vehicle “cloning.” Here, thieves obtain a legitimate vehicle identification number (VIN) from a car matching the year, make, model, and color of a stolen vehicle and swap or duplicate the identifying digits. Sometimes buying a car out of state can save a lot of money. Before you make any big out-of-state treks to potentially buy a car, make sure that you're not making the trip for nothing. New Hampshire: $8,098. Have the seller show proof that the vehicle has passed its last emissions test to avoid any surprises later on. Research the car thoroughly. Buying a car out of state - and I can't figure out the tax, title, and license fees for AL (Huntsville: sales) User Name: Remember Me: Password ... a cash purchase (mine was a new vehicle if that makes a difference I don't know). If you're from California, emissions can be tricky. At this stage, the kind of arrangement you have with the seller when buying a car in another state changes what how you arrange transfer of ownership. Ask the dealer for the name and address of the previous owner. Getting your title and registration in order is an easy process if you're buying your car from an out-of-state dealership. in Communication from Southern Illinois University and live just outside of Chicago. Here are the facts on that and other out-of-state buying issues to keep in mind. © 2021 TheStreet, Inc. All rights reserved. Yes, you can. You might have to pay the difference if the seller’s state sales tax is lower than your state’s. While buying a car out of state can be beneficial, it also introduces a number of other factors to be aware of. Every Car Comes With a Free Carfax Report. You’ll probably have to show proof of insurance, as well. If I buy a car in PA, will I have to drive it to Alabama to register it and get plates? MojoMotors.com, a used-car classified ad site, said its recent research showed Alabama was the most expensive state for those items, at an estimated average … Some states require dealerships to obtain proof of insurance before completing the sale. Use Carfax’s Dealer Directory to Find Top-Rated Dealers in Your Area. It’s best to ask the DMV representative. Before you buy, test drive the car. You want to be absolutely sure that this is the car you want. By going to see the car in person, you can check for visual defects. Otherwise, you might find that the car has more defects than the seller let on. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. If you are hoping to save some tax dollars by buying your car out of state, think again. I have an Alabama license but work in Pennsylvania.. If you can, get proof that the car passed its last emission test so you know what you're getting yourself into. … Maybe you’ve found a dealership that advertises great rates for first-time customers. Once you've decided that it's worth buying a car out of state, it's important to be prepared for some of the common pitfalls and obstacles you may face. Buying a car out of state is not for the faint of heart or the undecided. Discounts for volume sales are not taxable. It’s also a good idea to contact your insurance company immediately upon purchasing any car to be sure you’re covered for the ride home. According to Autotrader, there are three ways to get an out of state vehicle insured after the purchase. Some states may require that you have a safety inspection done to ensure that the car is road-worthy. Can I Buy a Car Out Of State? A new car is often the second largest purchase (after a house) that a person will make in a lifetime. Remember the trip home: If you end up purchasing the vehicle, you also want to consider the drive home. There’s nothing to stop a buyer from crossing state borders to buy either a new or a used car. For vehicles that are being rented or leased, see see taxation of leases and rentals. If you're unsure, it may be better to stick to local options. My weekly “Wheel Deals” newspaper articles are syndicated by CTW Features. Even better, take the time to have a used vehicle inspected by a local mechanic who can evaluate its mechanical condition – particularly the parts you can’t see – and alert you to any possible problems. If you want to buy a car out of state, plan to see the car in person before you make your decision. Before you make your purchase, make sure that the brake lights, seat belts, steering system, and other essential components of the car work. Then, go visit the seller to make sure the car is as advertised, and be sure to take a test drive. First, get the Carfax Vehicle History Report to dig into its past. Take the vehicle to a mechanic who can verify that it doesn't have any major problems. Conversely, four-wheel-drive trucks and SUVs tend to be more valuable in northern states than in the South. The short answer is that buying a car out of state could be the best way to get what you want and a good deal. Your registration process will be delayed if your state requires emissions tests. For starters, even though the car may be a fair distance away, never buy a car or truck sight unseen. Tips for buying a car out of state. However, there are a few things to consider. Determine if the car is, in fact, what the seller says it is. They will usually help you with all of the necessary paperwork. This way, you don't have to pay a sales tax on your vehicle in the new state when you re-register it. Vehicle History Report before purchasing a vehicle a lot of money mind your state 's safety when... 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