You have been shopping for the perfect car and you finally found it, but it’s out of state. You are questions about taxes and license plates, but don’t worry. We are here to help answer you questions about buying a car out of state and driving home. Some people might say you should buy your car close to home, but you are particular about your cars. Maybe you live near the border and that is in your area. Maybe you are looking for specific pre-owned car or you found a great deal on a new car in the right color and trim level and the dealer is in the next state. You don’t mind the extra driving to get the perfect car or to save a few hundred dollars.
Buying a Car Out of State and Licensing
People buy cars outside their local state on a regular basis and especially when they live close to the border. Therefore car dealers are well versed in the rules and regulations about buying a car out of state and driving home. In most states the dealer will sell you a temporary license plate that may last anywhere from 7 day to 30 days. This will allow you to drive home the car you purchase legally and allow you time to visit you local D.M.V. to get permanent plates and registration.
Buying a Car Out of State and Taxes
This is where things often get confusing when it comes to buying a car out of state and driving home. Typically when it comes to purchasing an automobile the buyer should pay the tax rate of the state where they reside. However when we add in the county tax which can range as much as 2% in the same state it makes it very confusing. Some states have cooperative agreements with other states, which make it a little easier, but that is not the case with all states
In other words if the state where you live and the state where you are buying the car have an agreement the dealer will collect the sales of your state. However if the states do not have an agreement about sales tax and automobile purchases the dealer will not collect the sales tax. Then when you take your newly purchased car to the D.M.V. to get your plates and registration you will be required to pay the sales tax. But wait there is more, which is even more confusing for the person that is buying a car out of state and driving home.
Buying a Car Out of State and Auto Financing
OK, so far we have covered the plates and the taxes when you are a cash customer, but things can change a bit when you are going to 
finance your car. When you buy a car in the state where you reside the taxes are added into your purchase. They can be financed if you like or you can put money down on your purchase to cover the taxes and more, but you are not required to unless it’s a condition of the lender. However when you are buying a car out of state and driving home and the car is financed the lender may collect the taxes for your state and write a check to your state for the taxes. They will give you the check to take to the D.M.V. when you get your license plates and registration to make sure the taxes are satisfied. The state can put a lien on a car if you don’t pay the sales taxes and government liens take precedence over lender liens. This way taxes are satisfied and the state is happy. Are you confused yet?
There aren’t any rules and regulations about buying a car out of state and driving home that are uniform in ever state. The good news is that the dealership where you plan on buying your car will know exactly what needs to be done. This is not an area of the car buying process where dealers play games because state regulations and taxes and rigorously enforced.
