Which States Are the Cheapest Places to Buy a Car

Buying a car can be an exciting time. The reason does play a factor. Sometimes we need a car because our last one broke down, it was stolen or it was totaled in an accident. Our budget is the other factor that impacts what kind of car we can afford.

Driving a car at night -man driving his modern car at night in a

While everyone wants to purchase a new car, this may not always be an option. However, a solid used car can also work out well. With used cars, looking at the mileage is important. Usually, less miles on the odometer means the engine is in better condition. The state where you purchase the car can also affect the deal you get.

Oregon, Alaska and New Hampshire are great places to purchase cars. The state taxes and fees along with the sales price dictate the amount of money you pay.

Most states charge either state or local taxes for the purchase of a vehicle. They usually have special names, but the bottom line is that they are all taxes. For example, the state of Georgia has a tax called ad valorem. This is usually paid with your annual registration.

However, recently they changed it to when a new car is purchased instead. The sales tax percent charged can range from the low of no taxes in the state of Oregon and Alaska to as high as 14% in Alabama. So, we know that Alabama is not the best place to purchase a car.

Other considerations that affect the final cost of your car purchase are the state registration fees and dealer documentation fees. These fees cover the usual tags, decals and registration paperwork for the state. All dealers pass on the dreaded documentation fee for every vehicle they sell.

There may be options you can work-out with the dealer to absorb the fee in the asking price or MSRP (Manufacturer Suggested Retail Price). Most car dealers use this strategy to sell cars all the time. I’m going to talk about the states that are the best places to purchase vehicles, both used and new.


As mentioned earlier, the best place to purchase a car is the state of Oregon. The fees average about $200 and with no sales tax, you can’t go wrong. If you live in the region near the state, this is the place to shop. Even if you don’t, with a great deal, getting the car to a destination that is fairly close makes it worth a look there.


The second state to consider purchasing a new car is in the state of Alaska. The sales tax is 0% of the selling price. The fees are in the mid $300 dollar range. This may prove to be an unrealistic choice considering you would have to live there. Transporting a car purchased in the state is an option. However, the money saved would be used to get the car to its final destination.

New Hampshire

New Hampshire is the next best place to buy a car. This state also has no sales tax. The fees are roughly the same as Alaska and start around $350. This fee is comprised of mostly dealer documentation fees. Again, depending on where you live, this option may end up being costly.


The next best place is Montana. However, the fees are slightly double of Alaska and New Hampshire at a little over $700. The sales tax is 0%, but the registration takes up most of the fees charged. Dealer documentation makes up the rest. With Montana being in another far away location, a great deal with the purchase price could change. If you leave near the state, it could be an option.


Believe it or not, Hawaii is the fifth best place to purchase a new or used car. The sales tax is only 5% of the selling price. The fees average just above $800 dollars, which pay for car registration. There is no dealer documentation fee. But, this is another state where getting the car to its home could be pricey.

Doing some research can save you tons of money and find the right car for you. These should be the two important motives as you are car shopping. Don’t be afraid to haggle. Remember, you are your best advocate

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