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Traveling out of state to buy a new car? Keep these tips in mind

Rental cars
Posted at 10:02 AM, Jan 05, 2022
and last updated 2022-01-05 12:02:18-05

The prices of used cars are still soaring, and they may not start to come down until well into 2023.

That's because new car prices are still historically high as the car industry waits for the supply to return to normal.

In the meantime, the price of used cars is inching closer to the cost of new vehicles. Dealers say what used to be a $5,000 car is now roughly $8,000.

It has also been challenging for shoppers to find the specific car they want at local dealerships. An option some people are looking into is traveling as far away as another state to find the car they want. That was already happening before problems with supply started.

Ronald Montoya, a senior consumer advice editor at Edmunds, says supply can vary depending on the region.

"If you're in a big city — and foreign brands tend to be popular in the big major cities — you may not find (them), as many of those in stock," Montoya said. "So, it's worth taking a look out of town for better options."

Prices may also change when buying in another state.

Montoya says some dealerships could charge as much as $7,000 over sticker price depending on the area. Dealers in nearby states could also charge less than a local dealer.

But one thing to keep in mind is state sales tax — not just how much is being charged, but also where it's being charged if you don't live in that state.

"You want to make sure that dealership can register the vehicle in your state. Otherwise, you're gonna have to do that and pay those fees," Montoya said. "Often times, people like the convenience of having all those fees rolled up into the loan initially, whereas you would have to be ready to pay those fees. It could be a couple of thousand (dollars) if you're including sales tax."

Montoya says car buyers should also consider smog and emissions tests, which vary by state. Sometimes certain cars are manufactured for certain states and may not pass a smog test elsewhere. That applies to used cars as well.