by Andrew Rohrlich
When buying a used car out of state from a private party, you need to ensure a few things. First, you and the seller should fulfill the state Department of Motor Vehicles (DMV) requirements. Completing the paperwork and getting the vehicle history report is also imperative.
In some cases, you might have to get proof of insurance if the seller's insurer is willing to transfer the auto insurance plan to you. Delivery of the vehicle from a different state also requires special arrangements.
With all these considerations in mind, you'll find a complete guide on buying a car out of state from a private seller and 10 key pre-purchase considerations below.
Should You Buy a Vehicle Out of State?
There's no harm in buying a vehicle out of state. Nowadays, online listing sites are the primary avenue for people to find prospective buyers and sellers for cars. Not all these parties may be in your state or region.
If you like a vehicle and the seller lives out of your state, you'll have to make an out-of-state purchase. This may require you to make some additional steps and considerations, as highlighted below, but there's no reason to skip the opportunity of getting a dream car.
Moreover, you could be getting a better deal buying out of state. The prices of vehicles can vary drastically in different parts of the country. The cost could be higher in your state because of taxes, competition, and demand than in other areas of the country. That's why it's best to explore all options.
The convenient thing is that many online auto-listing sites offer home collections. When you purchase a vehicle, they collect the car from the seller's home and deliver it to yours. That makes the purchase process even more accessible.
Buying a Car Out of State From a Private Seller vs. Dealer
Besides buying a used car out of state from a private party, another option is to get it from a dealer. Both options have their perks. When you buy from a dealer, you get the following:
- Assurance: Several car brands have permitted many certified dealerships to sell their vehicles, which means you can rest assured the car is of good quality and has gone through rigorous checks and tests to ensure reliability.
- Multiple Options: With dealerships, you can choose a vehicle from a wide range of models available. You can compare different cars to find the one that meets your requirements and ask professional salespeople to help you in the selection process.
- Financing: A dealership also offers car financing options, which can make it easier for you to buy a car. Financing removes the burden of paying the total amount in one go.
- Warranty: Most dealerships offer warranties on their cars. If anything goes wrong, you will be covered.
As you can see, you don't need to do as much work when you buy from a dealership. But do note that you get all these perks at an additional price since dealership cars are more expensive than their privately sold counterparts. If you value convenience and budget is not a concern, go for a dealership.
On the other hand, buying a car from an out-of-state private seller gives you more flexibility to get a great deal at an affordable price. You can negotiate with the seller to get the best possible price. It's also possible to get a loan for a private party sale.
You may also be able to trade in your current car to sweeten the deal. With private-party sellers, you also won't have to pay for any additional services that dealerships typically charge. But the downside is the extra work you have to do. A private purchase is right for you if you don't mind the extensive research followed by self-done quality checks.
10 Things To Consider When Buying a Car Out of State From a Private Seller
When buying a used car from out of state, you should be a bit more careful than when doing the same in your state. The seller's state might have additional requirements and paperwork you may need to know about before the purchase. Likewise, different taxes, title transfer methods, and registration requirements may apply.
You also might have to schedule a safety inspection. If there's an insurer involved, you must get proof of insurance from the seller. In short, there's quite a bit to do.
Here are the 10 key factors to consider when buying vehicles from out of state.
State DMV Requirements
DMV in the state where you plan to purchase the car will have its requirements for registration. You should look up the requirements and documents to ensure no surprises happen after the purchase.
Here is some paperwork you'll have to do for every DMV in the country:
- Title Certificate: The title is the proof of ownership of the vehicle. The seller and buyer must sign, date, and potentially notarize it.
- Bill of Sale: The bill of sale establishes the terms and conditions of the transfer. It also includes information about the vehicle, such as year, make, model, VIN, and sale price.
- Odometer Disclosure: The odometer disclosure verifies the vehicle's mileage. It must include the current reading and get signed by both parties.
The release of liability is another essential form to complete when transferring ownership. The seller must sign this document to release any liability for the vehicle. That means the seller is no longer responsible if anything happens to the car after they sell it. If the vehicle is insured, you'll also need proof of insurance from the seller.
As a buyer, you must do one of the following:
- Pay the sales tax in the county of the vehicle's registration
- Prove you have paid the sales tax already
- Prove the car is exempt from sales tax
Even if the vehicle is exempt, you must get the sales tax receipt from the state's DMV.
Some states do not charge sales tax on cars. These include New Hampshire, Oregon, Montana, Delaware, and Alaska.
Title and Registration
Whenever there's a change to the registered lien holder or owner of a vehicle, there has to be a title and registration process. The details of the new owner or lien holder must get clearly documented for them to become official.
You and the seller will have to fill out the application form for the transfer of title after getting it from the DMV. Both of you must sign the document.
There will also be a transfer fee for document processing. Some states have a flat rate for all vehicles. Meanwhile, others have a title fee based on the vehicle's weight, value, and age.
As for registration, you can get a temporary registration card from the seller's state. Then, you can drive back to your state and register your vehicle there.
Emissions and Smog Check
A smog check or emission check tests the emissions levels of a vehicle. Your state will have a list of cars that must pass their smog tests and specific requirements for the process.
Every state's DMV has a list of certified shops which must have the proper equipment to perform the tests.
When you take your vehicle in for a smog check, the technician will connect the car to a testing device that hooks up to the vehicle's engine and computer system. The device will measure the level of emissions and compare it to the figures provided by the manufacturer.
Vehicle History Report
The vehicle history report is a reliable source of information about a vehicle's past. It contains details such as the previous owners, repairs or maintenance records, and accident history. It also includes the following:
- Odometer reading
- Open recalls
- Damage to the vehicle
You can get vehicle history reports from dealers like Carfax and AutoCheck. Getting a vehicle history report costs about $25 to $40.
After filling out the online form on the dealer's website, you must enter the Vehicle Identification Number to get the report. You can find the VIN on the registration card, insurance documents, and the vehicle's windshield.
A safety inspection is imperative in private party sales. It ensures the car is safe to drive and doesn't pose a risk to the buyer. A safety inspection should include the following:
- Assessment of the vehicle's condition
- Examination of all systems and components
- Checking the brakes and tires
- Review of the interior and exterior
- Test drive
The safety inspector should also provide an overall assessment of the vehicle's safety and make recommendations for any necessary repairs. It should give you peace of mind, knowing that the car you're purchasing will not cause you harm or be a burden on your wallet.
Proof of Insurance
When buying a used car out of state, you should ask the seller if they have proof of insurance for the vehicle. The seller should provide valid car insurance documents that show coverage in the state where the vehicle is registered. Their insurer should also be willing to transfer the policy to you if you buy a car with the title.
There's a notable amount of paperwork in a car sale. You and the seller must fill out and sign the following documents:
- Bill of sale
- Title transfer forms
- Lien release forms (if applicable)
- Vehicle registration documents
- DMV forms (depending on your state's regulations)
Since you're buying a used car out of state from a private party, double-check the paperwork's compliance with your state's laws and regulations. In case of an insurer or bank lien on the car, you must also have a lien release form from the insurance company or bank.
After you negotiate the purchase price and fill out the paperwork, you must pay for the car. Most private sellers prefer to get paid in cash, although certified funds like a bank check or money order are acceptable alternatives. You can also arrange for an electronic transfer of the funds.
It's essential to be safe when paying for the vehicle. Many sites, such as Craigslist, lack the proper purchase protection. Therefore, you should take measures to ensure safety and try sticking with cash.
Delivery of the Vehicle
There's a certain cost associated with the delivery of the vehicle from the seller's state to your home state. The best approach is to go to the seller's location and drive back home in the car. If you've bought the car through an online listing platform, check if they offer delivery services.
Depending on the distance and your budget, you can choose a reliable transport service to deliver the car safely. When choosing a transport company, make sure they have insurance coverage for the vehicle, a tracking system for the delivery, and other essential features.
Buy a Car Out of State Without Any Hassle
Buying a used car out of state from a private party requires a little extra work. You must be vigilant about getting all the necessary paperwork, arranging the delivery, and getting a thorough inspection. Since you'll be driving the car in your state, that's where you pay the sales tax. You also have to register the vehicle there. Make sure you comply with the DMV's requirements throughout the process.
This article was written by Andrew Rohrlich. As a brand and product marketing expert, Andrew Rohrlich has crafted products, experiences and communications for household names like Gap and for multiple automotive technology businesses. For nearly a decade Andrew has studied automotive retail in depth from a customer point of view and aggregated the industry’s best research, thought leadership and know how to provide credible and important information to auto shoppers and sellers.