10 Cheapest States To Buy A Car

Looking to buy a new car without breaking the bank? You’re in luck! It turns out, the location can make a significant difference in the cost of your shiny new ride. From sales tax to insurance rates, the state you’re in can either save you a pretty penny or dig a deeper hole in your pocket.

In this post, we will share the top 10 cheapest states in the U.S. to buy a car, offering insights into where you can save the most money on your purchase. We’ll see each state’s unique advantages, from lower sales taxes to fewer dealership fees, helping you make an informed decision on where to buy your next vehicle economically.

Top 10 Cheapest States To Buy A Car

If you’re in the market for a new vehicle and looking to get the most bang for your buck, choosing the right state to make your purchase can save you a considerable amount of money. Various factors like taxes, dealership fees, and registration costs can significantly influence the final price. Here are the top 10 cheapest states to buy a car in the U.S. based on overall affordability:

1. Oregon

Oregon offers a major financial advantage for car buyers—there is no sales tax. This can significantly reduce the upfront cost of purchasing a vehicle compared to other states. Additionally, the overall cost of owning a car, including insurance rates and registration fees, tends to be lower here. This makes Oregon an attractive state for both buying and owning a vehicle affordably.

2. Alaska

Alaska does not levy a state sales tax, which can lower the total cost of buying a new car. Furthermore, registration fees are notably low compared to other states, and because of the smaller population, there might be less competition and potentially lower prices at dealerships. The state’s unique economic factors make it a cost-effective place for car purchases.

3. New Hampshire

Like a few other states on this list, New Hampshire does not charge any sales tax, which immediately makes car purchases cheaper. In addition, the state does not impose excise taxes on vehicles, which can often add a substantial amount to the cost of a car in other regions. The absence of these taxes provides significant savings for car buyers.

4. Montana

Montana is another state that benefits from having no sales tax, which includes vehicle purchases. Car buyers in Montana also enjoy low insurance premiums and modest registration fees, further lowering the cost of ownership. Additionally, Montana’s lack of a general sales tax extends to other areas, making overall living expenses more manageable.

5. Delaware

Delaware offers zero sales tax, which can substantially reduce the overall expense of purchasing a new car. The state also boasts low vehicle registration fees, adding to the savings. Moreover, Delaware’s geographic location provides easy access to multiple major markets, potentially allowing for better deals due to competitive pricing among dealers.

6. North Carolina

North Carolina features relatively low vehicle registration fees and a moderate sales tax rate, making it cheaper to buy a car compared to states with higher taxes. The state also tends to have competitive auto insurance rates, which helps reduce the long-term costs associated with car ownership.

7. Missouri

Missouri stands out with its low sales tax rate on vehicles and reasonable registration fees. The state also has a system of allowing credits for trade-ins, which can further reduce the amount paid in sales tax when upgrading to a new or more expensive vehicle. These factors combine to make Missouri an economically sensible choice for purchasing a car.

8. Hawaii

Despite its remote location, which might suggest higher prices, Hawaii offers moderate sales taxes and low dealership fees. These factors help offset the potentially higher costs of shipping and inventory management on the islands, making car purchases more affordable than expected in this tropical paradise.

9. New Mexico

New Mexico’s appeal includes lower-than-average sales tax rates and moderate registration fees. The state’s overall lower cost of living can also contribute to more affordable pricing on vehicles, as dealerships may offer competitive pricing to adjust for the local market conditions.

10. California

Although California might initially seem like an expensive place to buy a car due to its higher average sales tax, frequent dealer incentives, and rebates can significantly lower the actual purchase price. Additionally, the high volume of sales in California often leads to competitive pricing among dealerships, which can benefit the consumer.

Frequently Asked Questions

What state has the cheapest cars to buy?

While it would largely depend on a driver’s specific needs, generally, New Hampshire is considered the most affordable state to purchase a car in the USA.

Is it cheaper to buy a car in the USA?

According to research, there’s generally a 20% price difference between vehicles in Canada and the USA, with prices in the latter being lower.

Which US state has no car tax?

States like Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge sales tax on the purchase of new or used cars. However, other states may allow taxpayers to avoid sales tax under specific conditions.

What is the cheapest country to buy a car?

Japan is currently the most affordable country to buy a car, with the average cost of the popular Honda N-Box model being only 26% of the average annual income, or around $10,462.