What are the Pros And Cons Of Buying A Car Out Of State?

When you look beyond your local market, you have access to more vehicles and potential savings. But a remote purchase also brings logistical hurdles.
Lucky for you, PrivateAuto's digital platform can simplify out-of-state car buying. You get expanded options without the headache.

We’ve put together the pros and cons of remote car transactions to help determine if an out-of-state purchase is right for you.

Benefits of Buying a Car Out-of-State

When you expand your search radius, you get a lot more options:

1. Expanded selection
2. Better prices
Image highlighting DealNow by PrivateAuto

An Out-Of-State Purchase Gives You A Wider Selection

When you expand your search radius, you will have more cars to choose from. A nationwide search also uncovers rare, vintage, and specialty vehicles not available in your area. You have the opportunity to find something unique that expresses your personality.

An Out-Of-State Purchase May Save You Money

Used car prices vary widely between regions. Cost of living, local demand, and other factors cause these pricing differences. You can arbitrage regional pricing to get a better deal.

Drawbacks of Buying a Car Out-of-State

Here are the barriers to remote car transactions (and how we solve them)

1. How can you verify the car's condition?
2. How can you get the car from the seller to your location?
3. How to de-risk a long-distance transaction?

Vehicle Inspection to Verify Condition

One limitation of remote transactions: you aren’t there to physically inspect the car. It’s easy to get around this one: hire a trusted inspector in the seller’s area. The inspector can verify the car’s condition. Bonus: they can also act as your agent to receive the title and send it off to you.

Vehicle Transport to Get the Car to You

When you buy a car that’s far from you, you have two choices:

1. Go drive the car back.
2. Have the car shipped to you.

Option 1 takes a lot of time and money.

Often, you’ll need to get temporary registration in the state of sale, and then re-register it in your state. While you won’t have to pay sales taxes twice, you may end up paying more in sales tax as a result of double-registration (once in the state of sale, then again in your state of residence).

Option 2 is best. It can be a hassle to coordinate logistics between the seller, transporter, and yourself. PrivateAuto makes it easy: we handle scheduling and logistics through our integrated partners. The transporters work within your timeframe to deliver your vehicle when and where you need it. You track the vehicle’s progress in your PrivateAuto dashboard.

Escrow-like Safeguards to De-Risk the Transaction

Escrow is a common solution to take the risk out of a long-distance vehicle transaction. But escrow is inconvenient, slow, and expensive.

PrivateAuto offers escrow-like safeguards with instant, fee-free payments up to $1M via our integrated banking solution, PrivateAuto Pay.

You wait until the seller has electronically signed the bill of sale and you get confirmation that they have done so. At this point, they are legally bound to deliver the vehicle and you are safe to send payment.

Because the seller receives funds instantly, they can release the vehicle (and the signed title) to your inspector/agent on the spot.

Remote Vehicle Transactions Made Easy

Our transactional marketplace gives you the workflow and tools to handle all aspects of buying a car remotely:

1. Shop used vehicles for sale, make offers, and settle on the vehicle you want to buy.
2. Transfer funds from your regular bank account (checking or savings) to your PrivateAuto Pay account. If you need to apply for financing, you can do so right in the PrivateAuto app for competitive rates from our FDIC-approved lending partner. The lender will fund your PrivateAuto Pay account for you.
3. Get a car history report (included in the seller’s PrivateAuto listing if they’ve opted for Premium).
4. Arrange for a local inspector to act as your agent and schedule a meeting between the inspector and seller.
5. Schedule car transport right in the PrivateAuto app.
6. The inspector will perform a pre-purchase inspection and test drive the car on your behalf.
7. After the vehicle inspection turns up with no issues, you and the seller sign the bill of sale in the PrivateAuto app. You’ll get immediate confirmation that the seller has signed and that you are now safe to pay for the car.
8. Transfer funds to the seller instantaneously via PrivateAuto Pay (works any time of day, any day of the week). The seller will get immediate confirmation of funds received into their PrivateAuto Pay account.
9. The seller signs the vehicle title over to you and hands it over to the inspector, who will send it to you by certified mail for you to sign.
10. The inspector ensures the car is loaded onto transport and shipped off to you.
11. You call your insurance company and get an auto insurance policy for the vehicle.
12. You receive your car and finish the title transfer at your state’s DMV or equivalent organization. At the same time, you’ll register it in your name, get new license plates, and pay sales tax (if applicable).
13. Enjoy your new-to-you car!

If you’ve found your car on another platform, such as Facebook Marketplace, Autotrader, or Craigslist, use our DealNow feature to enjoy all of the above benefits. DealNow allows you to fast-track a transaction, bypassing the listing and negotiation phases. Simply create a deal room on DealNow, invite the seller, and get the deal done.

What Should I Ask a Seller When Buying a Car Long Distance?

When buying a car remotely, you shouldn’t worry too much about asking the “right questions,” as a vehicle history report and a good inspection will bring the most hidden issues to light.

Here are a few questions you can ask the seller if you want to:

Why are you selling this car?
How long have you owned it?
Tell me about its maintenance history.
Who was the main driver of the vehicle, and what were their driving habits?
What sorts of driving conditions was the car mostly driven in?
When not being driven, where was the car parked?
Is the car under warranty? (Most used cars are not under warranty, but if this one is, that’s great news.)
Have any major modifications or repairs been made to it?
Do you have copies of your service records?
Does the car have a clean title? (If it has a branded or salvage title, you definitely want to know this before arranging an inspection.)

All of these questions—and any other communication—happen within our in-app messaging feature, so you'll never need to give out your contact info to a stranger.

Should I Hire an Agent for an Out of State Purchase?

Buying a car sight unseen used to mean hiring an agent to act as your representative. But with the PrivateAuto process, the local mechanic inspecting your vehicle essentially serves as your agent.

After you've located the right car and negotiated a price, you arrange for a trusted inspector in the area to thoroughly evaluate the vehicle on your behalf. Not only will they check under the hood and test drive the car, but they will also handle any paperwork and make sure the car gets shipped off to you.

With real-time progress updates, you'll have confidence knowing your inspector-agent is verifying the car's condition before you release funds.

Don't waste time and money on a specialized agent to buy a car remotely. With a professional vehicle inspector acting on your behalf, you can get the car deal done from the other side of the country—in your pajamas.

Do I Need an Escrow Service?

While escrow services aim to provide protection for buyers and sellers in vehicle transactions, they come with downsides like fees, delays, and potential scams. Our integrated payment system offers an alternative to traditional escrow.

With PrivateAuto Pay, you can send and receive funds instantly when deal terms are met. Payments up to $1 million are transferred in real-time, 24/7, with no fees. This enables secure transactions without waiting for escrow to clear.

Finalize the Sale After You Get Your Out-of-State Car

Once you receive your new-to-you car, you'll handle the following with your local Department of Motor Vehicles (or equivalent agency in your state).

1. Transfer the title
2. Get license plates and registration
Image highlighting Buying Car Privately by PrivateAuto

Transfer the Title

Once you receive the car title (signed over to you by the seller), you'll need to finalize the title transfer with your state's motor registry department. Here are the documents that most states require:

A completed title transfer application form
Proof of insurance
Proof of identity
Bill of sale
The original title (or a duplicate title, if the original one is lost)
An odometer disclosure statement–required by some states
A highway safety inspection–required by some states

Registration and License Plates

In most states, registering a vehicle and transferring the title must be done at the same time, as registration legally establishes ownership. During this process, you can apply for permanent license plates. A temporary tag can also be acquired while waiting for the full registration to be finalized.

The specific requirements for registering a vehicle vary from state to state, but here are some general items that you will need to provide:

The title to the vehicle
A bill of sale
Proof of insurance
Proof of identity and residency
Payment for any applicable fees

Pay Sales Tax

Unless you live in a tax-free state, you'll need to pay sales tax on the vehicle's purchase price. This is usually handled when you register your vehicle.

Get Your Car Insured

Used cars, just like new cars, are required to have liability car insurance at a minimum. Every insurance company will have different rates, so shop around.

Buying A Car Out Of State FAQ

What are the best transport services?

PrivateAuto has teamed up with RunBuggy to integrate car shipping services into our used vehicle marketplace. This partnership enables you to seamlessly arrange professional vehicle transport within your PrivateAuto transaction.

Once you've found your dream car and agreed to buy it, simply request a shipping quote through our app. We'll connect you to RunBuggy's vast carrier network to ship vehicles anywhere in the continental US. Their team handles logistics while you track progress in the PrivateAuto app.

RunBuggy offers open or enclosed shipping tailored to any car and budget. Rely on their licensed, insured drivers and door-to-door services to simplify your PrivateAuto experience. No need to coordinate transport separately—we wrap it into the transaction process.

Streamline your entire used vehicle purchase journey with PrivateAuto's integrated shipping. We bring services together in one place so you can buy, sell, and transport vehicles with total ease.

Which state states are tax-free states ?

What to do after you buy a car from a private seller?

How to avoid fraud when buying a car?