Cheapest States in the USA to Buy a Car

Are you thinking of investing in a new set of wheels? Before you make a purchase, it's worth considering how and where to get the most bang for your buck. Prices can vary significantly between states, with factors like sales tax and dealership fees substantially impacting the total cost of buying both new and used vehicles. With the average cost of a new car soaring to over $47,000, evaluating the most wallet-friendly states for buying a vehicle has become an increasingly popular way to save your hard-earned cash. Ensure you make a cost-efficient purchase with our guide to the cheapest states in the USA to buy a car.

New Hampshire

New Hampshire has long been known as one of the most inexpensive states in the country to go car shopping. Not only are prices over 5% lower than the national average, but the Granite State is also free of statewide sales tax. The dealer fees in New Hampshire typically exceed $1,000. However, this is still generally much less than in many other states, especially when compared to most other parts of New England. These factors have made New Hampshire one of the most affordable places to buy a car in the country.

Oregon

Like New Hampshire, Oregon is one of just a handful of states that don't impose a sales tax on customers buying new or used cars. The West Coast state also has some of the lowest dealer fees around, meaning you can potentially save quite a bit of money by purchasing a car in Oregon. Car prices are actually above average, but the 0% sales tax and minimal dealer fees more than make up for these slightly elevated costs.

Montana

If you're thinking of buying a car in Montana, you'll likely encounter a situation similar to that of Oregon. Montana's car prices are higher than those in most states, both for new and second-hand vehicles. Conversely, it also boasts some of the lowest dealer costs in the USA, and the state doesn't charge sales tax. This is especially appealing to those hoping to buy a particularly expensive vehicle, as you'll only need to pay a small registration fee in addition to the car's cost.

Florida

Unlike some of the other states featured on this list, Florida isn't known for having remarkably low sales taxes or dealership fees. What the Sunshine State does offer, though, are some of the cheapest car prices in the nation. Because of Florida's older population, used cars frequently come on the market, and the ample supply of vehicles drives down the average prices. While the cost of second-hand cars is noticeably low, new cards also tend to be more affordable here than in most states.

Delaware

Delaware is another state with no sales tax on cars, making it one of the most cost-effective places in the USA to acquire a vehicle. Moreover, car prices here are slightly below average. This winning combination has kept the cost of purchasing a vehicle in Delaware at a reasonable rate despite the relatively high dealer fees. Such costs in Delaware aren't cheap, but they're still less than those of many neighboring states.

Indiana

Indiana has some of the most economical prices around for new and used cars. The state's second-hand vehicle prices regularly rank among the lowest in the country, and newer alternatives are also well below the national average. Dealership costs are on the pricier side, and the sales tax sits at 7%. Yet, the reduced car prices mean it's still possible to snag a great deal by shopping in Indiana.

Ohio

Ohio is another fantastic option for reasonably priced motors, with used cars going for a whopping 10% below average. Newer models are also more affordable than in many other states, which levels out the midrange dealership fees. As is the case with many states, Ohio imposes both statewide and county taxes on cars. This means that, depending on the area you make your purchase in, you can expect to shell out up to 8% of the car's value in tax.

Alaska

Vehicle costs in Alaska don't have a reputation for being inexpensive, with used cars often going for a staggering 20% more than the average price. However, Alaska counters this with some of the most budget-friendly dealer fees around and a 0% tax on car sales. Local taxes apply based on the county where the transaction is completed, though these are usually fairly and moderately priced.

Virginia

Although Virginia's car costs for brand-new vehicles can be pricey, pre-loved motors are among the most inexpensive in the country. These figures balance each other out, making Virginia one of the most moderately priced states to buy a car. Better still, sales taxes come in at a little over 4%, and dealer fees sit well below those of most states. Virginia doesn't enforce county-specific taxes, meaning you'll only be required to pay state taxes if you choose to buy from a Virginia-based dealer.

Kentucky

Kentucky is another popular option for drivers hoping to buy a second-hand motor. The Bluegrass State only lags behind a small number of states like Indiana and Ohio in terms of its competitive used-car offerings. At a rate of 6%, Kentucky's sales tax is around the national average, while dealership costs are also relatively reasonable and cheaper than in most of the surrounding states. Many states offer lower prices for new vehicles than Kentucky, but depending on the make and model you choose, you can still secure a decent deal.

Take Your Pick of the Nation’s Most Cost-Friendly States for Car Prices

There's no denying that cars are among the most expensive purchases many of us will ever make, but shopping around can reward you with some serious savings. Something as simple as exploring your options a state or two over can considerably lower your total costs, whether you're keen on securing a new or used vehicle. That being said, it's essential to factor in the likes of out-of-state registration fees and local taxes before committing to any purchase.