Cheapest State to Buy a Car in 2026

What Makes a State Cheap for Buying a Car?

One of the biggest advantages of the rise of online car shopping and websites like eBay Motors and Carvana is the abundance of choices people now have. It used to be difficult to buy a car outside of your own state, but nowadays it's very commonplace. That’s why an ever-increasing number of people are looking for the cheapest place to buy a car, and oftentimes that’s in states with no car sales tax and the lowest vehicle registration fees. This is what makes an out-of-state car purchase such an attractive alternative, as well as the overall abundance of different choices that you now have access to.

Vehicle Prices vs Total Ownership Costs

The difference between the initial vehicle price and the total ownership costs is that the initial vehicle price is limited only to the cost of the car, while the total ownership cost takes into account every expense over the life of the car, including gas, tires, maintenance, fees, tags, title transfers, and more. The cost of ownership can depend on the state, the car, its condition, the care that it receives, and many other factors. That is why the initial vehicle purchase price is so important, because it can be an indicator of the quality of the car, like mileage and the title tier - with the clean title being the best and most desired tier.

Sales Tax, Registration Fees, and Other Costs

The sales tax for a vehicle is the tax that a car’s owner is expected to pay on a state level, along with registration fees and any additional costs like mechanical certificates, odometer disclosures, transportation and more. The biggest chunk of change that a new car owner might be expected to pay is from the sales tax, which some states do not require, like:

Alaska, Delaware, Montana, New Hampshire, and Oregon

This means that regardless of the price of the car, you are not required to pay a sales tax, which can save you a lot of money. Considering that the average approximate sales tax in the U.S. ranges between 5.75% and 8.3%, the 0% tax is a huge financial break for new car buyers. To illustrate how significant this is, the average cost of a new car is $49.200, which in some states will come out to $2.600 only for sales tax

Cheapest States to Buy a Car in 2026

Which are the best states to buy a car from? Well, our findings will not surprise those who’ve paid attention to the car market for the past 10 years.

States with the Lowest Overall Buying Costs

The cheapest states to register a car are those that combine low car sales tax by state and low registration costs. Those are New Hampshire, Oregon, and Montana, with the best of the three being Montana, as it has no sales tax.

New Hampshire is most known for its 0% sales tax on vehicles and is ranked amongst the cheapest states to buy used cars from. It also ranks very high in overall car ownership costs, whereas states like California and Colorado rank among the highest-cost states to own a vehicle.

Oregon has a 0% statewide sales tax for vehicles, with super low expenses for auto ownership due to low overall insurance premiums and additional costs. Another standout state aside from Montana and Oregon is Delaware, which also imposes a 0% sales tax; however, it does have a 5.25% title documentation fee, which ranks it in 4th place.

States with No or Low Car Sales Tax

5 U.S. states have waived their statewide sales tax, and those are the aforementioned Alaska, Delaware, Montana, New Hampshire, and Oregon. There are also low sales tax states that also have some ot the lowest vehicle taxes by state, and those are:

Colorado; Georgia; New Mexico; North Carolina; Alabama.

North Carolina has become a vital hub for vehicle manufacturing, automotive parts supplies, and East Coast-based logistics. It benefits from its strategic location, its extensive highway and rail infrastructures, as well as large port connections.

Best States to Buy a Used Car

Where Used Car Prices Are Most Competitive

The best states to buy a used car from are the ones with the most competitive prices. The reason for these prices may vary, from high-volume states like Florida, which is the capital of used car dealerships, to Delaware, which is known for its overall low cost of buying a used car and the lowest cost of registration.

Other states, like New Jersey and Pennsylvania, also rank very high on the used car affordability scale, with some of the lowest prices in the U.S. altogether. Oregon also ranks very high again, due to the aforementioned factors like no sales tax and low registration fees, but also some abundance of used cars, mostly in the 4x4, all-wheel-drive, or crossover range.

Factors That Affect Used Car Prices by State

Many factors influence the price of goods, regardless of what they are. For cars, being a relatively stable good, with a regular supply, prices can be somewhat stable in some states. The factors that most widely affect the cost of a used car are regional supply and demand, shipping logistics, and overall climate conditions, which affect shipping. States like New Hampshire have the lowest cost of buying a used car, with the median being at $7.995, while a state like Alaska ranks at the highest cost for a used car, with a median price at $32.700 due to its remote nature.

Cheapest States to Register a Car

Registration Fees by State

Vehicle registration fees vary widely, firstly on the type of fee - flat or value-based, and the actual value of the fee. States like Arizona have an $8 base cost, whereas states like Delaware and Florida structure their registration costs based on the value of the car, with some costs exceeding $1.000.

The flat fee states that it either has an annual fee or a base fee for the registration of a regular passenger vehicle. They are as follows:

Alaska - $100 base fee.
Arizona - $8 plus an additional vehicle license tax based on the vehicle. California - $76 base fee + 6 CHP fee + value-based vehicle license fee North Carolina - $38.75 Texas - $50.75 base cost plus any additional county and local fees.

There are then value- and weight-based states like Delaware, Florida, and Mississippi, which can go up to $1.144 depending on the taxable value of the car as assessed by the state.

States with the Lowest Annual Vehicle Costs

If you want to know where to buy a car for the lowest price, then chances are you’ll be considering the annual ownership cost. This article by Insurance. com shows that New Hampshire, Oregon, and Vermont have by far the lowest annual vehicle costs. This is due to a combination of no state sales tax, low insurance costs, and flat registration fees. It is very common for drivers in these states to spend thousands less than car owners in other states. In fact, the lowest-cost state to own a car is New Hampshire, with the average median cost ranging around $3.100 per annum; for Oregon it’s $3.850, and for Vermont it's $3.940. 

Buying a Car Out of State: Is It Worth It?

Potential Savings

Buying a car out of state can save you thousands if your local market is booming and prices for both registration and used car values are at an all-time high. Buying from an out-of-state dealership or a private seller will not save you the sales tax, because it is paid in your home state, but it will save you the trouble of buying in a booming local market.

There are also potential savings in buying from a state known for having no rust on its cars, usually those are southern states or warm states with no salt use on roads, like Arizona, Nevada, Phoenix, and Florida. While all three states have some added cost to buying from, they are a gold mine for rare finds of classic or exotic cars that are in great underbody condition and have no rust. Aside from the upfront cost, you will be saving money on repairs and maintenance.

Taxes, Registration, and Transportation Costs

One negotiation tactic that will save you money for sure is negotiating on the OTD price, or the out-the-door price. This is important because the sales tax is paid on that evaluation of the car, and not the initial or sticker asking price of a vehicle. Another great tactic is to buy a car from a no-sales-tax state - generally, resale values of cars in those states tend to be lower. While you will be paying the sales tax in your state, you might reap the benefits of the lower price of other states.

Tips for Saving Money When Buying a Car

Final Thoughts on the Cheapest States to Buy a Car

The best states to register a vehicle are Montana, North Carolina, and Arizona due to a combination of no sales tax and low registration fees that are objective. The states with no sales tax and cheap insurance are Oregon, New Hampshire, and Montana. The states with no personal property tax are Florida, Virginia, and Colorado, and the states with no inspection regulations are Florida, South Dakota, and Arizona.