Buying a vehicle in 2025 isn’t just about choosing the right make and model—it’s about finding the cheapest state to buy a car. Savvy buyers know that taxes, registration fees, and dealer costs vary by state, and those differences can translate into thousands in savings. In this guide, we reveal exactly what is the cheapest state to buy a car, how to compare total costs, and the top 10 cheapest states to buy a car in 2025—complete with expert tips to help you navigate the system.
Some states may boast low vehicle prices but pile on taxes and fees. Others offer benefits like no sales tax, minimal registration fees, or lower insurance premiums. Knowing the cheapest state to buy a car can help you legally buy and register your vehicle while staying well within budget.
What Factors Make a State the Cheapest to Buy a Car?
- Sales Tax
Sales tax is often the most significant added cost. States like Oregon, Montana, New Hampshire, Delaware, and Alaska have zero state sales tax, making them top contenders.
- Registration Fees
Some states charge flat rates, while others base fees on a percentage of the car’s value. States like Florida and Arizona offer some of the lowest registration fees in the country.
- Dealer Documentation Fees
Dealer fees can range from under $100 to well over $1,000. Avoid states with high doc fees like Georgia or Tennessee if you’re chasing the lowest cost.
- Vehicle Insurance Premiums
Even if the upfront car cost is low, high insurance rates can burn your savings over time. States like Maine and Vermont offer low average premiums.
Top 10 Cheapest States to Buy a Car in 2025
Let’s dive into the top 10 cheapest states to buy a car in 2025, factoring in all key components: taxes, fees, insurance, and car prices.
- New Hampshire
- Sales Tax: 0%
- Avg. Registration Fee: $18.50 (plus town fees)
- Insurance Premium (avg/year): $940
New Hampshire remains one of the cheapest states to buy a car in 2025. With no sales tax and low insurance premiums, it’s a budget buyer’s dream.
- Oregon
- Sales Tax: 0%
- Avg. Registration Fee: $122 (2-year)
- Insurance Premium (avg/year): $1,150
Oregon is often cited as what is the cheapest state to buy a car, and for good reason. The combination of zero sales tax and flat-rate fees keeps costs manageable.
- Florida
- Sales Tax: 6%
- Avg. Registration Fee: $225 (initial), $28-46 annual
- Insurance Premium (avg/year): $1,450
Despite its moderate sales tax, Florida offers competitive pricing, affordable used cars, and a vast inventory due to its large population and tourism-driven economy.
- North Carolina
- Sales Tax: 3%
- Avg. Registration Fee: $38.75
- Insurance Premium (avg/year): $1,300
North Carolina’s tax is modest, and fees are among the lowest nationally, making it a smart pick on the top 10 cheapest states to buy a car list.
- Montana
- Sales Tax: 0%
- Avg. Registration Fee: $217 (annual)
- Insurance Premium (avg/year): $1,330
Montana stands out because of its no-tax structure. Many people even form LLCs here just to register high-end vehicles legally while skipping taxes.
- Delaware
- Sales Tax: 0%
- Avg. Registration Fee: $40/year
- Insurance Premium (avg/year): $1,400
Buying a car in Delaware keeps initial costs minimal. For residents, it’s clearly among the cheapest states to buy a car.
- Wisconsin
- Sales Tax: 5%
- Avg. Registration Fee: $85
- Insurance Premium (avg/year): $1,210
With reasonable taxes and low insurance costs, Wisconsin is a favorite among Midwest buyers trying to cut costs.
- Ohio
- Sales Tax: 5.75%
- Avg. Registration Fee: $34.50
- Insurance Premium (avg/year): $1,080
Ohio offers both an affordable vehicle market and very low documentation and registration fees—ideal for bargain hunters.
- Maine
- Sales Tax: 5.5%
- Avg. Registration Fee: $35/year
- Insurance Premium (avg/year): $940
With some of the nation’s lowest insurance premiums, Maine is one of the top 10 cheapest states to buy a car in terms of ongoing costs.
- Vermont
- Sales Tax: 6%
- Avg. Registration Fee: $76/year
- Insurance Premium (avg/year): $1,020
Even though it has a modest tax rate, Vermont’s low insurance and doc fees keep it affordable.
What Is the Cheapest State to Buy a Car in 2025?
If you’re wondering what is the cheapest state to buy a car this year, New Hampshire holds the crown in 2025. With no sales tax, minimal documentation fees, and cheap insurance, it consistently delivers the lowest all-in cost. Oregon and Montana are close competitors, especially for high-value vehicle buyers.
Cheapest States to Buy New vs. Used Cars
New Cars
For new cars, states with no sales tax like Oregon and New Hampshire are best. These states also often have large dealership inventories, meaning better selection and more competitive pricing.
Used Cars
Used cars can be more cost-effective in high-turnover states like Florida and North Carolina, where the supply of used vehicles keeps prices down. Also, look for states where depreciation hits quickly, like Michigan, making used vehicles even more affordable.
Hacks for Buying a Car in Another State
Even if you don’t live in the cheapest state to buy a car, you can still shop there:
- Travel or ship: Fly to the state, buy the car, and drive it home—or arrange for delivery.
- Out-of-state registration: You must register your car in your home state, but buying out-of-state is legal and often financially smart.
- LLCs in Montana: Some buyers use LLCs to register expensive vehicles in Montana legally and avoid taxes. Always consult a tax professional.
Registration & Title Transfers: Know the Laws
Every state has different rules, and failing to understand them can cost you. Make sure to:
- Bring the correct documentation for title transfers
- Get a bill of sale
- Understand emissions/inspection requirements in your state
Buying in the cheapest state to buy a car can be a win, but don’t skip legal formalities.
Financing Across State Lines
Most lenders don’t care where you buy the car—what matters is the car’s value and your credit. However, some local credit unions or banks may have restrictions or higher interest rates for out-of-state purchases.
Always confirm:
- Whether taxes are rolled into your loan
- If your lender supports cross-state buying
- The timeline for title delivery
Tax Loopholes You Shouldn’t Miss
Leverage Trade-Ins Wisely
In some states, trade-in value offsets the sales tax on your new car. For instance, in North Carolina, trading in a $10,000 car reduces the taxable price of your new car.
Military Exemptions
If you’re active duty military stationed out of state, many states allow you to register in your home state or waive certain taxes. This can create unexpected savings.
How Insurance Differs by State
Insurance premiums drastically vary based on location. For example:
- Maine and New Hampshire: Under $1,000/year
- Michigan or Louisiana: Over $2,000/year
Even if a car is cheaper in Michigan, insurance could wipe out any savings. Always calculate the total cost of ownership when shopping in the cheapest state to buy a car.
What to Avoid When Buying in a Cheap State
- Flood-damaged cars: Especially in Florida or Louisiana—check the VIN history.
- High-mileage auction cars: Some cheap states flood markets with former rental or auction cars.
- Dealers that inflate doc fees: Some will advertise a low base price but stack hidden charges.
Do your due diligence and request itemized quotes before making a move.
Can You Register a Car in a Cheap State If You Don't Live There?
No—unless you’re willing to establish residency or create an entity like an LLC. You can buy a car in any state, but you must register it in your home state (unless you have legal presence in another). There are no loopholes around this unless you’re willing to go the LLC route in Montana or similar.
Conclusion: Where Smart Buyers Shop in 2025
For smart buyers, the cheapest state to buy a car in 2025 is still New Hampshire, thanks to zero tax, low fees, and cheap insurance. Close competitors include Oregon, Montana, and Delaware. But no matter where you live, understanding how to leverage other states’ cost advantages can lead to big savings.
Whether you’re buying a Toyota Camry or a Tesla Model Y, make your decision not just based on sticker price but by comparing total cost across registration, tax, dealer fees, and insurance. And if you need help, expert services are out there.
About Car Concierge Pro – Your Trusted Car Buying Partner
Car Concierge Pro is a premium negotiation and concierge service that helps you find and purchase your next car at the best possible price. Whether you’re eyeing deals in the cheapest state to buy a car, trying to avoid hidden dealer fees, or simply don’t want the hassle of negotiating at a dealership, we handle it all for you. We manage everything from locating inventory nationwide, comparing costs across states, coordinating financing, and even arranging vehicle delivery. With Car Concierge Pro, your car buying experience becomes smarter, faster, and dramatically more affordable. Let us help you find the perfect car—at the perfect price.
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