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Are Cars Cheaper in Texas Than California?

Are Cars Cheaper in Texas Than California

Let’s say you need to buy a car. But you’re moving from one state to another.

Do you purchase the car from the state in which you live? Or wait to purchase the car in the state you’re moving to?

If you live in California and you’re comparing gas prices with that of Texas.

I can see why you might assume that the cost of car ownership in the Lone Star state would be equally inexpensive.

But it’s not until you factor in state taxes and the cost of insurance that the picture becomes clearer.

Come with us as we find out if cars are cheaper in Texas than California.

Do Cars Cost More in California?

According to iSeeCars, the price of an average used car in California is $34,617.

The price of cars varies by state. And likely to the surprise of no one, used cars in the Golden State are more expensive than the national average.

According to iSeeCars, the price of an average used car in California is $34,617. The reason why boils down to basic economics – demand.

As expensive as it is to get a used car in California you might be surprised to learn that it’s only the tenth most expensive state for used cars.

Nationally it’s becoming more expensive to buy a car due to supply chain shortages.

Cheapest Places to Buy Cars in Texas

The Jaguar XF is cheapest to buy in Texas at $1,946 below the national average.

According to Autolist, the top five most affordable cities to buy a used car are all located in the Dallas Texas area.

After calculating the prices of over 67 million used cars and trucks nationwide, the San Francisco California based Autolist.com concluded that the average price of a used car in Texas is $21,968.

That makes Texas the twelfth most affordable state to buy a used car with prices $773 below the national average.

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The 5 cheapest states to buy a used car in Texas are:

  1. Richardson at $624 below average
  2. Garland at $554 below average
  3. Dallas at $536 below average
  4. Carrollton at $527 below average
  5. And Plano at $513 below average.

As an interesting aside, the most affordable cars to buy in Texas according to the study are:

  1. Jaguar XF at $1,946 below average
  2. BMW X1 at $1,902 below average
  3. Audi R8 at $1,867 below average
  4. Ford Transit Wagon at $1,779 below average
  5. And Jaguar XJ at $1,727 below average.

Can You Buy a Car in Texas If You Live in California?

You can register a car in any state through the Department of Motor Vehicles.

You can buy a car from any state and have it registered in any state you please. The process isn’t even as challenging as you might think.

All that’s required is a visit to the DMV:

  • Make sure to have a bill of sale that clearly shows the amount you paid for the car. You can use DMV Near Me to find a DMW near you.
  • Additionally, you’ll need a photo ID, proof of residency and proof of insurance. Inform the DMV clerk that you purchased the car out of state and intend to title and register it in a different state.
  • The clerk will more than likely return your bill of sale but keep the Texas title for their records. You’ll also be asked to pay any differences between the Texas auto sales tax and the state in which you want to register the car.
  • The title of the state in which you want to register your vehicle will arrive in the mail.

Most Expensive State to Buy a Car

According to Mojomotors.com, Alabama is the most expensive state to buy a car.

Now let’s turn our attention to the least and most expensive states to purchase a car in the nation.

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We’ll start with the bad new and begin with the most expensive states.

When making a purchase like this, there are always fees that come with the transaction.

To be savvy, you’ll want to budget for those extra fees or bake them into the negotiation of the car. Some states have higher fees while other states have lower fees.

Mojomotors.com is a used car classified ad site that did some research to compile the five most and least expensive states to buy a car.

They took into account these unexpected fees. The study was based on an average car totaling $16,500.

The Most Expensive States to Buy a Car:

StateAverage Total FeesPercent Sales Price
Alabama$2,31314%
Arizona$2,29713.9%
Colorado$2,28413.8%
Tennessee$2,06112.5%
Florida$1,86911.3%

Cheapest States to Buy a Car

According to Mojomotors.com, Oregon is the least expensive state to buy a car.
StateAverage Total FeesPercent Sales Price
Oregon$1270.8%
Alaska$3562.2%
New Hampshire$3592.2%
Montana$7244.4%
Hawaii$8175%

How to Avoid Paying Sales Tax on a Car Purchased in Texas (Legally)

There are ways to get away with not paying sales tax on a car. Just be sure you know what you're doing.

Sales tax is one of those costs of a car that if you fail to add into your purchase can drastically price your car out of your comfort zone.

Is there a way to avoid paying sales tax on your car purchase?

Before we get into it, not paying sales tax when the situation permits is called tax evasion. It’s punishable by law.

We are not lawyers or tax professionals so take everything we say here with a grain of salt. But if you want to learn how to do it the right way, check out Findthebestcarprice.com.

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States with the Lowest Sales Tax on Cars

States like Montana, New Hampshire, Oregon and Delaware don’t have a sales tax on cars.

The amount of sales you can expect for a car varies from state to state.

States like Montana, New Hampshire, Oregon and Delaware don’t have a sales tax on cars at all.

States like North Carolina and Hawaii have the lowest sales tax on cars – it’s below 5%.

Oklahoma is the state with the highest sales tax on car at 11.5%. Followed by Louisiana at 11.45%. And Arkansas at 11.25%.

Cheapest Way to Buy a New Car

Cash is the #1 best way to buy any car.

Cash. I’ve been involved in a few car negotiations and what I can tell you without blushing is money talks.

And if you want to get the best possible deal on a car, mind the time of the year in which you purchase your car.

I learned this one from my dad.

He always purchased cars during the wintery months when there’s great deals and discounts.

Any time when manufacturers are rolling out new models is a great time to buy a car too.

This is when dealerships offer deep discounts and incentives to get rid of older cars so they can make room for new models.

You’ll see drastically reduced prices and interest rates.

States That Sell the Most Expensive Cars

New Jersey sells the most expensive cars in the United States.

You would think that given the high concentration of millionaires driving Porsches and Bentleys California would be the state that sells the most expensive cars.

Luxury cars account for 17.7% of all vehicles sales in the U.S.

After analyzing 10.9 million car sales, iSeeCars found that the state that sells the most expensive cars is New Jersey (27.9%).

California comes second (25.2%). Connecticut is (24.6%). Florida (22.1%). Texas comes in at number 16 at 17.5%.

Sources:

Iseecars.com; Dallasnews.com; Astonmartinhouston.com; Webuyanycarusa.com