Hey, Einstein! Here’s the Cheapest State to Buy a Car

Did you know that Albert Einstein never learned to drive? It’s true. He was also a beloved mathematician, but his brother Frank was a mad scientist.

Okay, we get it! No more bad jokes – it’s time to be serious. You want to make genius moves when it comes to buying a car. That’s why you’re here, right? We may not be Albert Einstein, but we can make you one of the savviest shoppers out there when it comes to finding great auto prices.

We’ve been hauling vehicles around the country for 29 years. All that time and space has made us whiz kids at doing the math on a darn good deal. This is always a valuable ability, but it’s a relatively priceless skill in today’s intense market.

Getting on our wavelength can help you make the best of some of the dark matters plaguing the auto industry. It’s time to sit down, open your notebook, and take our expert class on relative market forces and how you can calculate the cheapest state to buy a car!

Chip Dips and Vehicle Shortages

Buyers are forced to become smarter and savvier whenever there’s any kind of vehicle parts shortage. It affects the market, making the models that do have those scarce parts more in-demand and valuable. Today’s auto shoppers are faced with a semiconductor chip shortage – a result of the pandemic’s global chaos that saw chip production levels taking a steep dive.

Modern vehicles are more chip-centric than ever, which is why the problem is so significant. It’s persisting right to the end of 2022 and is bad enough that some automakers are cutting production numbers for 2023. Big names like Volvo and Toyota are closing factories or sending fewer cars to market.

Other industry giants like Ford and Honda are also making some rough choices. Some models are being shipped without previously available features, making them less cost-effective over time. Ford is limiting the number of models provided to dealers by up to 80%, while Honda is looking to make lower inventory levels the norm.

This year and next, we will see more clamoring buyers than there is inventory. Dealers will barely have to compete. Your nearest showroom will start ramping up prices to reap profits and stay in business. Great news, huh? Here’s how to make the best of a bad situation.

What State Is the Cheapest to Buy a Used Car?

We solve this problem by approaching it from two basic angles. People are either looking to buy a new car or a used one. Whichever applies can dramatically impact the price. As you might imagine, there’s one heck of an increased demand for used vehicles when the cost of buying a new one goes sky-high.

Unfortunately, “used” isn’t exactly the budget-friendly label it used to be. All those owners looking to sell their cars also know there’s a production shortage going on, meaning they get to charge more – sometimes much more – for their pre-owned model.

Even taking the traditionally cheaper route now requires some extra time and diligence. Here are some of the best states to consider when buying used, according to those finance-fixated watchdogs at Forbes Magazine:

  • Indiana: $21,961
  • Ohio: $22,244
  • Connecticut: $22,528
  • Virginia: $22,618
  • Kentucky: $22,995

Those are the basic numbers. They’re great to know, but don’t start booking that flight to Indiana just yet! They don’t give you the whole picture.

Some Further Statistics in the Used Car Equation

Buying a used car involves some traditional “kicking the tires” type of savvy. There’s more under the bumper, so to speak, than you may have previously considered.

Did you know that geography, median income, and population age demographics can all influence the cheapest state to buy a car? You should factor them in. We’ve picked three states not on the list above to illustrate how more than mechanics and miles on the clock can play a part in your purchase.

-Florida

The Sunshine State is generally a good bet for a used car when it comes to purely upfront costs. The great climate spares vehicles from going through any inclement weather, hurricanes aside. Florida’s also basically flat, meaning no wear and tear from chugging uphill.

Florida has a higher percentage of older citizens who are (statistically speaking, at least) more careful drivers, meaning healthier used cars. These bonuses create strong potential for fewer maintenance and repair costs after you inherit the keys. Lastly, Florida is also one of the more affluent states meaning people are more likely to switch cars more often. This increases your chances of finding a used one in a very tight market.

The bad news is that Florida has a 6% tax on the sale price, less the trade-in. This must be added on to expenses like registration costs, documentation, insurance, and DMV fees. All of these are high in Florida.

-New Hampshire and Oregon

New Hampshire is another affluent state, meaning more chances of finding a used car. It’s also a state with no sales tax, as is Oregon. The latter is widely held to be a great place for used vehicles due to impressively low registration fees.

Both states may not be tops for upfront affordability, but they’re winners in the after-sale as they also make the top 10 for cheapest car insurance, according to carinsurance.com.

You can see the “swings and roundabouts” here! High upfront costs with low after-sales versus the opposite makes the “cheapest state” a relative term. The golden rule never changes: shop around to find the best deal!

What State Is the Cheapest to Buy a New Car?

Here’s where the equation gets a little trickier. There’s no such thing as the best state to buy a new car because it all depends on the MSRP, the manufacturer’s suggested retail price.

The chip shortage could help you in a small way, as some models may be slightly cheaper if they’ve been shipped without a certain function that depended on a chip. You’re getting less for your money, but if that’s something you can live with, ask the dealership for any chip-related markdowns.

The best states to buy new will have the lowest after-sales costs and insurance. Finding states good for both takes a little cross-referencing. Here’s a recap of the top ten states for low car insurance from carinsurance.com:

  1. Ohio: $1,023
  2. Maine: $1,116
  3. Idaho: $1,121
  4. Vermont: $1,158
  5. Oregon: $1,244
  6. Indiana: $1,256
  7. Hawaii: $1,306
  8. New Hampshire: $1,307
  9. Virginia: $1,321
  10. Iowa: $1,321

Numbers 5 and 8 have no state or local sales tax, nor do Montana or Delaware, which don’t make the list. This means that New Hampshire and Oregon again appear to be good places for buyers. States you’ll probably want to avoid as being worst in combined sales tax rates are Tennessee, Louisiana, Arkansas, Washington, and Alabama, according to data from the Tax Foundation.

The Cheapest State to Buy a Car May Not Be Your Native One

The way the market is headed means you may have to go farther afield to find the deal you want. You could get yourself over there and drive all the way back, increasing your chances of harming yourself or the vehicle in an accident. We recommend choosing a reputable auto hauler who will take care of transport for you.

Shipping a car to Florida costs somewhere between $500 to $2,000. This ballpark figure depends on variables such as the time of year you ship the car and the mode of transportation you use. There are essentially two types for most standard vehicles. These are open or enclosed transport.

Open transport is cheaper because it’s more readily available and can carry many cars at one time. This splits the auto shipper’s expenses between multiple drivers, so everyone on board only pays part of the overall cost. Open shipping is a little riskier because it exposes cars to the elements and on-road debris.

Enclosed transport gives the car four walls and a roof, which offers greater protection but also makes it more expensive. There’s also less demand for this method which further increases the price. Whichever method you choose, make sure the company is licensed and insured. You can also run their details through the SAFER system for a clearer picture of their service and safety record.

Contact Geyers Towing and Recovery with Any Questions

We’re the team to choose whenever you want to buy a car out of state and have it shipped safely to you. Our versatile trucks can handle cargo of every class and weights up to 75 tons (150,000 lbs.). Our staff is fully licensed, insured, and WreckMaster-certified to supply first-class service and care.

You can count on Geyers Towing and Recovery to take care of you 24/7, year-round. Visit our contact page or call (301) 259-3177 anytime for a free quote!

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