Which Is the Cheapest State to Buy a Car?
Which is the best state to buy a car if you want to pay the minimum in taxes, fees, and costs? Buying a car is about far more than just the MSRP and dealer markup, as various other factors affect how cheap a new car will be by state, even if it’s exactly the same model with the same MSRP. So, what are these factors affecting the final price you’ll pay, and where is the cheapest place to buy a car in the US in 2025? Let’s find out.
Factors Affecting New Car Prices
Several factors influence what cars with the same MSRP will actually cost:
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Sales tax. Some states have high sales taxes, and others, none at all.
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Dealer fees. Can vary significantly by dealer and state.
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Vehicle availability. States with higher competition and inventory offer better prices.
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Insurance. This doesn’t cost the same in all states either.
Additional potential factors, depending on the state, include:
The Cheapest State to Buy a Car
Because there are so many variables, it’s not always easy to rank states in order of price, as car prices vary, as do the factors listed above, so some cars would be cheaper in certain states, but others may come out to a lower price in other states. We have opted to go for the latest data from CarEdge for these rankings to identify the 10 cheapest states to buy a new car. We also list CarEdge’s ranking for new car prices in these states, including taxes and fees.
1. Oregon
Average new car price, incl. taxes and fees: $50,159
Oregon scores at or near the top of the list on most metrics, and factors responsible for its generally low prices on new vehicles include having no sales tax and low registration fees ($169), while its average dealership documentation fees ($250) are also lower than the national average. CarEdge says you can expect your total additional costs, over and above the MSRP, to amount to around $500 to $700 in Oregon.
2. New Hampshire
Average new car price, incl. taxes and fees: $50,166
New Hampshire doesn’t have sales tax either, and cars tend to be cheap to insure here, which makes car ownership particularly cheap overall. Its registration fees ($51) are low, too, and the average documentation fee is $375. CarEdge expects your additional costs for a new car to be around $650 to $850 in New Hampshire.
3. Montana
Average new car price, incl. taxes and fees: $50,276
Montana doesn’t charge sales tax either, but this is partly offset by higher-than-average purchase prices. However, registration fees ($237) are fairly low, so it still scores very well, and the average documentation fee is $299. CarEdge’s estimated total additional costs in Montana amount to only $500 to $750.
4. Alaska
Average new car price, incl. taxes and fees: $50,284
Dealership documentation fees ($299) below the national average, reasonable registration fees ($245), and no sales tax are the main attractions that keep Alaska’s new cars cheap. According to CarEdge, expect to pay only around $650 to $900 extra for a new car in Alaska, over the MSRP.
5. Delaware
Average new car price, incl. taxes and fees: $51,910
Another state without sales tax and a low (just $45) registration fee, placing it high on affordability for new cars. The state does charge 4.25% of the car’s value as a documentation fee, which can be seen as a kind of sales tax, and can cause costs to balloon more for expensive cars, but it’s still generally cheap in the bigger picture. CarEdge says that you generally pay around $700 to $2,200 extra for a car here, but that upper figure can get quite big on expensive cars; e.g., a $100K car will attract a $4,250 doc fee. Still, its average new car price bags it the number 5 spot of the cheapest states.
This concludes our top 5 states, which are also the only ones that don’t charge you any sales tax. The rest of the top 10 looks like this:
6. New York
Average new car price, incl. taxes and fees: $52,040
New York is the first state on this list to charge sales tax at 4%, but it charges low documentation and registration fees of $175 and $146, respectively – good enough for 6th place overall.
7. South Dakota
Average new car price, incl. taxes and fees: $52,140
South Dakota charges 4.2% sales tax, but $200 for the average doc fee and just $122 for registration keeps it competitive – and in the top 10.
8. Hawaii
Average new car price, incl. taxes and fees: $52,192
Hawaii’s 4% sales tax, average $395 documentation fees, and mere $78 registration fee make it good enough for 8th place.
9. Georgia
Average new car price, incl. taxes and fees: $52,338
Georgia’s $599 average for documentation fees is high, but the registration fee of $20 is almost nothing, and the sales tax is the expected 4%, putting it in 9th place.
10. Missouri
Average new car price, incl. taxes and fees: $52,455
Missouri rounds out the top 10 with the highest sales tax of 4.23% among these top 10 states and a hefty $565 average doc fee, but the registration fee of $57 is low.
Runners Up
11. Colorado – $52,469
12. New Mexico – $52,553
13. Wisconsin – $52,598
14. Alabama – $52,601
15. North Dakota – $52,636
The Most Expensive States to Buy a New Car
At the other end of the spectrum, all the various factors conspire to make these states the ones where it’s generally the most expensive to buy and own a new car:
Main drivers include high sales taxes of between 6 and 7.25%. Mississippi charges $719 for registration, and Florida’s average documentation fee is $999.
Final Thoughts
Look beyond the sticker price when you buy a new car, because many factors affect its final price, and if you live in a state with a very high sales tax or registration fee, you could save a lot by buying a car in a cheaper state. Some states may also charge additional fees that affect the price of a car, and that we haven’t included here, such as emissions testing, car title fees, or extra fees for a temporary vehicle registration. Check with your local state authorities for the payable fees, so you’re aware of all the hidden costs.
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