Buying a car in 2025 involves more than just choosing the right model; your location can dramatically impact the final price. From varying state sales taxes to registration fees, the out-the-door cost of a vehicle can differ by thousands of dollars depending on where you make your purchase. If you’re aiming to maximize your savings, knowing the Cheapest State To Buy A Car is crucial. This guide dives into the data to reveal the most affordable states for car buyers in 2025, helping you drive away with the best possible deal.
Why State Matters When Buying a Car: Unveiling the Price Variations
The sticker price of a car is just the beginning. The total cost you pay includes a range of additional charges that are heavily influenced by the state where you buy and register your vehicle. Key factors contributing to these price differences include:
- State Sales Tax: One of the most significant variables, sales tax rates differ widely, and some states, like those featured as the cheapest, have no sales tax at all. This alone can save you a substantial percentage of the vehicle’s price.
- Vehicle Registration Fees: These fees, required to legally register and operate your vehicle, also vary from state to state. Lower registration fees contribute to overall savings.
- Dealer Documentation Fees (Doc Fees): These fees cover the dealership’s cost of processing paperwork. While often negotiable, average doc fees differ by state and impact the final out-the-door price.
Nationwide, the average new car transaction price in 2025 hovers around $49,740. However, this figure is just an average. The actual cost can fluctuate significantly based on these state-level charges. It’s essential to understand that when buying a car out of state, you pay sales tax based on where you register the vehicle, not where you buy it. Always confirm the specific regulations with your local Department of Motor Vehicles (DMV) to avoid unexpected expenses.
Top 5 Cheapest States to Buy a Car in 2025: Drive Away with Savings
For car buyers looking to minimize expenses, focusing your search in these top 5 cheapest states can lead to significant savings. These states consistently rank as the most affordable due to a combination of no or low sales taxes and reasonable fees.
1. Oregon: The Undisputed Leader in Car Affordability
Why It’s the Cheapest: Oregon takes the crown as the cheapest state to buy a car thanks to its zero state sales tax and remarkably low vehicle registration fees. Furthermore, dealership documentation fees in Oregon are typically below the national average, adding to the savings.
Total Additional Costs: $500–$700
🚗 Average Savings vs. Most Expensive States: $3,500+
By avoiding sales tax alone, buyers in Oregon save a substantial amount upfront. Combined with lower fees, Oregon offers the most budget-friendly environment for purchasing a vehicle in 2025.
2. New Hampshire: Sales Tax-Free Car Shopping
Why It’s Affordable: Mirroring Oregon, New Hampshire also boasts no state sales tax, making it a highly attractive option for car buyers seeking to reduce their overall expenditure.
Total Additional Costs: $650–$850
🚗 Average Savings vs. Most Expensive States: $3,000–$3,500
While New Hampshire’s registration fees are slightly higher than Oregon’s, the absence of sales tax firmly positions it as one of the cheapest states to buy a car, offering considerable savings compared to states with sales tax.
3. Montana: Big Sky Country, Big Car Savings
Why It’s Affordable: Montana continues to be a haven for car buyers looking to escape extra charges. With no state sales tax and low registration costs, it remains a top choice for those prioritizing affordability.
Total Additional Costs: $500–$750
🚗 Average Savings vs. Most Expensive States: $3,000+
The combination of no sales tax and minimal registration fees in Montana makes it a consistently cheapest state to buy a car, ensuring buyers keep more money in their pockets.
4. Alaska: Affordable Car Deals in the Last Frontier
Why It’s a Great Deal: Alaska secures its place in the top five with zero state sales tax and lower-than-average Doc Fees. This combination significantly reduces the out-the-door price for car buyers.
Total Additional Costs: $650–$900
🚗 Average Savings vs. Most Expensive States: $2,000+
Alaska’s lack of sales tax and reasonable fees contribute to making it one of the cheapest states to buy a car, especially attractive for residents of the Pacific Northwest and beyond.
5. Delaware: Another Tax-Free Haven for Car Buyers
Why It’s a Great Deal: Delaware rounds out the list of no-sales-tax states, offering buyers the advantage of avoiding this significant expense when purchasing a vehicle.
Total Additional Costs: $700–$2,200*
🚗 Average Savings vs. Most Expensive States: $2,000+
While Delaware technically has no sales tax, it’s important to note their Doc Fee is calculated as 4.25% of the vehicle’s value. Despite this, when considering overall costs compared to states with both sales tax and potentially higher fees, Delaware still ranks as one of the cheapest states to buy a car in 2025.
Complete Ranking: Find Your State’s Car Buying Cost
To give you a comprehensive overview, we’ve compiled data for all 50 states, analyzing state sales tax rates, vehicle registration fees, and average Doc Fees to calculate the estimated out-the-door price for a new car in each state. Explore the table below to see where your state ranks and how costs compare across the country.
| State | Cheapest States to Buy a Car | State Sales Tax | Average Doc Fee | Registration Fees | Average New Car Price (w/ tax and fees) |
|---|---|---|---|---|---|
| Oregon | 1 | 0.00% | $250 | $169 | $50,159 |
| New Hampshire | 2 | 0.00% | $375 | $51 | $50,166 |
| Montana | 3 | 0.00% | $299 | $237 | $50,276 |
| Alaska | 4 | 0.00% | $299 | $245 | $50,284 |
| Delaware | 5 | 0.00% | $2,114* | $45 | $51,910 |
| New York | 6 | 4.00% | $175 | $146 | $52,040 |
| South Dakota | 7 | 4.20% | $200 | $122 | $52,140 |
| Hawaii | 8 | 4.00% | $395 | $78 | $52,192 |
| Georgia | 9 | 4.00% | $599 | $20 | $52,338 |
| Missouri | 10 | 4.23% | $565 | $57 | $52,455 |
| Colorado | 11 | 2.90% | $699 | $595 | $52,469 |
| New Mexico | 12 | 4.88% | $339 | $60 | $52,553 |
| Wisconsin | 13 | 5.00% | $299 | $85 | $52,598 |
| Alabama | 14 | 4.00% | $489 | $393 | $52,601 |
| North Dakota | 15 | 5.00% | $299 | $123 | $52,636 |
| Oklahoma | 16 | 4.50% | $599 | $100 | $52,665 |
| Louisiana | 17 | 5.00% | $425 | $64 | $52,703 |
| Wyoming | 18 | 4.00% | $500 | $616 | $52,835 |
| Nebraska | 19 | 5.50% | $299 | $83 | $52,843 |
| Ohio | 20 | 5.75% | $250 | $31 | $52,866 |
| Vermont | 21 | 6.00% | $200 | $78 | $52,986 |
| Maine | 22 | 5.50% | $499 | $40 | $53,000 |
| West Virginia | 23 | 6.00% | $250 | $52 | $53,010 |
| Texas | 24 | 6.25% | $150 | $74 | $53,056 |
| Michigan | 25 | 6.00% | $260 | $128 | $53,096 |
| Arkansas | 26 | 6.50% | $129 | $28 | $53,113 |
| Utah | 27 | 6.10% | $299 | $57 | $53,114 |
| South Carolina | 28 | 6.00% | $400 | $40 | $53,148 |
| North Carolina | 29 | 4.75% | $699 | $370 | $53,159 |
| Kentucky | 30 | 6.00% | $450 | $26 | $53,184 |
| Pennsylvania | 31 | 6.00% | $449 | $39 | $53,196 |
| Virginia | 32 | 5.30% | $799 | $36 | $53,197 |
| Iowa | 33 | 6.00% | $180 | $333 | $53,221 |
| Washington | 34 | 6.50% | $199 | $73 | $53,228 |
| Idaho | 35 | 6.00% | $399 | $126 | $53,233 |
| Illinois | 36 | 6.25% | $347 | $151 | $53,330 |
| Minnesota | 37 | 6.88% | $125 | $69 | $53,338 |
| Massachusetts | 38 | 6.25% | $459 | $60 | $53,351 |
| Maryland | 39 | 6.00% | $499 | $187 | $53,394 |
| Indiana | 40 | 7.00% | $199 | $38 | $53,440 |
| Kansas | 41 | 6.50% | $499 | $80 | $53,535 |
| Arizona | 42 | 5.60% | $499 | $564 | $53,573 |
| Rhode Island | 43 | 7.00% | $399 | $58 | $53,660 |
| Connecticut | 44 | 6.35% | $599 | $180 | $53,660 |
| Nevada | 45 | 6.85% | $499 | $49 | $53,677 |
| Tennessee | 46 | 7.00% | $499 | $29 | $53,731 |
| California | 47 | 7.25% | $85 | $524 | $53,936 |
| New Jersey | 48 | 6.63% | $695 | $271 | $53,986 |
| Florida | 49 | 6.00% | $999 | $297 | $54,004 |
| Mississippi | 50 | 7.00% | $425 | $719 | $54,347 |
Alt text: Data table showing the ranking of states from cheapest to most expensive for buying a car in 2025, including sales tax, doc fees, registration, and total price.
Car Prices on the Rise Again: Navigating the 2025 Market
After a slight dip in 2024, car prices are unfortunately trending upwards again in 2025. New car prices are nearing record highs, and the market is seeing a surge in luxury vehicle sales, impacting overall averages.
While some automakers are introducing more affordable models, the average new car price remains a significant financial hurdle for many. This makes strategic shopping more vital than ever. Where you choose to buy your next car truly matters and can be the deciding factor between getting a good deal and overspending. Finding the cheapest state to buy a car is a smart move in this market.
Smart Strategies to Save Money on Your Car Purchase
Whether you’re in the market for a new or used car in 2025, here are actionable strategies to reduce your expenses:
Explore Out-of-State Options
If you reside near a border of a low-tax state, consider expanding your car search. Buying in a cheapest state to buy a car and registering it in your home state can lead to substantial savings, especially if you live near Oregon, New Hampshire, Montana, Alaska, or Delaware.
Negotiate Dealership Fees
Don’t hesitate to negotiate fees like Doc Fees and other dealer add-ons. While some fees are standard, there’s often room for negotiation, potentially saving you hundreds of dollars.
Consider Previous Year Models
Dealerships are typically motivated to clear out the previous year’s inventory to make space for new models. This often translates to significant discounts and incentives on leftover 2024 models.
Leverage CarEdge Insights
Stay informed about real-time car price trends and market conditions. Utilize resources like CarEdge to gain insights into fair pricing and negotiation tactics, ensuring you get the best possible deal, regardless of the state you choose.
Stay Informed and Drive Smart in 2025’s Car Market
Buying a car in 2025 requires careful planning and research. Knowing where to shop, particularly focusing on the cheapest state to buy a car, can save you thousands of dollars. Before visiting a dealership, equip yourself with knowledge and understand the market dynamics. Stay updated on the latest car market trends, incentives, and deals by exploring resources like the free CarEdge Research Hub. Compare total cost of ownership, explore current offers, and make informed car-buying decisions in 2025 to drive away satisfied with both your new vehicle and the price you paid.
