Buying a car is a major investment—but did you know where you buy it can be just as important as what you buy? In the United States, the total cost of purchasing a vehicle can vary widely from state to state due to differences in sales tax, registration fees, dealer documentation charges, and insurance rates. Some states offer significant savings that could trim hundreds or even thousands of dollars off the final price.
In this guide, we break down the Top 10 Cheapest States to Buy a Car in 2025, using the latest data on taxes and fees to help you make an informed, cost-effective decision. Whether you’re planning your next car purchase or simply exploring options to save money, this list will point you in the right direction.
Top 10 Cheapest States To Buy A Car (2025)
When purchasing a car in the U.S., the total cost can vary significantly depending on the state due to factors like sales tax, registration fees, dealer documentation fees, and insurance premiums. As of 2025, here are the top 10 cheapest states to buy a car, considering these expenses:
1. Oregon
- Sales Tax: 0%
- Dealer Documentation Fees: Approximately $250
- Registration Fees: Around $169
- Average New Car Price (with taxes and fees): $50,159
- Why It’s Affordable: Oregon’s lack of a sales tax and low registration and documentation fees make it the most cost-effective state for car purchases.
2. New Hampshire
- Sales Tax: 0%
- Dealer Documentation Fees: Approximately $375
- Registration Fees: Around $51
- Average New Car Price (with taxes and fees): $50,166
- Why It’s Affordable: With no sales tax and minimal registration fees, New Hampshire offers significant savings on car purchases.
3. Montana
- Sales Tax: 0%
- Dealer Documentation Fees: Approximately $299
- Registration Fees: Around $237
- Average New Car Price (with taxes and fees): $50,276
- Why It’s Affordable: Montana’s absence of sales tax and relatively low fees contribute to its affordability for car buyers.
4. Alaska
- Sales Tax: 0%
- Dealer Documentation Fees: Approximately $299
- Registration Fees: Around $245
- Average New Car Price (with taxes and fees): $50,284
- Why It’s Affordable: Alaska’s no sales tax policy and reasonable fees make it a cost-effective state for purchasing vehicles.
5. Delaware
- Sales Tax: 0%
- Dealer Documentation Fees: Approximately $2,114 (Note: Delaware charges a doc fee of 4.25% of the vehicle’s value, which functions similarly to a sales tax)
- Registration Fees: Around $45
- Average New Car Price (with taxes and fees): $51,910
- Why It’s Affordable: Despite the doc fee, Delaware’s lack of a traditional sales tax and low registration fees make it an attractive option for car buyers.
6. New York
- Sales Tax: 4%
- Dealer Documentation Fees: Approximately $175
- Registration Fees: Around $146
- Average New Car Price (with taxes and fees): $52,040
- Why It’s Affordable: New York’s moderate sales tax and relatively low fees contribute to its position among the more affordable states for car purchases.
7. South Dakota
- Sales Tax: 4.2%
- Dealer Documentation Fees: Approximately $200
- Registration Fees: Around $122
- Average New Car Price (with taxes and fees): $52,140
- Why It’s Affordable: South Dakota’s low sales tax and fees make it a cost-effective state for buying cars.
8. Hawaii
- Sales Tax: 4%
- Dealer Documentation Fees: Approximately $395
- Registration Fees: Around $78
- Average New Car Price (with taxes and fees): $52,192
- Why It’s Affordable: Hawaii’s moderate sales tax and low registration fees contribute to its affordability for car buyers.
9. Georgia
- Sales Tax: 4%
- Dealer Documentation Fees: Approximately $599
- Registration Fees: Around $20
- Average New Car Price (with taxes and fees): $52,338
- Why It’s Affordable: Georgia’s low registration fees and moderate sales tax make it an economical choice for purchasing vehicles.
10. Missouri
- Sales Tax: 4.23%
- Dealer Documentation Fees: Approximately $565
- Registration Fees: Around $57
- Average New Car Price (with taxes and fees): $52,455
- Why It’s Affordable: Missouri’s moderate sales tax and low registration fees contribute to its affordability for car buyers.
Important Consideration: While purchasing a car in a state with lower taxes and fees can save money, it’s essential to note that if you register and use the vehicle in your home state, you may be subject to your state’s taxes and fees. Always check with your local Department of Motor Vehicles (DMV) to understand the implications of buying a car out-of-state.
Choosing the right state to purchase your next car can make a big difference in how much you spend. From tax-free states like Oregon and New Hampshire to budget-friendly options like South Dakota and Missouri, each of these ten states offers unique advantages that can help you save on your total vehicle cost. However, always remember to factor in your home state’s registration laws and taxes if you’re planning to register the car there. By understanding all the costs involved and making a smart, informed decision, you can drive away with a great deal—and peace of mind.
