Buying a car in 2025 can feel like navigating a financial maze. The sticker price is just the beginning, as costs fluctuate dramatically depending on where you make your purchase. State sales taxes, registration fees, and even dealership documentation fees can add thousands to your final bill. Are you looking to minimize your expenses and find the best possible deal on your next vehicle? Knowing the Cheapest State To Buy A Car is crucial for savvy buyers. Our in-depth analysis of nationwide data reveals the states where you can drive away with significant savings in 2025. Whether you’re in the market for a brand-new car or a reliable used vehicle, understanding regional price variations is your first step towards a smarter purchase. Let’s dive into the states where your car buying budget will stretch the furthest.
Discover the Top 5 Cheapest States to Buy a Car in 2025
If saving money is your priority when buying a car, focusing your search on specific states can lead to substantial cost reductions. Our research points to these five states as the most budget-friendly locations for car buyers in 2025.
1. Oregon: The Undisputed Cheapest State for Car Buyers
Why Oregon Takes the Top Spot: Oregon stands out as the cheapest state to buy a car primarily due to its zero state sales tax. This single factor alone can save you a significant percentage of the vehicle’s price compared to states with high sales taxes. Furthermore, Oregon boasts remarkably low vehicle registration fees, adding to the overall affordability. Dealership documentation fees in Oregon are also generally below the national average, making it an all-around winner for cost-conscious car buyers.
Total Additional Costs: Estimated between $500 and $700.
Potential Savings Compared to the Most Expensive States: Over $3,500.
Car prices across different states in the US
2. New Hampshire: Sales Tax Savings Galore
Why New Hampshire is Highly Affordable: Similar to Oregon, New Hampshire benefits from having no state sales tax. This lack of sales tax is the primary driver for its position as one of the cheapest states to buy a car. While New Hampshire’s registration fees are slightly higher than Oregon’s, the absence of sales tax still results in considerable savings, making it a very attractive option for buyers looking to minimize costs.
Total Additional Costs: Approximately $650 to $850.
Potential Savings Compared to the Most Expensive States: Between $3,000 and $3,500.
3. Montana: Low Taxes and Fees for Car Purchases
Why Montana Offers Great Deals: Montana has earned a reputation as a state where you can buy a car without excessive fees, and 2025 is no different. The state’s appeal lies in its absence of state sales tax combined with exceptionally low vehicle registration costs. For buyers seeking the cheapest state to buy a car, Montana consistently ranks high due to these favorable financial factors.
Total Additional Costs: Ranging from $500 to $750.
Potential Savings Compared to the Most Expensive States: Exceeding $3,000.
4. Alaska: Another No Sales Tax Haven
Why Alaska is a Budget-Friendly Choice: Alaska secures its place among the cheapest states to buy a car thanks to its zero state sales tax policy. Beyond the sales tax advantage, Alaska also features dealer documentation fees that are lower than the national average, contributing to reduced out-the-door expenses. These factors combine to make Alaska a surprisingly affordable location for car purchases, despite its geographical remoteness.
Total Additional Costs: Estimated between $650 and $900.
Potential Savings Compared to the Most Expensive States: Over $2,000.
5. Delaware: Low Fees and No Sales Tax
Why Delaware Completes the Top 5: Delaware rounds out our list of the top five cheapest states to buy a car, primarily due to its lack of state sales tax. This key benefit allows car buyers to avoid a significant upfront cost. While Delaware does have a documentation fee that is calculated as 4.25% of the vehicle’s value, which can act somewhat like a sales tax in practice, the state still manages to remain one of the more affordable options for purchasing vehicles in 2025, especially when compared to states with both sales tax and higher fees.
Total Additional Costs: Varying from $700 up to $2,200*.
Potential Savings Compared to the Most Expensive States: Over $2,000.
Complete Ranking of States by Car Buying Costs
To provide a broader perspective, we’ve compiled a comprehensive ranking of all 50 states, considering state sales tax rates, vehicle registration fees, and average dealership documentation fees. This data allows you to directly compare the out-the-door price of a new car in each state and understand where your state stands in terms of car buying affordability.
| 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 |
The Resurgence of Car Price Increases in 2025
After a temporary dip in 2024, the trend of rising car prices is back in 2025. New car prices are nearing previous record highs, and the market is witnessing an increased proportion of luxury vehicle sales. While manufacturers are beginning to introduce more affordable models to cater to budget-conscious consumers, the average cost of a new car remains a significant financial hurdle for many. This economic landscape underscores the importance of strategic car shopping. Choosing the right state to buy a car is no longer just a minor detail; it’s a critical decision that can significantly impact your overall spending and determine whether you get a fair deal or end up overpaying.
Smart Strategies to Save Money on Your Next Car Purchase
Whether you’re aiming for a new or used car in 2025, implementing these savvy strategies can help you keep more money in your pocket:
- Expand Your Search Across State Lines: If you live close to a state known for lower taxes and fees – particularly one of the cheapest states to buy a car we’ve highlighted – consider making a purchase there. The potential savings on sales tax alone can be substantial, easily reaching thousands of dollars. Remember to verify tax implications with your local DMV as sales tax is based on registration location, not purchase location.
- Negotiate Dealership Fees: Don’t hesitate to scrutinize and negotiate various dealership charges. Fees like documentation fees and unnecessary add-ons are often negotiable. Leveraging your research and understanding of typical fees can lead to significant reductions in your final price.
- Explore Opportunities with Leftover 2024 Models: Dealerships are typically motivated to clear out the previous year’s inventory to make room for newer models. This eagerness to sell older stock often translates to attractive discounts and incentives on 2024 models. Consider if a slightly older model meets your needs and take advantage of these potential savings.
- Utilize CarEdge Insights for Market Awareness: Stay informed and ahead of the curve by using resources like CarEdge Insights. Tracking real-time car price trends and market fluctuations empowers you to make well-timed purchasing decisions and secure the best possible deal in the current market.
Stay Informed About the 2025 Car Market
Car buying checklist to ensure a smooth purchase
Planning to buy a car this year? Being well-informed is your strongest asset. Knowing where to shop, particularly identifying the cheapest state to buy a car, can unlock significant savings. Before you step into a dealership, ensure you’ve conducted thorough research and understand the current market dynamics. Keep abreast of the latest car market trends, manufacturer incentives, and special offers by utilizing resources like the free CarEdge Research Hub. By comparing the total cost of ownership, exploring available deals, and staying informed, you can make the smartest car-buying decisions in 2025 and drive away with confidence, knowing you’ve secured the best possible value.
