The Best 10 States To Buy a Car — How Used Cars and Fees Factor In
Written by
Vance Cariaga
Edited by
Rebekah Evans
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One of the best ways to save money on a car is to buy it used rather than new. The average used car price in the U.S. was $25,172 as of August 2024, according to Kelley Blue Book. Meanwhile, the average price of a new car stood at $47,870 — nearly twice as much. But no matter what type of car you buy, you’ll get a better deal in some states than in others.
Car prices are lower in certain states because of factors such as sales taxes, fees, competition and availability. They are also cheaper to operate in certain states due to lower than average gas prices, maintenance costs, property taxes and insurance rates.
A recent study from National Business Capital looked at seven different metrics to rank each state based on the cost of purchasing and owning a car. One thing it found was that Western states tend to be the most expensive for buying and operating a car, partly because of stricter environmental regulations than elsewhere in the country. Used cars are usually cheaper in the Northeast and Midwest because of lower taxes and fees.
Based on a scoring system out of 100, these are the 10 best states to buy a car.
1. Vermont
- Score: 81.3
Used cars are cheaper in Vermont than any other state at an average price tag of $31,445 as of 2022. New car buyers will find “relatively low” dealer document fees and sales taxes in the Green Mountain State, as well as low insurance rates. However, you will pay more than average for gasoline and registration fees.
2. Ohio
- Score: 73.5
The Buckeye State had the third-lowest average sales price at $32,267 as of 2022. Dealer document fees were lower in Ohio than in most states at around $250, while sales taxes here are also lower than average.
3. Minnesota
- Score: 69.2
Car buyers in Minnesota have some of lowest costs in the country for dealer and registration fees and there is no property tax here. Minnesota would rank even higher except that its sales taxes and insurances premiums are higher than average.
4. Delaware
- Score: 67.8
Used car prices in Delaware were the sixth lowest in the country in 2022 at an average of $32,924 and buyers don’t have to pay sales taxes. The main financial burden car owners face here is insurance, which can “easily run north” of $1,000 a year.
5. Pennsylvania
- Score: 65.9
A typical used car in the Keystone State averaged around $33,097 in 2022, which ranked it as the ninth lowest. Car buyers also face a “modest” sales tax and lower-than-average insurance costs. But gas and registration fees tend to be on the high side.
6. Indiana
- Score: 63.9
The Hoosier State ranks among the cheapest in the country for used car prices ($32,936 on average) and dealer fees. Insurance costs also tend to be low if you settle for minimal coverage. Instead of property taxes you will have to pay an excise tax on car purchases in Indiana, which are higher than average.
7. Wisconsin
- Score: 63.7
Insurance rates are pretty cheap in Wisconsin and you’ll pay lower-than-average used car prices ($34,018), dealer fees and sales taxes. On the downside, the Badger State has high gas prices and registration fees.
8. Texas
- Score: 63.6
Comparatively low gas prices and dealer fees in the Lone Star State help compensate for higher-than-average used car prices ($35,061) and sales taxes.
9. New Hampshire
- Score: 63.2
The Granite State is “one of the best places in the country to buy a used car” because it charges no sales tax and used car prices are the second lowest in the country at an average of $31,833. However, those savings are offset somewhat by higher-than-average excise taxes, registration fees and insurance costs.
10. Mississippi
- Score: 61.7
Mississippi’s high ranking is largely due to its low gas prices and registration fees. Used cars are only slightly cheaper-than-average, as are insurance costs.
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