I live in NY. I will be buying a car for my son, a college student in Alabama. Is it better to buy the car in one state or the other, considering price, tax, registration, insurance, etc.?
@rbirns1 said:
I live in NY. I will be buying a car for my son, a college student in Alabama. Is it better to buy the car in one state or the other, considering price, tax, registration, insurance, etc.?
I assume you'll have to register the car in NY, either way, so I don't see any advantage in buying it out of state.
I don't see any huge advantage. Alabama sales tax rates can be real tricky, so be careful there. Insurance rates depend on the address where the car is registered. It's possible you might find somewhat lower prices in Alabama on certain types of vehicles.
We could register the car in Alabama, as he has an apartment there. I checked with a dealer in the area, and they said total sales tax is 3.5%. We pay 8.75% in NY.
What happens if I buy the car in Alabama and register in NY? Do I pay any sales tax to the dealer?
That's interesting news, since Alabama has a 4% state tax rate plus municipalities add theirs on to it, up to 12% total in some areas. So I'd check that out more carefully. Montgomery adds 2%, Birmingham adds 4%, for example.
If Alabama and NY have a reciprocity agreement on sales tax, which most states do, then NY would collect the difference in that case. But I don't know all the states' relationships, so that's a NY DMV question for sure.
If you are in rural NY, I doubt the insurance would be much higher than ALA, but if you are in a high density metro area, insurance could very well be cheaper for an ALA resident.
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I assume you'll have to register the car in NY, either way, so I don't see any advantage in buying it out of state.
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I don't see any huge advantage. Alabama sales tax rates can be real tricky, so be careful there. Insurance rates depend on the address where the car is registered. It's possible you might find somewhat lower prices in Alabama on certain types of vehicles.
What happens if I buy the car in Alabama and register in NY? Do I pay any sales tax to the dealer?
That's interesting news, since Alabama has a 4% state tax rate plus municipalities add theirs on to it, up to 12% total in some areas. So I'd check that out more carefully. Montgomery adds 2%, Birmingham adds 4%, for example.
You can check on your city here:
http://www.sale-tax.com/Alabama
If Alabama and NY have a reciprocity agreement on sales tax, which most states do, then NY would collect the difference in that case. But I don't know all the states' relationships, so that's a NY DMV question for sure.
If you are in rural NY, I doubt the insurance would be much higher than ALA, but if you are in a high density metro area, insurance could very well be cheaper for an ALA resident.