Where to Buy a Car in 2025: A Guide to Taxes, Fees, and Car Availability

Buying a car can be different depending on where you live. The amount of tax, the cost for paperwork, and how many cars are available can change a lot from one state to another. 

In this article, we're taking a look at which states are the best and worst places to buy a car in 2025, focusing on things like sales tax, insurance costs, paperwork fees, and how easy it is to find the car you want.

Check out: Auto Loan Rate Forecast for 2025
 

Top States for Car Buying in 2025

Some states make it easier to buy a car thanks to benefits like having no sales tax and fewer surprise fees. 

States like Alaska, Montana, Oregon, Delaware, and New Hampshire have no statewide sales tax, which can save you money. Iowa also deserves a shoutout for its low car insurance rates, which average less than $720 a year.

A few other states have low sales tax rates, between 2% and 5%. These include Alabama, Colorado, Hawaii, Louisiana, Missouri, New Mexico, New York, North Carolina, Oklahoma, South Dakota, and Virginia. A lower sales tax can mean big savings, depending on the car's price.

Document fees, or "doc fees," are charges dealers add to cover the paperwork for your car purchase. Not all states limit how much can be charged for these fees, and the cost varies. 

States with the lowest doc fees, making them better for buying a car, are Minnesota, Arkansas, Oregon, South Dakota, Iowa, Texas, Washington, and Indiana, with fees ranging from $75 to $150. California has a low average doc fee of $85, but high sales taxes and a shortage of new cars push it off the list of best states for car buying.
 

States to Avoid When Buying a Car in 2025

On the other hand, some states pose challenges for car buyers, especially if you're looking for a new car. 

Florida, California, and some southern states often have fewer new cars available, which can make it hard to find what you're looking for. States like Alabama, Arizona, California, and Tennessee might hit your wallet hard due to high additional fees, which can average around $2,000.

Doc fees can be especially steep in Alabama, Virginia, and North Carolina, soaring between $485 and $599. Florida is notably tough for new car buyers, with no limit on doc fees (which average $995) and a scarce selection of new cars.

In 2025, the states struggling most with new car availability are Georgia, Florida, California, New Jersey, and Texas. But Florida’s used car market might still be attractive due to the large selection of used cars, thanks largely to the state’s older population and regular inflow of used cars. 

However, beware of the higher risk of flood-damaged cars in Florida's used car scene.

Read about: The Easiest and Most Expensive Car Brands to Keep Running and Why That Matters

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