Buying a car in 2025? Your location can have a big impact on how much you’ll pay. From state sales taxes to registration fees, the cost of a new or used car can vary by thousands of dollars depending on where you buy. So, where can you find the best deals this year? We’ve analyzed nationwide data to identify the cheapest states to buy a car in 2025. Whether you’re looking for a brand-new ride or a used car, knowing where to shop can help you save big on your next vehicle. Here’s where in America you’re most likely to drive home a great deal.

First, a Quick Look at Nationwide Price Trends

Nationwide, the average new car transaction price in 2025 is $49,740. However, that number only tells part of the story. The actual cost of a new car varies widely from one state to the next due to differences in sales tax, registration fees, and dealer charges.

By calculating the total out-the-door price for the average new car across all 50 states, we’ve pinpointed where car buyers will save the most – and where they’ll pay the highest prices. But first, an important note: When buying a car out of state, the sales tax you owe is based on where you register the vehicle, not where you buy it. Always check with your local DMV to confirm the exact process and avoid unexpected costs.

The 5 Cheapest States to Buy a Car in 2025

If you’re looking to save thousands of dollars on your next vehicle, your best bet is to shop in one of these five states.

1. Oregon Is the Cheapest State to Buy a Car

Why It’s the Cheapest: No state sales tax, low registration fees
Total Additional Costs: $500–$700
🚗 Average Savings vs. Most Expensive States: $3,500+

Oregon is the absolute cheapest state to buy a car in 2025, thanks to its lack of a statewide sales tax and low registration fees. On top of that, dealership documentation fees (Doc Fees) are lower than the national average.

2. New Hampshire

Why It’s Affordable: No state sales tax
Total Additional Costs: $650–$850
🚗 Average Savings vs. Most Expensive States: $3,000–$3,500

New Hampshire also has no state sales tax, keeping vehicle prices lower than in most other states. While registration fees in New Hampshire are slightly higher than in Oregon, the savings on sales tax still make it one of the most affordable places to buy a car.

3. Montana

Why It’s Affordable: No state sales tax, low registration costs
Total Additional Costs: $500–$750
🚗 Average Savings vs. Most Expensive States: $3,000+

Montana has long been a go-to state for those looking to buy a car while avoiding extra fees. With no state sales tax and relatively low registration fees, Montana remains one of the cheapest states to purchase a vehicle in 2025.

4. Alaska

Why It’s a Great Deal: No state sales tax, reasonable fees
Total Additional Costs: $650–$900
🚗 Average Savings vs. Most Expensive States: $2,000+

Alaska rounds out the top five with zero state sales tax and lower-than-average Doc Fees, making it one of the best states for keeping out-the-door costs low.

5. Delaware

Why It’s a Great Deal: No state sales tax, low fees
Total Additional Costs: $700–$2,200*
🚗 Average Savings vs. Most Expensive States: $2,000+

Delaware is another no-sales-tax state, meaning buyers can avoid a hefty extra charge when purchasing a new or used vehicle. However, Delaware charges a Doc Fee that is 4.25% of the vehicle’s value, which in practice in similar to a sales tax. Still, Delaware is one of the cheapest states to purchase a car in 2025.

The Complete Rankings

Looking for your state? We’ve crunched the numbers for all 50 states, using the state sales tax rates, vehicle registration fees, and average Doc Fees to calculate the out-the-door price in each U.S. state. Feel free to sort the data by any of the variables to see how your state stacks up.

Car Prices Are Climbing Again in 2025

Following a brief decline in prices in 2024, car prices are climbing again in 2025. New car prices are back near record highs, while luxury vehicles now make up a larger share of the U.S. market than ever before.

While automakers are finally introducing more budget-friendly models, the average new car price remains out of reach for many buyers. That’s why shopping strategically is more important than ever. Where you buy your next car matters, and can make the difference between a fair deal and overpaying. 

How to Save on Your Next Car Purchase

Whether you’re shopping for a new or used car in 2025, here are some smart ways to save:

• Compare prices in multiple states: If you live near a low-tax state, buying there could save you thousands.
• Negotiate fees: Some dealership fees, like Doc Fees and add-ons, can be negotiated.
• Consider leftover 2024 models: Dealers are eager to move last year’s inventory, which means big discounts.
• Use CarEdge Insights: Track real-time car price trends and get the best deal possible.

Stay Ahead of the Car Market in 2025

Buying a car this year? Knowing where to shop could save you thousands. Before heading to the dealership, make sure you’ve done your research and know what to expect. Stay on top of the latest car market trends, incentives, and deals with the free CarEdge Research Hub. Compare total cost of ownership, explore today’s best offers, and make the smartest car-buying decisions in 2025.