Are cars more expensive in California?

Thinking of buying a car? Don’t be surprised to learn that the price of vehicles varies based on state. This doesn’t just apply to the initial price, but the extra costs. So, are cars more expensive in California?

Cars are more expensive in California due to higher demand, the long lifespan of the cars, sale taxes, insurance rates, distance, and the high registration and dealer fees. California is the most expensive place to buy a car in terms of initial cost, and the tenth most expensive for used vehicles.

While it’s more expensive to get new cars, production shortages have led to used cars becoming more expensive. The average cost of a used car in California is $25,555. Here, we discuss the best and worst states to buy a car and why cars are more expensive in some states.

Best States to Buy A Car

The initial cost of a car is one of the critical things you must consider when choosing a vehicle. When considering where to find the cheapest initial cost, the answer is Florida. The price of cars in Florida is about 10% below the national average, so you can save a lot on how much you’ll be spending to acquire the car.

Beyond the initial cost of getting the car, there are still many extra fees that you have to pay. This usually varies from one dealer to another, even within one state. Oregon has the lowest unexpected fees, and you’re unlikely to spend over $130 on these fees when buying a car. Other states with lower unexpected fees include New Hampshire and Alaska. In both of these states, the average unexpected fee is $360, which is low compared to what you find in several other states. Overall, the best state to buy a car in is New Hampshire. For used cars, the best state is Indiana.

Worst States to Buy a Car

California is one of the worst states to buy a car and has the highest initial cost for a car purchase. This is due to several factors. But when it comes to unexpected fees, Alabama is at the top of the list. It has the highest unexpected fees in the country, with car buyers paying an average of $2,313. Other states with unexpected high fees include Arizona, Colorado, Tennessee, and Florida. Alaska is the most expensive state for used cars due to the distance.

Factors Affecting the Price of Cars

The prices of cars and their overall costs usually vary by state due to some factors. But it’s important to note them. Most drivers, especially those who’ve lived in one location, don’t notice this when getting a car. Here are the factors to pay attention to:

1.      Demand for Vehicles

Florida has a  large population of older people who don’t drive as often. This means they start selling off their cars, giving anyone looking to buy a vehicle the chance to get a good and much cheaper deal. Interestingly, several older people in  Florida are wealthy as they have enough left to retire and enjoy their life. Wealthier people are more likely to sell their cars. By contrast, the demand for cars is higher in California. It has a young population which means more people need cars. Beyond that, most current car owners aren’t ready to part with their cars due to the high cost of living. The result is fierce competition for vehicles, making the initial cost very high. Used cars, usually the most affordable options, aren’t as common here compared to other states. Getting the car you want in California can be quite tasking. California when it comes to buying a used car.

2.      Lifespan of Cars

How long the car lasts will also influence the price because it reduces the frequency of having to change the car. Cars don’t have to deal with salted roads in a place like California because there’s little snow. Salt damage can affect cars significantly over a long period.

3.      Registration and Dealer Fees

You’ll have to pay several other costs once you acquire a car. There’s a transfer fee of $15 for a used car. It’s $21 for a new car. Car registration costs $58, and you also have to pay a California highway patrol fee, smog transfer fee, fingerprint ID fee, reflectorized license plate fee, crime deterrence program fee, and reflectorized license plate fee. There’s also a zero-emission parking sticker which costs $17, a documentation fee costing $80, and a vehicle license fee, which is 0.65% of the car value. The dealers also charge certain fees, which they must list. The smog transfer fee only applies when your car is at most four model years old.

4.      Taxes

The taxes on a car purchase can further increase the price. California has very high sales taxes, which makes the attached fees for car ownership even high. States without sales taxes, such as  Alaska, New Hampshire, Delaware, Oregon, and Montana, are also among the best places to buy a car in terms of low unexpected fees. The tax rate on used and new cars is 7.25%, but it increases after adding city and county taxes.

5.      Insurance Rates

Insurance Fees can also affect your cost of car ownership. In this regard, California is in the middle. Its insurance rates aren’t so high, but they’re not low either. Michigan has the highest car insurance rates, but Florida, New York, Louisiana, and Washington DC come close. Factors such as economic conditions, traffic congestion, legal requirements, and weather affect the overall cost of insurance. In California, traffic congestion is a significant issue, and its effects show in the cost of insurance. Suppose you want cheap insurance; Maine, New Hampshire, Virginia, Ohio, and Wisconsin are the best states. The average insurance premium in California is above $2,000 annually.

6.      Distance

The higher the cost of transporting the car, the more expensive it would be. This is what makes Alaska a costly place to buy used cars. Even though California isn’t as far, it’s not in the Midwest, making it less accessible than Indiana, Ohio, and Connecticut, where used cars are much cheaper.

In Conclusion

Cars in California are expensive, and owning one is complicated, too. There are several laws and requirements to be familiar with. Starting from when you start looking for which car to buy, you need to do your research. It’s not necessary to buy your car in the state.