Where Can You Find the Cheapest Used Cars? These 10 States Offer the Best Deals

When shopping for a vehicle, location matters far more than many buyers realize. With new car prices hovering around $48,000 in 2023, the state where you make your purchase can ultimately save or cost you thousands of dollars. Your total out-of-pocket expense depends on multiple factors including sales tax rates, vehicle pricing in that region, and what dealerships charge in fees.

The Math Behind State-by-State Savings

Three key variables determine your final purchase price: how much the actual vehicle costs in that state compared to national averages, what percentage sales tax you’ll pay, and the dealer fees added to your transaction. Some states have virtually eliminated one cost entirely—particularly sales tax—while others keep fees remarkably low. These advantages can compound, making the difference between an expensive and affordable purchase surprisingly dramatic.

Budget-Friendly States for Finding Affordable Used Cars

Oregon Leads the Way

Oregon sits at the top of affordability rankings, primarily due to having zero sales tax on vehicle purchases. Used cars averaged $28,218 in August 2023, while dealer fees remained among the nation’s lowest at just $353. New vehicles ran $51,299 with similar minimal fees.

Montana’s Unexpected Advantage

Despite new car prices reaching $56,186 (over 15% above the national average), Montana remains highly affordable. The no-sales-tax policy combined with exceptionally low dealer fees ($537) creates substantial savings for buyers despite higher base vehicle costs.

New Hampshire Combines Low Prices and Zero Tax

This state achieves affordability through multiple channels. Used cars averaged $25,263—more than 5% below national rates—while sales tax sits at zero. Dealer fees of $1,372 round out an attractive overall package.

Delaware’s Tax-Free Advantage

As one of four states without sales tax on vehicle purchases, Delaware positions itself competitively. Used car prices averaged $26,129 with dealer fees around $2,486 for both new and used vehicles in August 2023.

Alaska’s Fee Strategy

Though vehicle prices here exceed national averages by over 20% (used cars at $32,111), Alaska compensates with the lowest dealer fees in America—just $315. This unusual combination allows the state to rank among the most affordable options overall.

Mid-Range Affordable Options

Hawaii’s Surprising Pricing

Contrary to expectations about island living costs, Hawaii actually offers used cars roughly 3.58% below the national average at $25,698. Combined with a 4.44% sales tax and reasonable dealer fees, the state provides solid value.

Virginia’s Balanced Approach

This state maintains car prices nearly at national levels (just 0.42% above average), moderate sales taxes at 5.77%, and dealer fees below typical rates. Used vehicles averaged $26,764 during the study period.

Wisconsin’s Competitive Market

Used cars in Wisconsin averaged $26,997 with the most favorable sales tax rate (5.43%) among the top 10. Though dealer fees reach $2,069—the highest in this group—overall costs remain reasonable.

New Mexico’s Value Proposition

Despite having the 16th-highest sales tax rate nationally at 7.61%, New Mexico still qualifies as affordable. Used car prices of $27,926 paired with lower-than-average dealer fees ($1,230) offset the higher tax burden.

North Carolina Rounds Out the Top 10

Completing the list, North Carolina shows used cars at $27,558 with moderate dealer fees of $1,623. The 7.00% sales tax represents the higher end of this spectrum, yet the state remains competitive due to reasonable vehicle pricing.

Key Takeaways for Smart Shoppers

The data reveals that states without sales tax—Oregon, Montana, New Hampshire, and Delaware—dominate affordability rankings. However, dealer fees and regional vehicle pricing also play crucial roles. Even states with higher sales taxes can compete if they maintain lower base prices or minimal dealer charges.

When searching for the cheapest used cars, consider not just the sticker price but also the complete cost picture including all fees and taxes. A vehicle that appears expensive in one state might ultimately cost less than the same model purchased just across the border.