What State Is Best to Buy A Car: Indiana Or Texas?

6 minutes read

When considering which state is better to buy a car, it ultimately depends on various factors and personal preferences. Here is some information about Indiana and Texas to help you make an informed decision:


  1. Sales Tax: The state sales tax rate in Indiana is 7%. However, additional county taxes may apply, ranging from 0.25% to 1.5%, making the total sales tax rate slightly higher.
  2. Vehicle Registration: Indiana requires new residents to register their vehicles within 60 days. The registration fee is based on the vehicle's age and weight.
  3. Lemon Law: Indiana has a lemon law that protects consumers against purchasing defective vehicles. It allows for replacement or refund if the vehicle has substantial defects that were not repaired within a reasonable number of attempts.
  4. Dealership Markup: Indiana does not have a cap on dealership markup, meaning dealerships have more flexibility in pricing the vehicles.


  1. Sales Tax: The state sales tax rate in Texas is 6.25%. However, additional local taxes may apply, making the total sales tax rate vary from 6.25% to 8.25%.
  2. Vehicle Registration: Texas requires new residents to register their vehicles within 30 days. The registration fee is based on the vehicle's weight, along with additional fees for titling, license plates, and other services.
  3. Lemon Law: Texas has a lemon law that offers protection to consumers who purchase faulty vehicles. It allows the manufacturer a reasonable number of attempts to repair the vehicle before offering a replacement or refund.
  4. Dealership Markup: Texas does not have a cap on dealership markup, meaning that dealerships can set their prices based on market demand.

These are just a few key points to consider when deciding where to buy a car. Other factors such as availability, selection, proximity to dealerships, and additional fees or incentives in each state should also be taken into account when making your decision.

What is the process of buying a car in Indiana?

The process of buying a car in Indiana typically involves the following steps:

  1. Research: Begin by researching the make, model, and features of the car you are interested in. Consider your needs, budget, and preferences. You can explore various car websites, dealerships, and consumer reviews for information.
  2. Financing: Determine how you plan to finance your car purchase. You can either pay in cash, use financing from a bank or credit union, or arrange financing through the dealership. If financing through a lender, it is advised to get pre-approved for a loan before visiting the dealership.
  3. Budgeting: Set a budget for your car purchase, taking into account not only the cost of the car but also taxes, registration fees, insurance, and ongoing costs such as fuel, maintenance, and insurance premiums.
  4. Visiting Dealerships: Visit different dealerships to test drive cars and compare prices. It's recommended to visit multiple dealerships to ensure you are getting the best deal and the car that suits your needs.
  5. Negotiation: Negotiate the price with the dealership. Research the fair market value of the car you are interested in to have a better idea of a reasonable price range. Be prepared to negotiate on price, financing terms, and any additional add-ons.
  6. Vehicle History Check: Request a vehicle history report using the car's Vehicle Identification Number (VIN). This report helps you understand the car's past, including any accidents, repairs, or title issues.
  7. Documentation: Once you have agreed on a price with the dealership, ensure all the necessary paperwork is in order. This typically includes the purchase agreement, vehicle title, bill of sale, and any financing or leasing documentation.
  8. Registration and Title: After purchasing the car, you need to register it with the Indiana Bureau of Motor Vehicles (BMV) within 45 days. You will need to provide necessary documents, including proof of ownership, identification, and payment of registration fees and taxes. The BMV will issue a new title and registration.
  9. Insurance: Indiana law requires you to have auto insurance before driving your new car. Contact an insurance provider to obtain the appropriate coverage for your vehicle.
  10. Drive Away: Once you have completed all the necessary paperwork, registered the vehicle, and obtained insurance, you are ready to drive your new car in Indiana.

It is always recommended to review Indiana's driving and vehicle laws, as well as consulting with local dealerships and the Indiana BMV for any additional requirements or specific guidelines that may apply.

How to trade in a car in Indiana?

To trade in a car in Indiana, follow these steps:

  1. Appraise Your Current Car: Before heading to a dealership, get an accurate estimate of your car's value by researching online or using a reputable pricing guide.
  2. Research Dealerships: Research different dealerships in your area and compare their trade-in offers. Look for dealerships that specialize in the make of your current car.
  3. Visit Dealerships: Visit the dealerships that offer the best trade-in deals and bring your car along with all related documents such as the title, registration, and loan documents if applicable.
  4. Get Trade-In Offers: Provide the dealer with all the necessary information about your car, including its condition, mileage, and any recent repairs or enhancements. The dealer will then appraise your car and provide you with a trade-in offer.
  5. Negotiate: If you are satisfied with the trade-in offer, you can proceed to negotiate the terms of the new car you plan to purchase, including the trade-in value and the price of the new vehicle.
  6. Complete Required Paperwork: Once you have reached an agreement, the dealer will handle the paperwork for you. They will transfer the title to the dealership and complete all necessary documentation for the trade-in.
  7. Apply Trade-In Value: The trade-in value of your old car will be applied as a credit toward the purchase price of your new vehicle. This will lower the amount you need to finance or pay upfront.
  8. Transfer Ownership: Before leaving the dealership, ensure that you have transferred the ownership of your old car to the dealership. Cancel the registration and insurance for the traded-in vehicle.
  9. Notify Insurance and DMV: Inform your insurance company that you have traded in your old car and provide them with the details of your new vehicle. Also, notify the Indiana Bureau of Motor Vehicles (BMV) of the trade-in.

Note: It is recommended to read the Indiana BMV guidelines and consult with the dealership to ensure compliance with any specific requirements or procedures.

How much does it cost to register a car in Indiana?

The cost of registering a car in Indiana can vary depending on several factors such as the type of vehicle, its weight, and the desired duration of the registration. As of 2021, here are some general registration fees in Indiana:

  • Passenger vehicle registration: $21.35 to $36
  • Motorcycle registration: $17.70 to $43.70
  • Truck registration: Varies based on weight and usage (commercial, farm, recreational, etc.)
  • Trailer registration: Varies based on weight and usage

Additionally, there might be additional fees for specialized plates, county taxes, excise taxes, and other related charges. It's recommended to check with the Indiana Bureau of Motor Vehicles (BMV) or visit their official website for the most up-to-date and accurate information regarding registration fees.

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