The Best States to Buy And Operate a Car in 2024

It pays to be able to drive in the snow. 2024 is an expensive time for drivers. Insurance costs are rising rapidly in much of the country and gas prices are just coming down from a summer peak. At the same time, the price of used cars is starting to fall from their pandemic highs. In these complicated times, which states are offering drivers the best deal?

NationalBusinessCapital.com’s inaugural report, The Best States To Buy And Operate A Car, found that buying and operating a car in the Northeast and Midwest is often cheaper than in the West. While the differences in overall costs between states are fairly narrow, these regions tended to come out slightly ahead thanks to generally lower used car prices, limits on supplemental fees on new cars, and lack of personal property taxes on vehicles. While you probably aren’t going to move just to buy a car, understanding what motor vehicle-related behaviors your state rewards and punishes can help you get the most mileage out of your wallet.

In this environment, states like Vermont and Ohio, with their lower-priced used cars, lack of personal property taxes, and low insurance costs, offer more predictable and generally lower costs than states like Washington or Oregon. While the South tends to enjoy lower gas prices, ad valorem/personal property taxes can add substantial annual costs to owners of new cars and cars that don’t depreciate quickly in value.

Key Findings

• Western States Tend To Be The Most Expensive To Buy And Operate A Car: Car-dependent Western States, many of which have priced environmental priorities into their motor vehicle policies, tend to have higher costs than other regions. Drivers here often pay a premium on used cars, registration fees, and gas.
• Used Cars Tend To Be Cheaper In The Northeast and Midwest: The Northeast and Upper Midwest tend to enjoy slightly lower costs than other regions. While drivers may pay more in gas here in these regions, lower used car prices, lower dealer documentation fees, and a lack of personal property taxes offset the costs. Contributing factors to lower car prices include proximity to distribution points, higher population density, and the availability of competing modes of transportation. Weathering may also contribute to vehicle depreciation.
• Buying Experiences In Each State May Vary Depending On The Vehicle: Car registration fees and practices between states vary significantly, rewarding some types of vehicle ownership over others. For example, states with more aggressive environmental policies may charge additional fees for engine cylinders or levy higher taxes on gas. They may also require emission inspections. States more concerned with wear and tear on their roads may charge additional registration fees on electric or hybrid vehicles. Meanwhile, many states, particularly in the South, charge a personal property tax (or similar value-derived tax) on vehicles, which imposes higher costs on newer and more valuable vehicles.
• Cost Of New Cars Vary – Hinging A State’s Supplemental Taxes And Fees: MSRP prices on new cars are generally consistent between states. However, state policies do affect the retail cost of new vehicles. Caps on supplemental fees that can be charged by the dealer, sales tax, and personal property taxes can account for thousands of dollars in cost.

TOP 10 STATES TO BUY AND OPERATE A CAR (2024)

1. Vermont

Score (out of 100): 81.3

Cars are critical for getting around the small but very rural state of Vermont. Luckily, Vermonters face some of the most affordable car ownership burdens in the nation.

Used cars were cheaper in Vermont in 2022 than any other state, with an average price tag of $31,445. Those seeking new cars will encounter relatively low dealer document fees (10th) and sales taxes (8th). Insurance rates were also lower, with minimal coverage averaging under $400 (3rd). Before you head for the Green Mountains, however, be prepared to pay slightly higher than median gas prices (29th) and registration fees (30th).

2. Ohio

Score: 73.5

The Buckeye State is a great place to buy a used car, with the third-lowest average sales price of $32,267 in 2022. Dealer document fees were lower in Ohio than in most states, coming in at around $250 (12th). In both cases, Ohioans will generally face a lower-than-median sales tax burden for their purchase (20th).

Drivers who put a lot of miles on their cars may not realize quite as much savings in Ohio, however, as gas prices are on the high side of average (30th).

3. Minnesota

Score: 69.2

The North Star State is one of the most efficient at cutting down on the “miscellaneous” costs of car ownership, with low dealer document fees (2nd), registration fees (2nd), and no personal property tax (1st, tied).

So what’s keeping Minnesota from taking the silver or gold medal? High sales taxes (34th) will add some upfront costs, as will relatively high insurance premiums (31st).

4. Delaware

Score: 67.8

When it comes to minimizing the upfront cost of buying a used car, you can’t do too much better than Delaware. Used cars were relatively cheap in 2022 at $32,924 (6th) with no sales tax to worry about (1st, tied). While the picture isn’t quite as rosy when it comes to new cars, thanks to relatively high deal document fees ($475 average, 34th), you should come out ahead on the retail price.

The main financial burden car owners in the Constitution State face comes from insurance, which can easily run north of $1,000 each year (45th).

5. Pennsylvania

Score: 65.9

Breathing down Delaware’s neck is another Northeastern state. A typical used car averaged around $33,097 in Pennsylvania (9th) with a modest sales tax burden of around 6% (8th, tied). However, where Delaware saves on retail costs, Pennsylvania saves on car insurance ($480, 11th, tied).

However, car ownership in the Keystone State does come with some additional costs. Gas prices are higher here than most of the country (39th), and you’ll pay a bit more to keep your car registered than most states on average (37th).

6. Indiana

Score: 63.9

Hoosiers will find that buying a new ($199 dealer fees, 8th) or used car ($32,936, 7th) is relatively cheap. If that’s not enough, insurance costs tend to be low here ($480, 11th tied) if you’re content with minimal coverage.

While Indiana doesn’t technically have a personal property tax (34th) on cars, it does levy an excise tax based on the age and value of the vehicle, which will hit new car owners the hardest.

7. Wisconsin

Score: 63.7

Insurance rates can vary greatly from state to state. Wisconsinites enjoy some of the lower rates for liability coverage in the U.S. ($432, 7th). Cars themselves are relatively cheap as well, with low dealer doc fees ($299, 16th) and below-average used car prices ($34,018, 20th). At an average of 6%, sales tax shouldn’t break the bank either (8th, tied).

Costs can start to add up in the Badger State, with the price of gas (35th) and high registration fees (46th).

8. Texas

Score: 63.6

One of two Southern states to make the top 10, the Lone Star State’s lack of ad valorem taxes puts it over most of the region, as do its low gas prices (3rd).

Texas is a good place to buy a new car, with some of the lowest dealer documentation fees ($150, 4th) in the nation, though used car seekers may have trouble finding a competitive deal ($35,061, 31st). Relatively high sales taxes will add some upfront cost to your purchase either way (8%, 34th).

9. New Hampshire

Score: 63.2

The Granite State may be one of the best places in the country to buy a used car. With no sales tax (1st, tied) and an average price of $31,833 (2nd), New Hampshirites can save a lot of money on retail costs. New car purchases will face average dealer documentation fees ($375, 24th).

Of course, there’s no such thing as a free lunch when it comes to operating a motor vehicle. New Hampshire charges car owners an excise tax (40th). Registration fees (31st) and insurance costs (29th) costs are also higher than average.

10. Mississippi

Score: 61.7

Coming in at No. 10 is Mississippi, largely on the basis of its lowest-in-the-nation gas prices (approx. $2.95 on Aug. 24) and low registration fees (3rd). Used cars are also slightly cheaper than average (21st), as is minimal liability coverage ($540, 17th).

While operating costs are pretty low in the Magnolia State, high ad valorem taxes (50th) can cut into the budgets of those owning newer and more valuable cars.

BOTTOM 10 WORST STATES TO BUY AND OPERATE A CAR (2024)

40. Montana

Score: 43.8 (out of 50), tied

Sprawling Montana is more car-dependent than car-friendly, with high used car prices ($38,943, 48th), gas prices (37th), and registration fees (40th).

40. Oregon

Score: 43.8, tied

High insurance costs ($948, 43rd), gas prices (45th), and used car prices (38th) make operating a vehicle in Oregon an expensive prospect.

42. Connecticut

Score: 43.0

Connecticut has both the higher costs typical of the Northeast–gas prices (36th) and insurance (44th), as well as the personal property taxes (45th) and dealer doc fees (44th), which are common in many other regions.

43. Arizona

Score: 41.7

High sales tax (8%, 34th) and dealer doc fees (36th) make purchasing a car in the Grand Canyon fairly expensive, while high insurance costs (37th) and personal property taxes (38th) create a longer-term burden for Arizonians.

44. Florida

Score: 38.6

Florida’s all but unregulated market means the sky’s the limit for dealer documentation fees ($999, 50th), and its insurance issues aren’t limited to housing (47th).

45. Louisiana

Score: 38.5

Louisiana’s low gas prices (2nd) can’t offset the high price of used cars (41st), high sales tax (10%, 49th tied), and high insurance costs (39th). Ad valorem taxes (27th) add some additional burdens.

46. Washington

Score: 37.5

Filling up your tank in Washington is painful (48th) if the combination of high used car prices (43rd) and sales taxes (9%, 41st, tied) don’t have you looking at bus schedules in the first place.

47. Illinois

Score: 34.9

Nothing about car ownership is particularly cheap in Illinois, including registration fees (47th), used car prices (34th), gas prices (47th), and insurance (33rd).

48. Colorado

Score: 34.2

Acquiring a car in Colorado is an expensive prospect thanks to high dealer fees ($699, 47th), used car prices (35th), and sales taxes (34th, tied). High insurance premiums (33rd) and an ownership tax (40th) add recurring costs.

49. California

Score: 32.6

California caps dealer documentation fees ($85, 1st), but it won’t offset the state’s high sales tax (41st), gas prices (49th), or registration fees (45th). Finding a competitively priced used car may also be challenging (40th).

50. Nevada

Score: 30.1

Surprisingly high insurance costs ($1,164, 48th), gas prices (46th), and a “Governmental Services Tax” that stands in for a personal property tax (36th) all help sink Nevada to the bottom of our list.

COMPLETE RANKING OF ALL 50 STATES (2024)

Methodology

To create our rankings, we selected seven metrics to evaluate the typical costs of buying a car within the state. For each metric, the state was given a rank. Each metric was multiplied by a selected weight and then normalized and aggregated to get a score out of 100. The best-performing states have a higher score than lower-performing ones.

Some cautions with this data. While we tried to model a typical buying experience, auto fees are highly variable in each state depending on the type of vehicle being registered, the locality in which it’s purchased, whether the engine is gas or electric, etc.

The seven metrics we chose were:

• Dealer Document Fees (10%): While the ticket price on any given model of a new car tends to be the same from state to state, supplemental fees charged by dealers at the time of sale do vary. Some states cap these fees while others do not. Data was sourced from CarEdge.
• Average Used Car Price (26%): This metric represents the average price of used cars sold within the state in 2022. Data was sourced from ISeeCars.
• Average Gas Price (15%): This metric represents the average cost of a gallon of regular gas within the state, 8/5/24. Data was sourced from AAA.
• Sales Tax (12%): This metric represents average sales taxes within the state. Data is sourced from the Tax Foundation.
• Registration Fees (10%): This metric includes typical registration costs for a gas-engine, four-cylinder passenger vehicle within the state, including registration fees, inspection fees, weight fees, road fees, etc. It does not include MSRP-derived fees such as personal property taxes or ad valorem taxes. Data was sourced from respective state motor vehicle departments.
• Insurance Costs (15%): This metric is the typical annual cost of a liability-only auto insurance policy within the state. Data was sourced from Statista.
• Personal Property Taxes (12%): This metric includes MSRP-derived, recurring personal property, ad valorem, or excise taxes many states charge per car owned. Data was sourced from respective state motor vehicle departments.