The Benefits of Registering a Florida Car Out-of-State

For years, Florida has been the ultimate melting pot of cultures: you have your snowbirds and transplanted Yankees who find the climate more agreeable to a certain age. You have the Central and South American communities, some of whom are searching for a better break. Despite their apparent hard conservative lines, Florida has been a politically purple state for many moons.  

Those of us “seasoned” enough to remember back to the 2000 election can never forget the political theatre surrounding the “hanging chad.” Of course, it has always been a swing state, and it probably always will be. But one thing is for sure: it is a crowded, busy state! As with most of their fellow congested states, pollution is a hot-button topic, and cars are usually at the heart of it.

Yet when it comes to driving and registering your car in Florida, there are some pitfalls that often result in people choosing to register in other states. It might have to do with your car’s specific modifications, the repairs it needs, or even the money and time involved in registering in Florida.

But I have said too much already; let’s dig into why Florida is coming in hot for out-of-state car registration, then we’ll look at exactly how to do it! To fully understand the scale of what’s happening here, let’s establish some base facts.

The Demographics of Florida

This series of articles on the states searching for out-of-state registration options is purportedly about the hurdles of dealing with the state DMV and the fees and headaches associated with each state. But we all know that it is about much more than that. 

Florida Growth

Florida has long been a snowbird paradise, a veritable retirement community encompassed in an entire state. Since the year 2000, Florida has grown by nearly 6 million people. While natural growth by inclining birth rate may account for some of this, it is unlikely to account for almost 37% growth in just two decades. Blame that on snow.

Moreover, Florida has proven to be an open state, a commodity that bears repeating. There are no safe bets for business growth in a state that might lock you down at a moment's notice with no warning. Unfortunately, we are at a time where this is even a discussion, yet here we are. No matter what they say on their Insta feeds, people of all political persuasions are moving to Florida and Texas en masse. With this comes the unavoidable urban expansion, and in Florida especially, it is bound to get cramped. Florida is the third-largest state by population, but it is only the 22nd largest area. Driving becomes tumultuous, with around 21 million people cohabitating in a state smaller than North Dakota and a public transit system that doesn’t exactly make headlines very often. 

What is Causing People to Want to Register Out of State?

Why do so many people want to register cars out-of-state in a state that so many people are moving to? We know for a fact that their laws do not come close to touching the lunacy of California or New York. 

Could it be that it is just a statistical truth since more people in the state ask the question? Probably. In sheer numbers, there will be more disgruntled people out of a group of 21 million than a group of 800,000. But let’s dive deeper into the Florida vehicle registration process to see if any factors would make Floridians wish to register elsewhere. 

New to Florida? Here’s Your Initial Registration

New to the Sunshine State? Great! Florida welcomes you! Taking in refugees from cold/expensive states has been their claim to fame for many years. Of course, they will request that you go right ahead and head over to the DHSMV within 30 days of entering the state.

For the purpose of registering a vehicle, Florida defines residency as:

• Begin working in the state

• Register your children in Florida schools

• Establish a Florida residency through a rental agreement, lease, or purchase of a house or other residential real estate

The registration process in Florida includes changing over your title to a Florida title, which you must do at registration. 

Title Transfers in Florida

To register your car, you have to title it in Florida first. No big deal, especially if you own it outright. If you own it outright, all you need is an insurance card meeting the minimums for the state, VIN verification, and then, you guessed it, you get to pay up. This comes out to $77.25 for the out-of-state title transfer fee, $2.00 for the lien record fee, $225 for the new to Florida registration fee, and another $2.50. So, just to transfer your title over to Florida, you will owe $306.75. Ouch. 

VIN Inspections

Florida requires VIN inspections as part of the title and registration process to transfer a non-Florida title into the state. While this is all handled in-house, if you happen to be unsure about the history of your VIN, you will want to order a Dirt Legal VIN check before submitting Florida Form HSMV 82042. There is no worse way to find out that you have something going on with your VIN than by submitting the inspection and having the state discover it for you.

As a Resident, This Is What You Pay

If you are already a resident of Florida and are purchasing a new vehicle, or once you become a resident and go to buy a car, be prepared for it: the sales tax rate in Florida is 6%. 

So for the sake of this exercise, let's go back to our average-priced new car, which is currently $42,258 at the time of writing. In Florida, your tax assessment for this average-priced car is $2,535.48. Add onto this a batch of fees as follows:

• Initial registration fee: $225

• Depending on vehicle weight, private-use fees are $14.50, $22.50, or $32.50.

• License plate fee for a new issue: $28. 

Your average-priced vehicle initial registration adds up to $2,810.98 (for a car with weights between 2,500lbs and 3,499lbs).

Bigger Vehicles = Bigger Prices

But this is Florida. Lots of people are hauling 5th wheels and travel trailers, so let’s take a look at a rig for hauling these: a 2022 Dodge Ram 3500 Limited crew cab. The Ram is a sweet rig with its fantastic 6.7L Cummins turbo diesel. MSRP? $92,780. Yeah, that’s an actual number. 

The sales tax at 6% on this truck comes in at $5,566.80, plus add on those other fees, and you’re basically at a hundred grand. So maybe we are starting to get a feel for why Floridians are looking at out-of-state registration options. Let’s get even more in-depth.

What Are My Out-of-State Registration Options?

Here is some harsh truth: the higher the average price of new and used cars rises, the more your initial registration costs. It is that simple. 

South Dakota offers a stark contrast to Florida.

Used car registration costs have risen somewhere in the ballpark of 30-to-40 percent in recent years, with some estimates as high as 42 percent. The average price of a used car crossed the $25,000 threshold for the first time in early 2022 indicating a significant shift toward higher used car prices.

Putting this in translatable and relatable terms, let’s look at it this way: You live in Florida, and you need a used car. The car you are looking at lists at $25,500. Now, not even two short years ago, that car would have been anywhere from $14,790 (42%, or the highest end) to $18,100 (29% at the lowest)

At 6 percent sales tax, the receipt for that same car goes up from between $887.40 and $1,086 to a whopping $1,530 today. And rest assured, the State of Florida does not mind being the recipient of these increases in tax revenue. However, they are the only party coming out ahead in this relationship.

The South Dakota Option

But you do not have to sit there and keep taking it. You are getting fleeced by Florida, and you don’t have to keep shoveling them your hard-earned bucks. Trust me, there are around half a million new residents a year heading to the Sunshine State, so don’t feel too guilty about improving your situation. 

Tagging your car in South Dakota is the best hedge of defense you can apply to yourself to preserve what is yours: your money. Money is not just money; money is time. Money is effort. It takes no effort for Florida to tax you at 6 percent; it takes a lot of effort for you to cough up an additional $500-$700 on top of the 30-40 percent increases in purchase prices. 

We also recommend forming an LLC in conjunction with registering in South Dakota. Registering your vehicle under an LLC will offer additional luxuries for running out-of-state plates. Because the legal residence for the vehicle will be in New Mexico, the “10-day rule” in Florida no longer applies. There is no need to show Florida evidence of having paid the taxes and registration within ten days of purchasing the vehicle or bringing it to Florida. In fact, there is no need to move your plates to Florida at all.

South Dakota Vehicle Registration Cost Compared to Florida

South Dakota has a flat tax rate of 4% compared to Florida’s 6%. That might not sound too much different until you run the numbers.

Used cars

A car with a purchase price of $25,500 will run you $1,530 at six percent in Florida. But by registering in South Dakota at four percent, you will only owe $1,020. Right there, you have already paid for our registration service at the time of writing. Remember this $1,530 is only for the sales tax. Your total cost for registering a $25,500 used car in Florida is going to be $1,805.50 when you include the initial registration fee, private use fees, and license plate fees. So by registering in South Dakota, you just saved nearly $800.

New cars

That exercise was fun, so let’s run through a couple more! This time, we will look at the average price of a brand new car at the time of writing, which is $42,258. So, instead of the Florida registration total (including sales tax) of $2,810.98, registering this car in South Dakota will only cost $1,690.32 in sales tax. You just saved over a grand at the click of a button!

Big cars

Remember that Dodge Ram 3500, perfect for towing a big fifth-wheel trailer? It carries a hefty MSRP of $92,780, which, at six percent, carries a sales tax burden of $5,566.80. Once they calculate additional fees, your initial registration will cost $5,852.30. However, by choosing to register in South Dakota, your tax burden falls to a much more reasonable $3,711.20, with a total cost of $4,060.20. Congratulations, you just saved yourself $1,792.10!

Save Even More: The Montana Option

…and Montana might be ever more stark.

If you’re willing to go the LLC route, an even better option is the Dirt Legal Montana LLC Registration Service. Since Montana has zero sales tax for all vehicles under $150,000, it will end up being the most economical option by a mile. Taxes are still zero percent for autos over $150,000 but there is an annual fee of $825 assessed at annual registration for those high-dollar vehicles.

To register your vehicle (regardless of type) in Montana, you must first show proof of residence in Montana. The way we do that is by helping you obtain an asset-holding LLC in Montana that is sufficient proof by the state’s definition. 

That Dodge Ram 3500 mentioned above will have zero sales tax in raw numbers, so your overall savings by opting for our Montana LLC Registration Service easily pays for itself while saving you several thousand dollars. Also, the Montana LLC is the answer if you get pulled over and asked why (or how) you have a Montana license plate driving around in Florida. 

Out-of-State Car Registration Makes Sense! 

When you start running the numbers, you see why Floridians are asking how to register out of state; it makes a lot of sense. We understand that it may not help much with cheap cars with much smaller margins. But also remember this: no matter what the value is of the car you plan to register in Florida, you still have to pay $267.50, $275.50, or $285.50 depending on vehicle weight. These fixed fees alone are very close to our reasonably priced registration service, so the cost to register in Florida remains higher than registering your vehicle in South Dakota until it is a very inexpensive car.

And here is the kicker: right now, there are very few cheap cars to be had, with sub-$10,000 cars being in the shortest supply. 

No matter how you look at it, you will come out ahead by registering your car in South Dakota rather than Florida. South Dakota requires no inspections, including physical inspections, emissions, and VIN inspections. Almost anywhere along the sliding scale of fees, you will still benefit from the two percent reduction in sales tax fees. Registering out-of-state with a South Dakota Registration from Dirt Legal is easy, so don’t hesitate. Contact us today and we will get you set up and save you some serious cash!