The Cost of Buying a Car in Hawaii vs. California

The cost of buying a car in Hawaii compared to California can significantly vary due to various factors, including vehicle prices, taxes, registration fees, and the overall cost of living in each state. Here’s a detailed breakdown of the key differences to help you make an informed decision.

Vehicle Prices

In Hawaii, car prices can be notably higher. This is largely due to shipping costs and a limited supply of vehicles. With a smaller market and high demand, both new and used vehicles tend to be more expensive. Conversely, in California, there is a larger inventory of cars, which often results in more competitive pricing. While top-tier vehicles might still carry a hefty price tag, the variety available means buyers can usually find better deals.

Taxes and Fees

Sales Tax:

Hawaii: The general excise tax (GET) is around 4-4.5%, but it can vary by county. California: Sales tax ranges from 7.25% to over 10%. This can significantly vary depending on the city and county.

Registration Fees:

Hawaii: These can vary but are generally lower than in California. California: Registration fees can be higher, especially with additional fees based on the vehicle's value and weight.

Insurance Costs

Insurance rates also differ, with California often having higher premiums. This is due to factors such as traffic density, accident rates, and other local conditions. It's important to factor these costs into your overall budget for vehicle ownership.

Overall Cost of Living

Hawaii has a higher overall cost of living. This indirectly impacts car prices and related expenses like insurance and maintenance. The higher operational costs can make vehicles more expensive to own and operate.

Summary

Generally, buying a car in Hawaii tends to be more expensive than in California. The higher shipping costs, smaller supply, and potentially higher taxes and fees all contribute to this. However, specific costs can vary widely depending on the type of vehicle and local market conditions. If you’re considering a specific vehicle, it's a good idea to compare prices directly in both states.

For instance, during my time in Hawaii, a lot of service members bought extra used cars, especially from other members leaving Hawaii. They would rent them to newly arriving members. It often took a considerable amount of time for a shipped car to arrive—it took over three months for my car to be delivered through the Navy facility in Oakland. Shipping a car from the East Coast or through New Orleans could have taken even longer.