Home Rental Cars Why So Many Rental Cars Have Out of State License Plates

Why So Many Rental Cars Have Out of State License Plates

by SharonKurheg

Have you ever rented a car in Texas and the license plate is registered in Utah? Or Oklahoma? Or you rent a car in a New York and the plate is from Illinois?

So what’s up with that?

Frankly, I was always curious about that. I’d rent a car in one state and the car’s license plates would be from somewhere else – always doomed to look like a tourist, LOL!

As it turns out there are a few things at play:

One-way rentals

The easiest explanation is one-way rentals. Say you live in California and want to drive part of Route 66 for your summer vacation. But you only want to drive it in one direction, only up to Missouri, and then fly home. Once you get to Missouri, the car dealership will have a car with (let’s say) California plates on it. It would cost a fortune to ship the car back to California, so they just start renting the car where it is. Eventually, it may make its way back to California. Or not.

The semi-annual rental car migration

This goes up there with one-way rentals. Things are obviously different since COVID, but for years, states such as Arizona and Florida have needed more cars during the winter months, since they become vacation and snowbird destinations while the rest of the country (and Canada) is freezing.

To get enough vehicles to those locations (and out of places where they’re not really needed in the winter), car rental companies offer “deals” to bring bunches of them south in the fall and back north in the spring (the deals used to be AMAZING. They’re not so hot anymore). This “migration” would mean that cars from all different states would be in other states.

It’s cheaper to register a car in some states than in others

Based on the prices on this page (which is current as of 2020), you can get an idea of the prices for registration fees, license plate fees, title fees, etc. for passenger vehicles.

As an example, all of those for a new car costs $120 + $5  + $25 ($150 total) in Connecticut, but if it’s a sub-compact car, it would only cost $26 + $25+ $50 ($101) in New York. That’s only a $40 difference. But multiply that by 1000 cars and you’re talking about a savings of about $50,000 when buying new cars for your area’s dealerships. So…more cars are registered in, in this case, New York than Connecticut.

And now you know 🙂

Feature Photo: Joe Shlabotnik / flickr

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This post first appeared on Your Mileage May Vary

2 comments

sanikaps March 29, 2021 - 10:52 pm

customers with one way rentals can drive the car drive the car to a different state.that car ends up in the motor pool of the drop off location untill they find a customer to drive it back , or they pay someone to transport it back.

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stogieguy7 March 30, 2021 - 12:29 pm

This has become much more of a thing now than it was 30 years or more ago. Back then, you usually got a car registered in the state where you rented it (there were still exceptions but they were exceptions). Now, your odds of renting a car registered in the state where you rented it are less than 50-50. So that has definitely changed over the years. And I don’t think that revenue officials from most state motor vehicle departments are looking at this anymore, which is something that I’m pretty sure they used to do.

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