It is legal to purchase a police car with decals and equipment included according to USA Today. However it is illegal to drive that vehicle on public motorway if there is a reasonable chance a member of the public might mistake the driver for a police officer.
The criminal statute applicable in this scenario is known as "false identification." There is no easily identifiable point at which the attributes of a former police vehicle will result in a false identification charge. Some factors that may contribute to being charged can include not removing department decals, sirens, lights, or other elements which may confuse a member of the public.