In most cases, buying used goods is a simple transaction, but buying a used car from a dealer or a private party requires you to make sure all paperwork is in order. While you’ll need much less paperwork than when applying for a mortgage, a checklist of documents necessary to transfer ownership of a car can help smooth the buying process for both parties.
The most important document to transfer during the sale of a used car is its title, the document that officially registers vehicle ownership with your state or county. Sellers should provide a copy of the title (most states’ departments of motor vehicles will provide replacement titles for a small fee) and sign the title over to the new owner to transfer ownership. Because mechanics may attach liens for unpaid bills to a car’s title, make sure it’s “clean,” and won’t transfer the previous owner’s debts that must be repaid by the new owner.
Bill of Sale
While each state’s laws about private party used car sales vary, all states require sellers to provide a bill of sale that documents the purchase. While formats vary, most states require buyers to have a bill of sale that provides the date of the sale, the odometer reading and the make, vehicle identification number and model of the car. These documents are usually informal, but in Louisiana, New Hampshire, Maryland, Nebraska and West Virginia, you’ll need to sign them in the presence of a notary.
Although each state’s laws about vehicle identification number verification vary, many states require verification that the VIN listed on the title matches your automobile’s VIN. In many states, you’ll only need to purchase a VIN verification if you purchase a vehicle from out of state. State law determines who is authorized to perform a VIN verification, and, depending on where you live, you may need a verification performed by law enforcement, DMV personnel or a licensed third party.
Your state’s department of motor vehicles may have additional requirements that must be fulfilled before it will license a newly purchased used car. For example, sellers in Colorado and California are required to provide a new emissions test or new smog certificate. Sellers in Washington and New York must also provide an odometer disclosure statement as part of the sale. If your state transfers registration of vehicles when they’re sold, sellers typically must provide current registration documents as part of the sale.
- Cars Direct: Buying a Used Car - Paperwork You Will Need
- Colorado Department of Revenue: VIN Verifications
- DMV.org: Paperwork When Selling a Car in Washington
- DMV.org: Paperwork When Selling a Car in Colorado
- DMV.org: Paperwork When Selling a Car in New York
- California Department of Motor Vehicles: How to Change Vehicle Ownership
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