One of the best feelings you can have is driving your new car out of the dealership for the first time. A new car gives you a sense of accomplishment and pride.
Whether or not you got a great deal from the dealership or a private seller, the car gives you a sense of freedom. Most dealerships know this and that is why it is so important for you to know what you’ll be getting from a new car sale.
Apart from the actual car sale itself, you should be prepared to sign other documents related to the car. Documents range from the bill of sale all the way to manuals for the car.
It is also noteworthy to mention that certain states have different documents by law that you should get. Not all states have them, but the extra documents decrease the risk for the buyer.
With that said, in this article, we’ll be delving into what documents come with new cars. This is important for new car owners and those looking to go into a dealership soon.
Let’s get straight into it.
Table of Contents
Bill of Sale Document
A bill of sale is a contract between the seller and the buyer to finalize the sale of a property. This document can also serve as proof of payment and that the sale is successfully completed.
In most states, the bill of sale document will need to be signed by both the seller and the buyer. The buyer can then keep the original document and the dealer will need to make a copy.
In most cases, this document will be one of the last to be given over to the new owner of the property. It is important that the buyer read over and review this document carefully before signing it.
The bill of sale stipulates the terms of the sale and serves as proof of the sale over to the buyer.
Much like a receipt you get from a store, a bill of sale is a contract between two parties. It shows that you have now purchased the car from the dealer or the owner of the vehicle or property.
It is the responsibility of the seller to provide this document, and it frees the seller from liability. Upon carefully reviewing this document, the buyer can then sign it to take possession of the car.
When the contract is signed, the car now officially and legally belongs to the buyer. It is now the responsibility of the owner to make sure the car is insured and maintained.
From this point on, the dealer can help the buyer with other documentation if the buyer is not able to. This is usually what the dealer does for free if it is not included in the contract of sale.
The bill of sale will also include and list of the extra fees attached to the vehicle and the sale. This is usually just tax fees, and any extras added to the car.
Third-party checks and repairs and tests on the car will usually be listed in this document. It ensures that both the buyer and seller know what the terms and costs for the car are.
Certificate of Title Document
A title document comes after the bill of sale document. These two documents are similarly important for both the buyer and the seller.
A title proves and certifies the buyer as the owner of the new car. The title is legally binding and is much like a certificate of ownership of the car.
The difference between a title and a bill of sale is that you need the bill of sale to get the title for the car.
After the bill of sale has been signed and finalized, the title should be registered within ten days. In most states, the ten-day period is more than enough to obtain the certificate of title.
The certificate of title is important because it shows that you are the legal owner of the vehicle. Whereas the bill of sale shows that you have purchased the vehicle.
For example, if someone just graduated, and their parent wants to buy them a car. The parents will sign the bill of purchase, but the certificate of title will list the owner of the car and not the parents.
The certificate of title document will also list the details of the car in it. This includes the make and model of the car, and the vehicle identification number (VIN).
Information Included in the Certificate of Title
- Owner’s Name
- Vehicle Identification Number (VIN)
- Weight Class
- Odometer Reading
- Date of Sale
- Buyer and Seller’s Signatures
You will have to register the car to get the certificate of title. The amount varies from state to state, but you can expect to pay between $10 to $200.
Odometer Mileage Disclosure Statement
If you’ll be buying a car brand new, you can pretty much trust that the mileage reading is low. This is because the car hasn’t been used or driven a lot.
In instances where the car is used, you’ll have to have an odometer reading done on the vehicle. This is to ensure that the odometer reading is accurate and that the dealer did not tamper with it.
An odometer mileage disclosure form helps the buyer determine how much mileage the car has on it. It should stipulate the mileage and also if the car has undergone any accidents or major repairs.
It is against the law to tamper with odometer readings on any car. This is where the odometer mileage form comes into play, to protect against shady transactions.
It ensures that the odometer readings on the car are accurate and not tampered with. The form is legally binding for the seller or dealership.
To go the extra mile on checking the odometer accuracy, buyers also go for a vehicle history report. This report will have detailed information about the car, further improving the mileage of the vehicle from its history.
Temporary Registration and Tags
When you buy a new vehicle, it is likely that it will not have number plates or tags appointed to it. This is where the dealership can provide you with temporary number plates.
A vehicle needs number plates to be driven on public roads. Sometimes, registration of the car takes a little longer than expected and number plates are needed.
In some states, the dealership can issue temporary tags while you wait for the permanent plates. With this route, you’ll most likely not need to deal with the registration yourself.
It’s not always the case that new cars are the only ones that might need a new set of registration tags. Other cases included when you’ve moved to another state, or when you’re importing a vehicle.
In all these cases, you will have to pay for the registration to get new tags. The issuing of temporary tags varies in amount from state to state.
Regarding the registration fee, the amount can vary according to state and the class of vehicle you drive. The registration tags can be acquired from your closest DMV or other location.
It is important to inspect the temporary tags in order to avoid fake plates. To save time, some dealerships are known to print out unofficial tags and write in the number plates.
Fake number plates are illegal and can get you into real trouble. Real temporary tags are simple to obtain in different states.
Lien Release Document
It’s no secret that not everyone has the money to pay for a new car upfront and in full. This is where vehicle loans come into play to help car buyers.
A vehicle lien document will most likely be in the possession of the auto loan provider. The auto loan provider will also have the certificate of title in their possession.
The lien document states that the car will be yours as soon as the loan is completely paid off. Until then, the lien document remains with the loan provider and gives them the power to repossess the car.
With that said, the loan provider is the legal owner of the car until it is paid off. Upon paying off the remaining amount on the car, the document can then be released to the new owner.
If the lien holder happens to be the dealer, they’ll have to register for a lien document transfer. The lien document transfer
is then sent to the state transportation agency to indicate a transfer of ownership.
It is important to know who is the lien holder on the car after you have taken possession of it. In the case of an auto loan, make sure that the transfer is completed.
When the loan amount is paid in full, a transfer of lien statement must be given to you as the new owner of the car.
A lien release document is also a safety net for the auto loan provider. In case of non-payment, the loan provider has the right to repossess the vehicle.
The loan documents will likely stipulate what the terms are for the contract. This includes any other requirements, such as insurance and liabilities, in the case of a crash.
Lemon Law Rights Statement
The lemon law protects car buyers who end up buying a defective car, known as a lemon. These are cars that are known to be defective and have substantial and numerous repairs done.
Lemon laws differ in different states, but most lemon laws now cover new car purchases. It is important to check your state’s lemon law before purchasing a vehicle.
If the car cannot be safely driven because of a defect, it’s probably a lemon.
The car is not reliable if it is regarded as a lemon under the lemon law in most states.
Another stipulation of the lemon law is if the car remains unfixed after multiple attempts. This can include safety defects, such as brake failure or steering failure.
Safety defects are taken seriously because the car is not safe to drive on the road and, as such, is regarded as a lemon.
Other defects might have to do with minor vehicle components and take longer for the car to be regarded as a lemon. With that said, a car that spends 30 days or more at a mechanic for a defect is also a lemon.
If you find yourself with a lemon, it is best to go over your state’s lemon laws. This helps you know whether your car qualifies as a lemon and what steps are next.
You have options for a full refund or replacement if you meet the criteria for lemon in your state. It is required to notify your dealership of the defect before going to court or arbitration.
Lemon law arbitration can be quite tricky if you’re not prepared. It is useful to provide all documentation and records when considering lemon law arbitration.
It can be quite frustrating if you have a lemon in your hands and have tried multiple times to resolve it.
The Better Business Bureau (BBB) is of great help to people who have lemons and don’t know what steps to take. The “BBB Auto Line” will guide you every step of the way and you have the option to go for arbitration at any point.