Are you wondering what documents you need to get when buying a used car? Or you have a little, but it isn’t enough.
In this article, we will discuss the 8 important documents you must get when getting a used car.
Used cars are the cars consumers go for to cut costs. The cost of purchase and maintenance is significantly lower than new cars on average.
You have found a used car you like. You have verified all its body parts are in good health and it’s your best choice. Paying for it will be your next step.
However, you need to ensure you get these 8 documents when you are buying your used car.
Table of Contents
1. Driver’s License
It doesn’t matter if the car is pre-owned. A driver’s license is a very crucial document you must get when purchasing your car. It verifies the state law validates you as a driver.
You only need one driver’s license for your vehicles. If you already owned one before the period you purchase the used car, you don’t have to get another.
Make sure your driver’s license is the type you need for your car. There are several types of driver’s licenses. There is the unrestricted license, provisional license, motorcycle license, etc.
Your state can also classify them depending on the system it employs. There is class C, class A, etc.
You can get your driver’s license from the Department of Motor Vehicles in your state. You must pass the driving test before DMV can issue you one.
Visit your State Department of Motor Vehicles for more details and requirements. Meanwhile, you can also explore why Teslas have different license plates.
2. Car Registration Certificate
A vehicle registration certificate is a legal document that contains the details of a vehicle and its owner.
It proves you can safely drive your car on the road and you paid all the taxes and fees. It is also used to track cars in cases of thefts and record car taxes payment.
You can transfer the ownership of the used car by filling out a registration form. The registration form registers the car in your name.
The form is available with your state’s Department of Motor Vehicles. According to Kat Tretina, a vehicle registration form cost between $30 and $50 depending on your state.
You will receive a registration certificate after a successful process and payment. The registration certificate contains your vehicle identification number (VIN).
VIN is an alphanumeric code that contains unique details of your car and its identity. It proves the vehicle is now yours by legal means. Ensure you take your up-to-date Car Registration Certificate with you whenever you are driving.
Law enforcement agencies may stop you on the road to ask for it. Failure to provide one may warrant a fine or the confiscation of your car.
Here’s data on the user demographics of used car buyers.
3. Transfer of Ownership Certificate
Transfer of ownership involves the official transfer of the car title from the previous owner to the new owner. The title is a certificate that validates the genuine owner of the car. It also contains your Vehicle Identification Number (VIN).
When you are buying a used car, you must transfer the title to yourself. It does not matter if the transaction is with a dealer or a private seller. Your car purchase is legally incomplete without it.
You are required to change the car title with the Department of Motor Vehicles in your state. The previous owner of the car has to sign the existing car title to release its ownership.
After signing, you, as the buyer, are required to take the signed title to your state DMV. Your state will issue you a new title that confirms you are now the legal owner of the car.
Depending on your state, your seller may be required to provide some further documents for this process. It includes odometer reading, bill of sale, buyer info, etc.
4. Car Insurance Documents
That someone else has used the car before does not mean you will not insure it before getting behind its wheels.
Car insurance protects you from financial expenses that occur in the cases of a car crash or any unforeseen tragedy.
You have the option to choose from many insurance coverages for your used car. They include liability coverage, comprehensive coverage, collision coverage, personal medical coverage, and uninsured and underinsured motorist insurance.
In most states, liability coverage is the basic policy you must get for your used car. It covers damages to the car owner and passengers during an accident. You can add other coverages you deem needed for your good and that of those around you.
Driving your used car without insurance coverage warrants risks and penalties. The law can sentence you to jail or require you to pay a fine. According to Forbes, the fine can be between $100 and $1500, depending on your state and car model.
5. Car Tax Certificate
Buying a used car requires paying for sales tax in your name. Some states do not have a sale tax on a used cars. They include Oregon, Montana, New Hampshire, Delaware, and Alaska.
If you live in a state where sales tax is required, you need to pay. It does not matter if you are buying a used car from another region or state that does not recognize it.
Some dealers would have included the tax in your purchase. For others, you are required to pay separately. According to Ronald Montoya, most states charge 5% to 9% of sale tax.
Failure to pay for sale tax may cause penalties. Depending on the state, they will charge you to pay a fine or jail you.
6. Car Road Worthiness Certificate
A roadworthiness certificate is a formal document that vouches that you can safely drive your car on public roads. An inspector company carries out a test on your car’s crucial parts to verify it is still in good shape.
The parts include the car’s wheels, the brakes, the lights, the steering, the windshield, the seat and seatbelts, the suspension system, and overall safety parts.
If these parts meet the standard requirements of the safety measures provided by your state, the inspector company will issue you a roadworthiness certificate.
The test protects you from buying a car in poor condition. You can get a roadworthiness certificate from any licensed institution in the state.
It does not matter if your dealer already made one. You should make a personal verification that the car you are buying is in good condition before purchasing it.
The cost for the test depends on your car and factors, such as the condition, age, brand and mileage of the car.
7. Receipt of Purchase
The dealer issues a receipt of purchase after you have made payment for the car. It serves as proof of transaction.
There is no legal punishment for not having a receipt for your car purchase. But it is highly advisable to get a receipt of payment when purchasing a used car, whether it is from a dealer or private seller.
It will help negate any issues that may arise in the future. It also serves as security for you, the buyer.
The receipt of the purchase contains details about the car, the date the transaction took place, the buyer, the seller, the price, and an agreement of the sale. Both the buyer and the seller are required to sign the receipt.
The signature takes place after both parties have concluded the car purchase. It certifies that you, the buyer, have made all payments. And the ownership of the car is now officially yours.
8. Car Invoice
Your dealer should provide the car’s invoice before you pay for the used car. They will issue you one to request payment for your purchase. You can request it if they did not give you one.
It enumerates the details of what you are paying for. It also contains all the details about the used car, like repairs, physical descriptions, and others.
The details on the used car invoice make it the tracking record you need for your purchase. It helps you know if the car has been and is still in good shape.
You will also be able to know how much your dealer got the car from the previous owner. It will help you decide how much you are paying for the car.
However, using an invoice to decide if a dealer is making too much gain from your purchase may not be 100% reliable. You should make inquiries about the used car you are buying from other sources.
Ask around your locality or from other dealers for how much it goes for. You can also make your inquiries online.