Buying A Used Car: The Relevant Documents

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If  you are out on a quest to buy a used car here are a few things that you should know before you go out and begin the hunt. The following documents will help ensure the car you buy is safe, legal and in a reasonable condition.

Documents That You Should Check Before Buying

Before any purchase or commitment is done, the buyer must properly inspect the car. Viewing the car in daylight is highly recommended. The buyer should  receive the following documents and information from the dealer before any agreement can be done.

1. A duly-filled Buyer’s Guide

The Buyer’s guide is a document that every seller must provide to a buyer. It contains crucial information about the purchase history of the car and whether the car comes with a warranty or not.

It should contain the major issues about the car that the buyer should be prepared for and the cost of repair the dealer is willing to pledge under warranty. The guide is also a reference that should be kept after the sales.

2. Vehicle information

  

The Vehicle Identification Number (VIN) should be provided to the buyer before the sales. The code indicated in the document should match with the etchings found on the car’s chassis (location may vary) in order to check if the car has been rebuilt sometime in its history.

The VIN is also necessary in obtaining the vehicle history report from the DMV to verify if the vehicle had ever been reported as wrecked or stolen. This information should also be supplemented by the car make, car model and model year.

 3. Dealer Information

The dealer’s name and contact information should be made available to the buyer. This should be printed or included in the Buyer’s guide.

  4. Warranty Information

 

Although typically included in the Buyer’s guide, warranty certificates (if there are any) should be provided by the car salesman. It should be able to indicate whether the warranty is Full or Limited, as well as the percentage of repair cost that the warranty can cover. Manufacturer’s warranty, if still applicable, should also be included with the documents.

Documents That You Should Check  Upon Purchase

After validating the condition of the car and the package that it comes with, the following documents should be prepared by the dealer in order to finalize a purchase.

1. Bill of Sale

 

A bill of sale is a document that serves as the record of a car sale. Although it is not required in all states, the buyer should still be provided with this document as proof that the purchase has indeed taken place.

It should contain the date of sales and dealer information. It should also include the purchase price, vehicle type and other information such as odometer reading. A bill of sale does not prove ownership though and a title transfer must be secured in order to fully give ownership of the car to the buyer.

2. Car title

The car title is the most important document a buyer must receive from the seller during a car sales. It is the most crucial requirement for a title transfer and must be secured by the buyer no matter what. Compared to buying a brand new car, applying for a title transfer of used cars requires more effort.

Dealers usually help a lot in applying for title transfers since they are the ones responsible in providing the necessary documents, but the filing of the application is the buyer’s responsibility. The requirements for a title transfer vary from state to state but it usually includes a title transfer application form, odometer reading, the VIN, bill of sale and the title certificate.

3. Clearance from the institution that has financed the vehicle.

In cases wherein the seller has originally bought the car under a financing, a “Notice of Security Interest Filing” must be submitted. This is done in order to prove that the lien has been satisfied and that the seller has no withholding obligations in the financing institution. A letter from the financier will also be sufficient enough in cases where a “Notice of Security Interest Filing” is not available.

Documents That You Should Get After Payment

After the payment has been done, the buyer’s priority shifts from securing the documents that prove his ownership of the car to legally transferring the title of the car under his/her name.

The Department of Motor Vehicles is the government agency involved and these are the typical requirements they impose to register a recently purchased secondhand car.

 

1. Vehicle Inspection Certificate

 

All cars that undergo the registration process must be duly inspected first for any safety issues. Licensed inspection stations are scattered across cities and counties, and even the dealer could be an authorized inspector. Some inspection certificates are valid for 90 days or even longer.

2. Proof of Insurance

          

This must be secured prior to registration and the dealer should be able to provide the buyer with enough information on how to secure one. If the buyer holds a driver’s license from any American state, he/she can apply for a policy from any insurance company. Foreign license holders are either asked for higher premiums or required to convert to a local license.

3. Temporary Registration Certificate

Cars which passed inspection could apply for a temporary registration. Temporary registrations could be valid for 30 days from the issuance date and may be purchased after settling the necessary fees. The temporary license allows the buyer to provide the necessary repairs to the car and transport it to its destination.

This is definitely a must know if you are the type who would always like to be a step ahead. This will help you come up with your negotiation strategy and it will send a bold warning to the salesman that you are not a pushover and that you are prepared. Remember, “the well prepared warrior always gets the victory”. When you’re going out there always think that you’re a warrior and your victory is getting your desired car at a reasonable price.