by Andrew Rohrlich
If you have recently purchased a used car from a private seller, you may wonder what to do next. First, enjoy this moment. The process of buying a used car requires a lot of hard work. You need to take some additional steps, but they’re all manageable.
8 Steps To Take After Buying a Car From a Private Seller
This article guides you through the steps to take after buying a car and defines some key terminology you may encounter. Use this post as a checklist and refer to it often to ensure you don't run into any issues with your newly purchased used car.
Obtain a Bill of Sale With a Vehicle Identification Number
A bill of sale is a document that proves the transfer of ownership of an item via the exchange of money. Ideally you sign one when buying your car. Even though not every state requires a bill of sale, securing one during or after buying a used car from a private seller is a good idea.
Typically, bills of sale record transaction information, such as purchase price and date, for the transfer of items with substantial value. Examples of such items include automobiles, watercraft, and personal property. The laws for bills of sale vary from state to state, so be sure to check the requirements in your state to ensure you comply.
A bill of sale for a used car purchase should include the following:
- Vehicle identification number (VIN): Each car's VIN is unique and discloses valuable historical details about the vehicle. The VIN can reveal information such as the vehicle's previous owners, its involvement in any major accidents, inspection dates, and if anyone has ever reported the car stolen.
- Transaction information: Details like sale price, sale date, and any payment plans the seller and buyer have agreed upon should be recorded here.
- Contact information: This should include the full names, addresses, and phone numbers of both the current owner and the previous owner.
- Odometer reading: The mileage must be confirmed and recorded at the time of sale.
- Vehicle details: The make, model, color, and year of the car, as well as any other identifying factors, should be described.
- Terms and conditions: Unless the buyer and seller have agreed upon a warranty, this section usually states, "as is."
The government recognizes a bill of sale as an official document that protects both the buyer and the seller. In freeing the seller of any future obligations, a bill of sale gives the buyer complete control over the vehicle. In states that require a bill of sale, you may need to present it, along with the vehicle's title, to the Department of Motor Vehicles (DMV) for title transfer or vehicle registration.
Get a Full Inspection
Even if you brought your vehicle to an experienced mechanic before purchasing it, it is wise to get a full inspection after the date of sale. In some states, a mechanic must perform a complete safety inspection before the transfer of ownership can legally occur in a private sale.
Some states have laws that require vehicles to pass smog checks. Check your state DMV website for specifics on your vehicle type and any emissions requirements that may exist. These tests can be conducted at a variety of locations that specialize in issuing emissions certificates.
Ask your mechanic about any routine services your vehicle may need. Getting these services scheduled soon after purchase is ideal so you can stay on top of your car's maintenance needs. Some examples include oil changes, tune-ups, brake light and tire inspections, and belt replacements.
Obtain and Organize All Important Paperwork and Documentation
After buying a used car, an often overlooked measure is storing essential documents appropriately. Many people might assume that all important papers need to stay with the vehicle. The truth is, most of your documents should be left at home with a couple of exceptions.
Paperwork that should remain in the vehicle's glovebox includes proof of insurance and the vehicle's registration. These documents are necessary in case of a traffic stop.
You should keep all other documentation securely at home, including your car's bill of sale, title, and all paperwork with detailed financial information. These documents are considered sensitive and should not be kept in your vehicle.
Contact Your Auto Insurance Company
Getting your used vehicle promptly insured is one of the most critical steps after buying a car. If you currently have auto insurance, a quick call to your agent may be all it takes to add your new used car to your insurance policy.
Alternatively, you can obtain car insurance before you even purchase the vehicle. This process can take a little more time, but it will guarantee that your car is fully insured when you drive it home for the first time.
Complete a Title Transfer of Ownership
Requirements for transferring a title of ownership vary by state. Still, there are a couple of general guidelines you should follow.
First, ensure that the title is clean by carefully checking the document. A car that does not come with a clean title will have language that reflects this on the back.
If you unknowingly purchase a vehicle without a clean title, it could complicate the financing and insurance processes. If your used car comes with anything other than a clean or clear title, check the vehicle history report to see why.
Here is a breakdown of the most common types of vehicle titles you should be aware of:
- Clean or clear title: A vehicle with a clean or clear title does not have any unpaid loans associated with it. It has also never been considered a total loss by an insurance company due to an accident or significant damage. This type of title is the easiest to transfer.
- Salvage title: When a vehicle comes with a salvage title, it usually means it has been in a major accident and was considered a total loss by an insurance company. Because the actual cash value (ACV) of cars with salvage titles is lower than the repairs needed to make them roadworthy, these vehicles are challenging to finance and insure.
- Lienholder title: Vehicles with lienholder titles are involved in unpaid debt. When you take out a loan for a car, you receive this type of title for the duration of the loan period. Once you have paid off the debt, your financial institution will send you a clean or clear title.
- Rebuilt title: These vehicles received significant repairs at some point but are now considered roadworthy.
- Branded title: Branded titles are an umbrella category for other title types. For example, a car may have a branded title with an explanation of why it is labeled as branded. Some common reasons are flood damage and odometer rollback.
To finalize the process, you should visit your local DMV to see what subsequent steps you need to take to complete the title transfer.
Adhere to Your State's Registration Requirements
Registering your newly purchased used vehicle requires a visit to your DMV to acquire a license plate, registration tags, and your official registration document. You can expect the DMV to need the following documentation depending on your state:
- Completed bill of sale
- Title in your name
- Proof of residency
- Proof of insurance
- Your driver's license
- Verification of emissions compliance
Check Sales Tax Requirements
After purchasing a used vehicle from a private seller, your state may hold you responsible for specific taxes or fees. Visit your local DMV or county tax office for detailed information on what you might owe. Examples include sales tax, title transfer fee and tax, and excise tax.
Have Your Car Detailed and Upgraded Accordingly
What to do after buying a car from a private seller? For many people, the answer is "clean it." A used car sometimes only feels like our own once thoroughly washed and detailed. Even if the vehicle might seem clean, you never really know how well the previous owner cared for it.
It helps to also consider upgrading your vehicle. To ensure your car is in tip-top running condition, your mechanic can perform a few maintenance services. You might ask about a tune-up, spark-plug replacement, fluid top-offs, wheel and brake alignment, and anything else your auto professional might recommend.
Ensure Your Next Car Purchase Is Safe and Seamless
Purchasing a used car from a private seller does not have to be a headache. In fact, with the right advice, it can be exciting. There are a lot of details to consider along the way, but the process of buying a used car can be manageable with some knowledge and organization.
This article was written by Andrew Rohrlich. As a brand and product marketing expert, Andrew Rohrlich has crafted products, experiences and communications for household names like Gap and for multiple automotive technology businesses. For nearly a decade Andrew has studied automotive retail in depth from a customer point of view and aggregated the industry’s best research, thought leadership and know how to provide credible and important information to auto shoppers and sellers.