What to Do After Buying a Used Car

Whether you purchase from a dealership or a private seller, buying a used car rather than a new one can potentially save you thousands of dollars. But it can also be a tradeoff. You’ll likely save money, but purchasing a used car comes with different requirements, depending upon your state’s regulations and the vehicle’s age. You may need to handle the paperwork yourself, especially if you’re buying from a private seller.

What to do after buying a used car from a dealer

Shoppers often choose to buy a used car from a dealership to avoid the hassle of completing additional paperwork. While the forms may vary by state, the dealer usually handles transferring the title, registering the vehicle and obtaining a license plate or tags.

If you finance your used car through the dealership, the dealer will also prepare documents that reflect the amount you are borrowing and the terms of the loan. Dealers are required to disclose whether a warranty exists or if the vehicle is being sold “as is.”

Follow these steps after buying a used car from a dealer.

  Learn more about dealer fees when purchasing a car.

1. Get car insurance

To best protect your property, you should have auto insurance in place before you drive away from the dealership. Car insurance protects you in the event of an accident. Except for New Hampshire and Virginia, all states require drivers to carry auto insurance.

If you have an existing insurance policy, speak to your agent about the best time to add your used vehicle. You may have a grace period that covers your newly purchased used car for a brief period before you must add it to your policy. You can also contact your insurer while you are still at the dealership to add the car to your insurance before you leave.

Dealerships will not allow you to drive off the property until you prove that the car is insured. If you don’t already have car insurance on another vehicle, you should get a policy in place before you buy a used car. You can also ask the dealership if you can purchase car insurance through them, or consider buying same-day car insurance online.

If you finance or lease a used vehicle, your lender may require you to take out higher limits on your auto insurance coverage than your state’s minimum requirements.

2. Secure your paperwork

Keep your car’s registration and proof of insurance in the glove box. You should keep the title, bill of sale and financing paperwork inside your home.

3. Be on the lookout for your tags and registration

A dealer usually provides a temporary tag and registration when you buy a used car. You should receive the car’s registration and permanent tags in the mail. When these arrive, attach the permanent tags to your vehicle and put the registration in the glove box.

4. Search for recalls

Over time, automakers may recall vehicles to replace parts that could affect your safety. The manufacturer typically covers the cost of replacing defective parts. Car owners may receive a notice in the mail, but you can also check for recalls online. If your vehicle is issued a recall, be sure to follow the recall instructions to get your car fixed as soon as possible.

Tip: Run the VIN

It’s important to run the vehicle identification number (VIN) of a vehicle before you buy it. A VIN check can tell you about outstanding recalls and whether the car has been stolen, in an accident or subject to flood damage. Learn more about how and why to run a VIN check on a vehicle before purchasing it.

5. Schedule maintenance

A used car may have a few years of wear and tear prior to your purchase. Stay on top of any scheduled maintenance needs, such as oil changes or tune-ups, to keep your used car running smoothly.

What to do after you buy a used car from a private seller

You’ll likely save money on dealer fees by buying a used car from a private seller instead of at a dealership. But without a dealer to prepare paperwork, you should expect to handle the purchase process independently. When you buy a used car from an independent seller, be prepared to:

1. Get an inspection

You may be required to get an inspection when you buy a used car from a private seller. Inspection requirements may differ based on the car’s age, as well as the state and county where the vehicle will be registered.

For example, Maryland and New York require a safety inspection before transferring ownership of a vehicle. To register your vehicle in certain counties of Colorado, you must complete an emissions test on vehicles with model years 2017 or older.

Check with your state’s Department of Motor Vehicles (DMV) about inspection requirements for private car sales, and consider getting a used car inspection from a trusted mechanic before you buy.

2. Insure the car

If you already have car insurance, you should contact your agent or go online to add your newly purchased used car to your existing policy.

While your insurance policy may automatically cover your vehicle for a short time, you should add the car to your policy as soon as possible. If you forget and get into an accident after the grace period expires, you’ll likely need to pay for any damages out of pocket.

If you don’t already have car insurance, you can purchase a policy that will go into effect when you buy your used car. You may need to provide the insurance agent with the names, birthdates, Social Security numbers and driver’s license information for all drivers in your household.

In addition, you may need to provide:

• The address where the car will be parked, if it’s different from the insured’s address.
• The VINs for all vehicles covered under the policy. If you don’t know the VIN of the used car you plan to buy, ask the seller to provide it ahead of time.

3. Transfer the title and registration

When you buy a used car from a private seller, you must transfer the title and register the vehicle in your name.

Typically, the seller signs the title over to the buyer by completing the title assignment section of the certificate. The buyer then brings the assigned title and any other required documents to the local DMV office. However, title and registration processes vary by state, so go to your state’s DMV website to learn what’s required for a DMV transfer of title.

Most states also require you to pay sales tax when buying a used car. If you purchase from the dealer, the state sales tax is usually included as part of the vehicle’s price. In private party car sales, the buyer typically pays the sales tax to title and register the car.

Since tax varies based on your state and the age of the car, check with your local DMV office to find out how much you need to pay.

  Read more about how to transfer a car title.

4. Pick up temporary tags

If you aren’t transferring a license plate, you may be given temporary tags when registering your vehicle with the DMV. A permanent license plate may be mailed to you, usually within a few weeks.

5. Save the paperwork

You should only keep a copy of the car’s current registration and proof of insurance inside the vehicle. The vehicle’s bill of sale, title, financing documents and any other completed paperwork should be kept in a secure place inside your home. As a precaution against identity theft, any personally identifiable information can be redacted from any documents left in the car.

6. Check for recalls

A car manufacturer may recall vehicles to repair or replace a part that may be unsafe. While manufacturers typically notify car owners of the recall by mail, it’s unlikely you’ll receive these notices if you buy a used car from a private seller. You can check for recalls on the National Highway Transportation and Safety Administration (NHTSA) website. If you find a recall on your vehicle, you should take immediate steps to repair your car.

7. Schedule maintenance

Regularly maintaining your vehicle can improve its performance and extend its life. Be sure to change the oil and monitor fluid levels as recommended. Other parts may require replacement based on the odometer reading, so be sure to consult the owner’s manual for scheduled maintenance on components such as the vehicle’s transmission, belts and spark plugs.

Tip: Read the owner's manual

Your car’s manual contains vital information about using your vehicle and scheduling maintenance repairs.

If you plan to finance your used car purchase, you can save money by shopping around for an auto loan. LendingTree makes the process easy. Just answer a few questions and you may receive up to five loan offers from lenders, depending on your credit history.