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 could save you thousands. 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
You may have chosen to buy a used car from a dealership to avoid paperwork hassle. 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.
1. Get car insurance
It’s a good idea to get your new-to-you vehicle insured before driving off the lot. If you already have a policy, the coverage you carry now should extend to your recently purchased car for some time — typically seven to 30 days, depending on the company.
Still, this is an unnecessary risk. Only the coverage you have currently will apply. If you have liability only, then your new car will also only get liability. If you cause an accident on the way home, your insurance won’t cover the damage to your new car (you need collision insurance for that).
Dealers also usually require proof of coverage before you leave. You can call your insurance company to add the car while you’re at the dealership. If you don’t have a policy, most companies usually offer same-day insurance if you’re buying a car.
“If you’re shopping for new car insurance at each renewal, you’re already ahead of the game. You should also check rates during major life events, like when you move or buy a car.
“Every insurance company has its own way of calculating premiums. A company that was too expensive for your old car might be the most competitive for your new one.”
— Carol Pope, Senior writer and licensed car insurance agent
2. Secure your paperwork
Put your temporary 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 what if the recall happened before you bought the car? That’s why you should check for recalls online. If you find an open recall, follow the recall instructions to get your car fixed as soon as possible.
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. In a perfect world, the dealer should have done preliminary maintenance before selling the car. Now that the car is yours, 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. Also, consider getting a used car inspection from a trusted mechanic before you buy.
This is not the same as the state-required inspections we’re talking about here, but buying from a private party can be risky — who’s to say that they’re telling the truth about the vehicle’s condition?
2. Insure the car
Whether you’re buying from a dealership or a private-party, you should insure your newly purchased car before driving it. For more information, please see step one here.
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.
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.
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 multiple offers from up to five lenders, depending on your credit history.
Frequently asked questions
To sell your car privately, you’ll need your car’s title to prove you’re the owner of the vehicle. Consider gathering the car’s service records and the original sales paperwork to provide evidence of the car’s condition and value. If you’re selling a car with a loan, you’ll need to pay off your loan to get the title from your lender.
Certain states provide a specific bill of sale form on their DMV website, but if your state isn’t one of them, you can write your own bill of sale.
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