So You Just Bought A Used Car From A Private Seller. Now What?
Elizabeth Blackstock
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If you bought a used car from Craigslist, a friend, or Facebook Marketplace for the first time, it can be hard to know what to do next.
I just went through this process for the first time when I bought a beautiful 1996 Chevrolet Suburban from a nearby friend. I’d purchased my previous car used from a dealership, so this was my first time experiencing the third-party seller marketplace, and I had no idea what to expect or what to do. After some frantic Googling, I managed to figure out all that was required to register, insure, and inspect a car in Texas. But if it’s your first time, it can be tough to know what order to accomplish these tasks.
So, today I’m going to run you through everything you need to know about what you should be doing after you’ve bought a used car.
Related: Buying Cars Online: 7 Things to Know Before You Click to Buy
Third-Party Sellers vs. Dealerships
When you buy a used car from a dealership or other licensed seller, they’re going to take care of a few of the next steps for you. They’ll take care of the paperwork, which can be really handy if you’re buying a car out of state or if the registration process is complex for your state. You’ll likely pay a little extra in overhead at a dealership, but it can be a much simpler process.
If you buy a used car from a private seller, you may have lower costs, but you’ll have to deal with all the paperwork yourself, which varies from state to state. It isn’t necessarily a difficult process, but you’ll definitely want to understand what’s required of you before you jump on that Craigslist deal.
Related: A 7 Step Guide of What to Do (and Not to Do) After an Accident
Step One: Facilitate a Title Swap
Most states require you to fill out some paperwork and/or a bill of sale to facilitate the title swap as you’re buying the car, so you want to make sure that you’ve done your research to understand what forms are required in advance. These forms require the signature of the seller, so you’ll need them during the purchase.
The forms you need will depend on your state, but they can include:
- A title certificate assigned to you
- A bill of sale (possibly with a notarized seller signature)
- An application for title and/or registration
- A notice of transfer of ownership of a car (to be completed by the seller; this is often included on the bottom of the title itself)
- A lien release, if applicable
- Smog/emissions certification and/or odometer statements
- Damage disclosure statements
Some states prefer that both buyer and seller are present during the swapping of titles at the DMV or local tax office. If your documents must be notarized, you can generally find a notary at banks, law firms, photocopy shops, post offices, auto tag and license service centers, libraries, universities, and more. You’ll likely want to make an appointment.
A lien is, in simple terms, a legal claim or right against a property. It means that, if you don’t pay your debts, creditors have a legal right to take your property away. You’ll need that released to purchase a vehicle, but it is up to the seller to take care of that.
Basically, if you’re buying a car from a private seller, there are certain forms that you may need to have present for the seller to sign. Some states also require the seller to remove license plates while other states allow for the transfer from one buyer to the next.
You can easily find the specific requirements for your state on DMV.org.
Related: 7 Car Buying Tips For A Pain-Free Experience
Step Two: Buy Insurance
Most states require that you purchase insurance on a vehicle within 30 days of that used vehicle’s purchase, and you’ll need that insurance to secure an official title swap.
The level of insurance required may depend on your state, but you can easily request a quote online from large insurance companies like Geico and then set up a call with an insurance agent. You may need proof of insurance to complete an inspection in your state.
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Step Three: Get It Inspected
Even if your used car has been recently inspected, you may be required to complete an inspection as its new owner, and you may be required to bring that documentation to the DMV when you take care of the title swap. Some states and counties specifically test for emissions. Others just want to make sure your car is generally in decent driving shape.
We recommend that you have the car inspected before your purchase so that you’ll be fully aware of any issues that could impact your desire to buy the car. It can be a handy negotiating tool, especially if the car fails its inspection and requires work But if you’re confident the seller is offering a solid product, you can have the car inspected after you’ve made the purchase.
Step Four: Registration
Once you have all that completed, you’re ready to head to the DMV or local tax office—anywhere that will take care of a title swap for you. As we mentioned above, some states prefer that both buyer and seller head to the DMV, but it is generally not required.
To complete the title registration, you’ll need:
- All of your state’s required paperwork from step one
- Proof of insurance
- Proof of inspection
- Your driver’s license
- Money to pay the taxes and fees (most places will accept credit and debit cards, but if not, you may need to bring cash)
Basically, if you’ve done the first three steps to your state’s standards, the registration process should be really smooth, and the only big thing you’ll have to complete at the DMV is the fee payment.
When I bought my Suburban, I did so in Houston, Texas and drove it back to the San Antonio area where I live. The next day, I requested an insurance quote that was approved and settled. The day after, I took my Suburban for its inspection and then to the local tax office to put the title in my name. It was really simple and could honestly have all been taken care of in a single day if I had been more familiar with the process.
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