Purchasing a New (Used) Car: The Groundwork

In case you ever wondered what to do as far as buying a used vehicle from a private party from a different state (purchasing a used vehicle from a private party as an out of state resident):

  1. Research the vehicle
    1. Use Kelly Blue Book to see if you’re getting a good price. Use Car Complaints to see the most common issues with the car. Look up the vehicle’s parts’ costs and call a local mechanic to see if they charge a higher labor price for the vehicle you’re looking into. Ask how many miles are on the current tires (to see when they’ll need to be replaced).
  2. Gather funds
    1. Contact bank if necessary if you need an Auto Loan. Do this 30 days before the sale is to take place. They will potentially ask for: Vehicle VIN#, vehicle mileage, vehicle pictures, copy of the vehicle title from the current owners, last year’s W-2 and Tax Return, Year to Date Income Verification, copy of the most recent pay stub, and a copy of the lease/rental agreement for your current residence. They will also look up your credit score.
  3. Inquire about tags and registration before buying the vehicle
    1. If buying the car from another state, you will need to inquire about getting temporary registration for the car, so that you can drive the car back to your state.
    2. Contact the state’s county treasurer/clerk office you’re purchasing the vehicle in. Ask what you need to do as far as getting temporary registration.
      1. They will need a copy of the notarized title (have the previous owner’s sign over the title to you), proof of insurance, and a small fee.
      2. They will issue you temporary registration that will be good for 30 days. Its purpose is so that you can drive your new vehicle back home. Once back home, you’ll register the vehicle at your county’s clerk office.
    3. Contact your state’s county treasurer/clerk office about registering the vehicle in your county and what you need to do as far as the title is concerned.
      1. After driving the vehicle back to your state, they will potentially ask for: the notarized title, proof of insurance, and a fee to get the vehicle registered and new tags put on.
  4. Apply for insurance
    1. Call an insurance provider. They will issue you proof of insurance (make it effective the day you are actually buying the car), which you will then bring with you to where are you purchasing the car. If you prefer, you could get a quote issued and ready to go. Then, on the day of the sale, go online or call the insurance provider and have them bind the coverage (make it effective). You’ll need to be prepared to make a down-payment on the policy.
  5. Sale
    1. Note: If the previous owner’s had a lien-holder on the car title but the lien was satisfied (the car was paid off), you’ll need to make sure the previous owners give you an original copy of the lien release along with the title.
  6. Get temporary registration
    1. See Step 3-2
  7. Drive the vehicle back home
  8. Register the vehicle in your state
    1. See Step 3-3
  9. Update your insurance provider (if needed)
  10. Voila! Enjoy your new ride.

*Tip: ALWAYS keep good records on all of your employment and tax return information (just good records on living in general). It will help to make processes like this go much quicker and smoother. Plus, it’s just a good thing to do.

*Another Tip: When budgeting for a car, include auto loan payments (if you have one), insurance payments, gas, and MAINTENANCE. Make sure to include car maintenance in your budget so that you’re prepared for those expenses when they come (car parts, tires, labor and such aren’t cheap).

*There are other options as far as from whom and how you purchase a car. You could buy a car from a dealership, used auto lot, or private party. You could finance the vehicle through the dealership or auto lot, through a bank, through a private party, or with cash (woohoo good job!). You could buy the vehicle in-state or out-of-state. The above guidelines are for if you finance the vehicle through a bank, buy the vehicle from a private party, and buy the vehicle out-of-state.

*After about 2 months of working on this – we ended up NOT financing through the bank. I learned a lot through this process though, for which I’m thankful. The steps are all the same for what we’re doing though, we’re just not going with Step 2. We’re financing through a private party instead of the bank.

*I’m oh so very thankful for all of the help my father gave to us – I called him countless times, and learned so much from his experience and wisdom.

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