Auto Buying and Selling

Besides your home, the purchase of a vehicle is likely the biggest (and most important) purchase you will make. Most drivers will buy and sell a number of cars during their driving years. So, it is important to become both a wise consumer and seller. Most states have requirements for both auto sellers and buyers; if the proper paperwork is not filed with the state there can be repercussions ranging from time-consuming extra procedures to financial responsibility and liability issues.

When you decide to purchase a vehicle you'll need to do your due diligence. To get started, you'll want to take these steps:

• Research: Whether online or at the library, you'll want to read all you can about the model and make of the car you are interested in. Good sources of information are the consumer reports, the safety testing results and the reviews of the vehicles by experts in the automotive publishing industry.
• Decide if you are in the market for a new or used vehicle. A new vehicle will cost more but it does afford the latest in safety features and gas mileage and any cost of repair should be covered under warranty. On the other side, a used car can be easier on the wallet, may still have many serviceable miles yet to go and will likely be more economical to insure. Once you have done your homework you'll be checking out a lot of cars.

Once you have narrowed your search, be sure to call your insurance carrier to see how much the coverage you need will add to the bottom line.

When buying a used car always take the following steps for your protection:

• Order a Vehicle History Report: This should tell you if the odometer has been rolled back; if the car has reported damage from a flood or accident; and, if the auto has been used as a work vehicle, such as a taxi or police car.
• Have it inspected by your mechanic: If your trusted mechanic says it checks out fine, you're less likely to run into mechanical issues right away.
• Ask the seller to show you the current title and registration. Not having those documents may complicate your ability to transfer ownership into your name.
• If you live in a state where the license plates stay with the owner and not the vehicle, understand how you go about getting temporary tags.

If you decide to sell your vehicle, it's just common sense to advertise it widely and do the maintenance and cleanup that will show it off to its best advantage. But beyond that, there are some additional things to take care to make the sale go through as smoothly as possible:

• Find your title and registration. If you cannot find those documents, apply for duplicates at the DMV.
• Consider buying a Vehicle History Report. Having one on hand to show potential buyers will assure them of the condition of the car and give them confidence in dealing with you.
• Know what paperwork you need to supply to the new owner; some states require those documents to be notarized. Not all states require a Bill of Sale any longer; if you do need one, order the form through your state DMV or through a third-party provider.

If you buy a new car, the dealership will file the necessary paperwork to get your car titled and registered. If you buy a used car, you will need to process the paperwork yourself. Regulations, forms and amount of fees vary by state, so find out the proper steps in your state. The states will also have varying procedures when it comes to “unusual” transfer situations such as gifting a car, donating a car, transfer upon death or changing the names on the title; you'll need to check with your state DMV for the particulars.

Lastly, if you are purchasing a car and it does develop chronic mechanical problems, you may have recourse. All states offer a degree of protection to consumers of new cars under the individual states' Lemon Laws; some states take that a step further and offer a version of the Lemon Law to cover used vehicles as well. Check with your home state for the criteria you must meet to qualify for coverage by the Lemon Law.