What Documents Do I Need to Buy a Car? Get the Full Checklist

Buying a new car is an amazing opportunity in life, but it requires some necessary paperwork. You might have a question: What documents do I need to buy a car? If so, you have come to the right place. In this guide, I have created the checklist of necessary documents for buying a car without hassle. If you are purchasing a car in the USA or any other country, you need to have the right documents ready.

Table of contents

• What Documents Do I Need to Buy a Car?
• Do’s and Don’ts when submitting documents to buy a car
• How to Check If Your Documents Are Valid?
• Do You Need a Co-Signer? Key Requirements Explained
• How to Avoid Scams When Buying a Car
• Solutions for Missing Car Documents
• Conclusion
• FAQs

What Documents Do I Need to Buy a Car?

When purchasing the vehicle, some documents are necessary to complete the trade legally and safely. But what documents do you need to buy a car? You must have the following documents when buying the car to verify your identity, confirm your ability to drive, and complete the legal transfer of ownership:

1. Proof of identity (ID documents and passport)

The most essential thing you required was a government-issued ID card when buying the car. You can either use the state-issued ID card, driver’s license, or passport for verification. Moreover, this document is required for both the seller and buyer of the car. Make sure that your ID card is not expired and all the information is correct, like your address.

2. Valid driver’s license

Another necessary document you need to buy a car is a valid driver’s license. The license is required because it is not legal for a person to buy and drive a car without a license. If you are financing the car, the lender may also request a copy of your driving license.

3. Proof of auto insurance

If you are buying or selling a financed car, you require proof of auto insurance. Generally, most states in the USA require buyers to buy insurance before purchasing a car. Also, make sure that the insurance policy is valid in the country where you are buying the car and contains all the details. If you do not have insurance, get a new insurance policy if it is required in your country to buy the car.

4. Payment method (cash, check, or loan approval documents)

Different car dealers and private sellers may accept different payment methods. So, make sure you have the right payment documents to buy a car. Here are the details of some common payment methods:

• Cash (if paying in full)
• Certified check or bank draft
• Loan approval documents (if financing)

5. Finance agreement and loan approval letter to buy a car

If you are buying the car in installments, you must bring the loan approval letter. This loan approval letter is a necessary document to buy a car in installments. These documents include multiple details about the loan or installment plan, such as:

• Interest rate
• Monthly payments
• Loan duration

To get these documents of the finance agreement, contact your lender and make sure that it is signed. Additionally, do not forget to read all the terms and conditions of the agreement.

6. Car registration documents to buy a car

If you are buying a used car, make sure that you and the seller have the necessary registration documents. These car registration documents are required to make sure you legally own the car. Moreover, do not forget to verify the history of the car and check that the car has no legal issues.

7. Vehicle registration certificate

The vehicle registration certificate, also known as the V5C certificate or pink slip, is another necessary document needed to buy a car. The purpose of this document is to show who is the real owner of the car.

If you are buying the car from the dealer, he will handle the car title transfer for you. In comparison, if you are buying the car from a private seller, it is mandatory for them to sign the title over to you.

8. Bill of sale and purchase agreement

Another necessary document you need to buy the car is the bill of sale and purchase agreement. This agreement contains all the details about the history of the vehicle. It includes:

• Buyer and seller information
• Vehicle details (make, model, VIN)
• Purchase price
• Sale date

This document is highly needed for tax and registration purposes. Like a vehicle registration certificate, if you are buying from a dealer, he will provide this document. In contrast, if you are buying from a private seller, both of you will create the bill of sale and purchase document to buy the car.

9. Odometer disclosure statement

Another item you need to buy a car is an odometer disclosure statement for vehicles. Federal laws in the USA and some other countries require sellers to provide this document. The odometer disclosure statement is only important for vehicles less than 10 years old. The primary information this document gives is the mileage of the car at the time of sale.

10. Sales tax and registration fee receipts

Another important document you need to buy a car is sales tax and registration fee receipts. When you pay the sales tax and registration fee, you receive a receipt. Keep these receipts as proof of payment when buying the car.

11. Proof of residence

Some countries require you to provide proof of residence when buying a car. You can provide the utility bill, lease agreement, or bank statement showing your location. You need this document to buy a car because it is used to verify that you live in the country where you live.

12. Documents of income proof and bank statements

Proof of income and bank statement documents are needed to buy the car, especially for financing. This document showcases that you have stable and enough income for supporting installments.

13. Down payment receipt

Finally, do not forget to get the receipt from the car dealer if you are making a down payment. This will act as proof that you have paid part of the total payment.

Summary of documents you need to buy a car

So, if you have the question, what documents do I need to buy a car? The short is that you require an ID document, driver’s license, auto insurance, payment method, finance agreement, car registration, vehicle registration certificate, bill of sale, odometer disclosure, sales tax receipt, proof of residence, proof of income, bank statements, and down payment receipt.

Do’s and Don’ts when submitting documents to buy a car

There is a lot of paperwork required to buy the car, which increases the chances of mistakes. Other than knowing what documents you need to buy a car, you must be aware of the following do’s and don’ts:

Do’s when submitting documents required for buying a car

1. Before signing or submitting the documents required for buying a car, carefully check the details. Make sure that your name, address, vehicle information, and every payment detail are correct.
2. Always bring the original documents you need to buy a car. Whether it is a driver’s license, payment details, or any other item, car dealers require original documents for verification. Moreover, also bring a copy of each document for submission.
3. If you are buying a car from a dealer, make sure that it is licensed and reputable. In comparison, if you are buying from a private seller, check the proof of ownership and vehicle registration details.
4. Some dealers might charge an extra fee for processing, documentation, and other purposes. So, read the contract carefully and understand each and every cost.
5. Before showing the documents and paying the price, assess the damage to the car. Although you can trade in a damaged car, the prices will be low based on the extent of the damage.
6. Verify the engine number, chassis number, and other details of vehicles with documents. Make sure that the details are correct in all the documents you need to buy a car.

Don’ts regarding the documents you need to buy a car

1. Never forget to ask for a receipt when you pay the car price. A receipt provides proof of payment and helps protect you in case of any disputes.
2. If you are buying a used car, avoid making a deal if it has negative equity. You can trade in a car with negative equity, but it will impact the loan terms of your next car.
3. Do not forget to check the expiration date of all documents you need to buy a car.
4. Never sign a document that has missing information or blank spaces. Many dishonest dealers and private sellers defraud the innocent buyer.
5. Do not forget to check the document structure and applicable fees of the Department of Motor Vehicles. Every country has different requirements for car trade-ins, registration, and taxes.
6. Avoid rushing when checking the documents required for buying a car. Carefully check all the details and don’t hesitate to ask questions if something is wrong.

How to Check If Your Documents Are Valid?

Do you know how to confirm the documents you need to buy a car are valid? Let me tell you a few steps to verify your documents:

• Check the expiration dates of all the paperwork necessary for buying a car.
• All required signatures must be present on contracts and agreements.
• Verify that all documents have official stamps, signatures, or watermarks.
• Cross-check all the details, like registration and title details, from the local DMV office.

Do You Need a Co-Signer? Key Requirements Explained

If you are financing the car and do not have enough credit history, you will need a co-signer. In this scenario, think about what documents you need to buy a car and who will be the co-signer. A co-signer is a person who takes the responsibility to pay the price if you are unable to do so.

Who can be a co-signer?

A co-signer can be any person in your family or a friend who has a stable and good income. Here are some requirements for a co-signer:

• Having a high credit score
• A steady job or income source
• A low debt-to-income ratio

Pros and Cons of Having a Co-Signer

Taking help from a co-signer comes with benefits and disadvantages. Here are the details:

Pros:

• Increases your chances of loan approval.
• May help you get a lower interest rate.
• Improve your credit score with on-time payment.

Cons:

High responsibility on the co-signer if you do not pay the installment. It also badly impacts the credit scores of you and the co-signer. Moreover, it can damage the relationships if financial issues arise.

How to Avoid Scams When Buying a Car

Whether you are buying a new or used car, scams are everywhere. Here’s a list of some scams that dealers or sellers do:

• Some dealers remove the car history from documents, such as records of accidents, floods, or hail damage. So, without properly verifying the history of the car, do not make the deal.
• Scammers may ask you to send money through a fake escrow company. So, it is mandatory to send the money using only officially verified payment methods.
• Many sellers modify the mileage of the car to show that it has less driving. This scam is very common, and only high-level car experts can avoid it.

Tips to stay safe

Always meet with dealers and sellers in safe and public places. If you plan to buy a car with a history of accidents or hail damage, confirm whether it is worth fixing hail damage or not. Additionally, take the expert mechanic with you for the car inspection and the very accurate details on all the documents.

Solutions for Missing Car Documents

Have you lost some of the documents you need to buy a car? Here is what you can do:

Lost title

If you have lost the title, request a duplicate title from the DMV. On the other hand, if the car still has a loan, you can request a new title from the lender.

No proof of insurance

Proof of insurance is a necessary document needed to buy a car. If you have lost it, quickly request a new one from your insurance provider.

Missing registration documents

If the seller is unable to provide a registration document, avoid buying it. However, if you are highly interested in the deal, confirm the details from the Department of Motor Vehicles.

Conclusion

So, before making the final deal, make sure that you know all the paperwork. What documents do I need to buy a car? How to verify the accuracy of documents? How to avoid scams and make safe deals? You must know the answer to all these questions to make a safe and favorable deal.