Personal Finance

Buying A New Car: The Legal Requirements

If you’re buying a new car you might think it will be daunting trying to make sure you’ve fulfilled all your legal obligations and have all the correct paperwork in order. While there are plenty of legal requirements that you need to be aware of when you purchase a new car, the entire process doesn’t have to be nearly as daunting as you might imagine it to be. This guide tries to make it as simple as possible for you to know exactly what you need to do and what requirements are necessary when you purchase a new car. Take a moment to give it a quick read and you’ll soon see that the hardest thing you’ll have to do is decide whether you’re happy with your new Ford in black or you’d rather something different.

USA Requirements

Some of the finer points of vehicle ownership requirements can vary from state to state, so bear that in mind before rushing out to sign on the dotted line, especially if you’re buying your car from a different state. The DMV have rather helpfully compiled this handy guide that details every states’ regulations for buying or selling a car. This is a general overview of what you need to do.

Car Title

One of the first most important legal documents is the car title, which contains information such as the vehicle identification number and the name and address of the registered owner. Thankfully when buying a new car your dealership will take care of all of this for you – you only need to apply for a title from a DMV office if you’re buying a car from a private party.

Fees and Bill of Sale

There may also be some transfer fees to pay for within a certain amount of time – usually 30 days. Again, your dealership will make sure all this is taken care of and, although not a legal requirement, they should also provide you with a Bill of Sale, which can act as proof of sale. Don’t be afraid to ask for this if they don’t include it with all your documents.

Car Insurance

While most states require you to have some form of car insurance there are three states that don’t: Mississippi, New Hampshire and Virginia. However, in Virginia a fee is paid to the state for every uninsured vehicle, while in Mississippi if you don’t have insurance vehicle owners must post a cash bond covering the minimum liability requirements. Even if you live in one of the few states that don’t require insurance it’s usually a wise idea to get it, in fact, two in three Americans say it makes them feel more secure.

State Regulations

Finally, remember that if you are buying a car in a different state from where it is primarily used you must register the vehicle in your home state, making sure that the vehicle complies with any state regulations.

As you can see, when buying a new car most things are all taken care of for you – arranging your car insurance is usually the only thing you have to do.

Canada Requirements

You can be assured that any reputable Canadian dealership will deal with all the necessary paperwork to get you on the road as quickly as possible. In fact all you need to worry about is insurance.

Basic insurance is mandatory throughout the country, although different provinces have different requirements about what should be covered.

UK Requirements

Just like in America or Canada, when buying a new vehicle in the UK your dealership will do all the legwork and provide you with all the necessary documents, but there are still some things you’ll have to take care of yourself.

Insurance – it’s a legal requirement that you have at least basic insurance for any vehicle you drive, without exception.

Road tax – All vehicles need to display a road tax disc, although some vehicles and drivers may be exempt.

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