What Documents Do You Need To Buy A Used Car?

The process of buying a used car shouldn’t be complex. Typically, all you have to do is walk into a dealer shop, select your car, sign the papers, make a payment and leave with your car.

Almost always, the process can drag for days or even weeks. Not to mention that sometimes some people land into dodgy deals. Why?

Most people don’t know what documents to bring with them when buying a used car.

If this is the first time you’re buying a car, you have a lot to learn.

The Basics Of Buying A Used Car

Before you buy a used car, there are certain things you must be conscious about. These include:

  • The law and your state. What is the law in your state about buying a used car? Consider factors like roadworthiness, age of the car and previous ownership.
  • Can you drive? Do you have a valid driver’s license? Does your state require drivers to have a driver’s license, and at what age?
  • Your type of car. What type of car are you buying? And what do you need the car for?
  • Dealership. Where are you going to buy the car from — an individual/private seller or a dealership? Is the dealership authorized to sell cars?
  • Financing. Can you afford the car? What’s your budget? How are you going to finance your car’s purchase?
  • Trade-In or Fresh Car? Make the decision whether you want to trade in your current car or buy a fresh car.

Answering these questions will let you know the types of documents you need to buy a used car.

What Documents To Bring When Buying A Used Car

Here are the documents you’ll need to have before you start the process of buying a used car at the dealership:

  • Social security number
  • Your driver’s license
  • Proof of insurance
  • Form of payment (financing)
  • Recent pay stubs
  • Recent utility bills
  • Credit score and history
  • A list of references (Guarantors)

1. Social security number

Your social security number is unique to you and is the ultimate identification that anyone who wants to know about you can check.
The social security number will help the dealer gather any other important information about you that may help them determine whether to accept or deny your purchase. How?
With your social security number, the dealership can see your citizenship, state, residence, credit history, criminal charges (if any), insurance claims, driving history, etc.

2. Your driver’s license

Driving without a license is illegal in most states. So, you need to carry your driver’s license or proof of a driver’s license to the dealership.
The dealership needs to confirm that you’re a legally licensed driver before allowing you to drive off.. You will need it for three things:

  • The test drive
  • Proof of residence within the state
  • For your car loan (if your car is financed)

Also, make sure your license is valid and not expired.

3. Proof of insurance

You’ll need to show proof of insurance when buying a used car. Most states require car insurance or proof of insurance for all vehicles. This is what shows that you will fulfill your financial duties in the event of an accident that causes damage, injury, or even death.
So, call your insurance agent and have them prepare a proof of insurance document beforehand to avoid delays at the dealership. It is also important to bring your current proof of insurance card to the dealership.

4. Form of payment (Financing)

Whether you’re buying your car in cash, using a check, a banker’s slip, or a loan from a financier, you’ll want to have your payment ready — and prove it.
If you’re being financed from the dealership, carry with you all the relevant documents to help you process the loan. These can include your:

  • Identification details
  • Contact, and address
  • Bank account information (and banker details)
  • Bill payment slips (water, electricity, gas, internet, etc)
  • Insurance details
  • Most recent paycheque
  • And more as may be requested by the dealer

If the dealer will help you finance the car, be prepared to pay a down payment. Call the dealership beforehand and speak to their financing department to see what documents they require including anything about pre-approved financing.

5. Recent pay stubs

We’ve already said that your paycheque is one of the documents you may need to carry if you plan to get a loan through the dealership.
This is important, so you show proof of your recent employment.
You can carry a couple or more of your most recent pay stubs — just in case — because the dealership will want to verify how you plan on paying the loan for the car.

6. Recent utility bills

Once again, proofing your utility bills is a clear door towards your finances. Are you fulfilling your financial responsibilities? If you can pay for your utilities on time, the dealership will start asking questions about your capability to pay for the car.
If you’ve moved states, you’ll need to produce a current proof of residence document to buy a car.
The utility bills must be as current as possible (dated within the past month or two) and show your address, full names, and identification.
Bills also show your bank account number and the dealership can use this information in case they need to verify any information.

7. Credit score and history

With your social security number, the dealership will be able to pull your credit score and history. But you must check it yourself, review it and bring it with you to the dealership to buy a car.
The credit score will show your creditworthiness and whether you can qualify for a loan or not. The dealership will also use it to calculate your insurance premium rates.

8. A list of references (Guarantors)

If you don’t have a great credit score and are applying for a loan from the dealership, you might also need to have a list of references. The reference must not be living with you.

You need to have this with their names, contact information, business address, and signatures. They are people who can vouch for you and guarantee that you’ll pay your credit.

What Documents To Bring To Trade-in Your Car

If you want to trade in your current car, you’ll need a little extra documentation. These include:

  • Current certificate of title. This will show the dealership that you’re the valid owner of the vehicle, and they’ll help you transfer your car’s title to them. The dealer or lender may hold the title until you pay off the car. But this depends on your state.
  • Current car registration: Unless the car you’re trading will be junked, you must provide its current registration — whether expired or updated. If the registration is expired, you may get less because the dealership will have to make the registration themselves.
  • Service records: Avail all vehicle’s service and repair records allow the dealer to know its previous maintenance. A well-maintained car may get a reasonable price.
  • Proof of payoff: If the car was financed, bring proof that you completed its payment. If you haven’t completed its payment, show the remaining balance.

Final Thoughts

When buying a used car, come prepared to avoid delays at the dealership. If possible, call the dealership and have them detail to you the information in documents they’ll need. You don’t want to be caught unaware.