Thinking about getting a new car? There are several ways to go about it. Some brands allow you to buy online. You can also buy a car from a friend or family member. However, the majority of people go to dealers when buying their cars. One thing to know about the car-buying process is that you can’t just walk in like you are buying a TV. Before you get excited about where you are going to buy new tires, affordable auto glass, and get your sleek window tint, it’s crucial to ensure that you have all your documents and financial information in place.
Figure Out All the Paperwork Needed
There is lots of paperwork involved. You need to sign contractors, present legal documents, and go through regulations and registrations. As such, you must figure out what you need to buy a car from a dealer. Otherwise, you’ll be turned back, which makes the entire process longer. Let’s take a closer look at what do you need to buy a car from a dealer.
Updated Insurance Estimtates
When it comes to buying a car, you don’t only need to look for what the dealer needs. The dealer will need lots of documents from you, but you also need some information before you commit to buying a specific vehicle. One of the most important things you will need is an insurance estimate. This will give you a good idea of what it’s going to cost to insure your car, which makes it an important part of what do you need to buy a car from a dealer.
Talk to an agent and find out how much it might cost to insure the model you are considering. You can also use online insurance calculators. It will also give you an idea of how much you need to insure the car. Please keep in mind that insurance calculators just give you an estimate. The actual amount will be calculated when you have the car, and you want to take out a policy. Still, an estimate will give you a good idea of what to expect.
In fact, before you can drive off with your car, the dealership will need to see proof of insurance. So when asking yourself what do you need to buy a car from a dealer, remember to process insurance for your car. If this is your first car, you can purchase insurance online. You can also do it over the phone while you are at the dealership. The insurance provider will send the proof of insurance via fax. They can also email it over to your dealer.
A Valid Driver’s License
It’s impossible to drive away with a car from the dealership without presenting your driver’s license first. A driver’s license is needed not only so you can drive your car. You will also be asked for it as proof of identity for the financing agreements. Technically, you can also use your valid state ID. However, the dealer will not give you the car keys, so you can’t drive off until they see your license. Dealerships may be penalized if they sell a car to an individual without verifying that they are allowed to drive.
Proof of Residence
What do you need to buy a car from a dealer apart from your license? You should also produce your proof of residence when purchasing a car. This might seem like it’s not important, but that’s not the case at all. The dealership needs to know where you live so they can submit tax information and know how much state tax to charge. They also need to know where to send your vehicle loan statements. There are several documents you can use as proof of residence. These documents include utility bills, credit card statements, and title deeds in some cases.
Loan Preapproval
While it may not be mandatory to get a loan preapproved when you go to the dealership, it will definitely help. The only time you can choose to ignore that is if you are one of the few who buy their cars for cash. If not, then you may need to talk to your credit union or bank before you write up a purchase agreement. A loan pre-approval can serve as a bargaining chip that will help you secure better terms than the car dealership’s captive financing. At the very least, it will give you confidence that you can buy the car even if the dealer declines your application for financing.
Payment Method
When asking yourself what do you need to buy a car from a dealer, you obviously have to think about how you are going to pay. There’s not going to be any transfer of ownership until the payment method has been arranged and finalized. If you are buying the car for cash, this means you need to hand over a certified check or a bag loaded with money. If you are working through a lender or bank, you will still need to bring the full check for the value you owe. It’s also possible to finance a car with the dealership. In that case, you will need to make the necessary down payment and complete the financing contract. This is why pre-approval is a great idea. It can take a few days to get your payments in order and this can delay the transfer of ownership.
A Credit Card?
Well, we are not really suggesting that you can buy a car with a credit card. However, in some instances, a credit card can have better interest rates than some of the loans on the table. Or maybe you want to collect as many reward points as possible. Unfortunately, paying for a car with a credit card may not be possible. Well, at least not the full amount. This is because $5,000. This will probably be sufficient for a downpayment. If you still want to use a credit card to pay more than that, you may have to pony up an extra three percent to cater to the dealership’s merchant fees. This makes the transaction more expensive, and the lower interest rates won’t matter anymore.
Credit Report
You can’t think about what do you need to buy a car from a dealer without having thoughts of your credit report crossing your mind. When you are getting ready to buy a car, it’s crucial to figure out where you stand in terms of your credit history. This may help your more accurately make estimations of your payments in advance. In short, it will give you an idea of whether you have prime or subprime credit. If the plan is to finance the car through the dealership, the finance manager will pull up your credit report. It would be helpful if you already knew what your credit history is like. This will also give you a chance to clean up any problematic areas and avoid unpleasant surprises at the dealership. You can get one free credit report each year through the major bureaus (Experian, Equifax, and TransUnion.
Proof of Income
When you approach a dealer to buy a car, there’ll need more than just your word regarding how much you earn. If you want to apply for dealer financing, you should provide proof of income. This is an important part of answering the question of what do you need to buy a car from a dealer. The best way is to take with you a recent pay stub from your employer. You can also present your bank statements and W-2s. These are necessary if you have other sources of income apart from your job.
What if you are self-employed and you don’t have pay stubs? In such instances, you may have to get a copy of two years worth of tax returns. You should also get your 1099’s. This will be enough to verify that you earn enough to qualify for a loan.
References
It’s not always when you will be required to provide references. The only time when this might be necessary is when you don’t have a good credit score. In such instances, the dealer will need a bit more convincing to give you the financing deal. The reason why dealers ask for references is to see where there is someone who can vouch for your character. Such references are known as character references. This is done to mine for additional leads. They may also be exploring the possibility of having someone cosign your loan.
Discount/Rebate information
Do you qualify for some sort of discount or rebate? If so, your car purchasing process may have some additional steps. This means you should add to what do you need to buy a car from a dealer in such instances. Take your time to figure out whether there are specific documents you have that may be needed to prove you qualify for the rebate or discount. Salespeople don’t really keep track of all the incentives and rebates; therefore, if your discount or rebate is associated with your profession or linked to an organization, carry your proof of membership at least. If the promotion you are interested in was advertised through a flyer, take it with you as well. For manufacturer’s rebates, print the necessary documents or get a screenshot of the website.
Buying a Car Out of State
It’s not always when you will be able to find the car you are looking for locally. Sometimes you have to search elsewhere. Or maybe you just heard great things about a deal that operates a bit far from your location. There’s nothing wrong with buying a car out of state. But is the process of buying a car in your state the same as when you want to work with an out-of-state dealer?
Buying a car is pretty much the same everywhere. However, there are some nuances that make it a bit different across state lines. Therefore, the answers to what do you need to buy a car from a dealer may be a bit different when working with a dealer that’s out of state. To find out more about what you require for the specific state where your dealer is located, you may have to contact the DMV. There are probably not a lot of differences regarding what you need to provide the dealer. You will need the title from the seller once the transaction is complete. This is the only way you can transfer the car to your name when registering it in your home state.
Another thing you need to keep in mind when buying a car out of state is that you may need to pay all of the sales tax when you register the vehicle. You should also ensure that any smog checks and state inspections are performed. You won’t be able to complete the registration until these are done. As with anything, you need to ensure that you know exactly what you are getting yourself into before you sign the bill of sale. If you are buying a second-hand car from an auto shop, you should run the vehicle history report. This will ensure you don’t fall victim to cross-border scams like title washing.
If you are purchasing a second-hand car, then you may also want to invest in some auto inspection. An auto mechanic can check the car for you to see if there are any faults. You don’t want to buy a car today and be looking for transmission repair the next.
This should answer the question “What do you need to buy a car from a dealer?” It’s important to ensure you have all the documents and financial information required by dealers when you approach them. That way, you won’t have to experience unnecessary delays and drawbacks. Are you ready to purchase your car? Take time to research and be sure that the car you are going for is what you want and that it fits into your budget. Remember, your budget shouldn’t only factor in the initial costs but the running costs, as well. A car may be cheap to buy but very expensive to maintain. Therefore, look at the prices of auto supplies and auto parts for your chosen car, too.