Understanding What You’re Signing When You Buy a Car
Learn about the paperwork you’ll have to sign when you buy a car
You’ve found the car of your dreams, negotiated the price, and now it’s time to take care of the nitty-gritty paperwork. But it doesn’t have to be a long burdensome process. If you know beforehand what you’re expected to sign and what to look for, you can be in and out in no time flat. Here are some of the documents you’ll be expected to sign.
If you know beforehand what you’re expected to sign and know what to look for, you can be in and out in no time flat.
The Buyer’s Order
The first paper in the pile is the Buyer’s Order, which isn’t a final sales contract, but rather a summary overview of what both you and the lender have agreed to. It’ll list the price of everything related to the car—including base cost, sales tax, registration cost and dealer fees, a description of the exact make, model, style and color of the car, and the VIN (vehicle identification number). Remember, the buyer’s order doesn’t commit you to buying the vehicle, so if you have any questions or want to change anything about the terms of the sale or specifics about the car, this is the time to do it.
The Bill of Sale
The Bill of Sale is the official sales contract for your car. It’s a binding agreement between you and the seller and it records all of the necessary info. It doesn’t prove ownership (only a title transfer can prove ownership), but it records the transaction between the two parties and often includes the following info:
- vehicle type (motor vehicle, motorcycle or other vehicle including mopeds and scooters)
- specific vehicle info including: year, make, model, mileage reading and VIN
- seller’s and buyer’s name and address
- purchase price
- seller’s and buyer’s signatures and date
- other info necessary to document the transaction
It’s important to review the bill of sale carefully before you sign it, and make sure it accurately reflects your understanding of what you agreed upon. This is your last chance to review the agreement before it becomes legally binding and the car is yours.
Before you know it, you’ll be driving your new wheels off the lot.
Title and other documents
Once you sign the bill of sale, the dealership will provide you with the title to the car. After you both sign it, you’re officially the owner, and you’ll need this when you go to register your car. Also, state rules vary, but in some states you’ll also need an odometer statement and damage disclosure statement.
Although the paperwork may seem overwhelming, don’t let it intimidate you. Take your time, read through the documents carefully to make sure everything’s square, and before you know it, you’ll be driving your new wheels off the lot.