Purchasing a vehicle is a major decision that requires careful consideration and obeying various regulations. In California, state-specific rules must be followed to ensure a legally compliant car purchase.
California law mandates specific requirements like smog testing and mileage reporting that must be met to transfer the title and to drive the vehicle on the road.
Additionally, comprehending California's distinct car-buying policies can empower buyers to make informed choices. For example, the state offers consumer protections like the Lemon Law to safeguard against defective vehicle purchases.
By knowing their rights and legal options, buyers can confidently navigate the car-buying process in California and avoid potential issues later on.
What Is the Process for Buying a Car in California?
In California, the intricacies of buying a car extend beyond the mere act of negotiation and payment. Legal mandates dictate that buyers fulfill certain obligations outlined by the California Department of Motor Vehicles (DMV) to ensure a smooth and lawful transaction.
Whether the transaction occurs at a dealership or involves a private party, it is essential to familiarize oneself with the specific nuances accompanying the car-buying journey in the state.
Buying a Vehicle from a Private Seller in California
When considering the purchase of a car from a private seller in California, buyers must familiarize themselves with the legal procedures involved. These include:
Title Check
Conducting a thorough title check is of utmost importance when purchasing a vehicle from a private party in California. This critical step safeguards buyers against potential fraud and undisclosed issues and provides them peace of mind throughout the transaction.
To conduct the title check process, buyers should request the seller to provide them with the California Certificate of Title. This document is official proof of ownership and must accurately show the seller's name without any discrepancies or red flags.
If unsure about the authenticity or accuracy of the California Certificate of Title, seek assistance from the CA DMV.
Obtain Vehicle History Reports
Buyers are highly recommended to obtain a Vehicle History Report (VHR) when purchasing a vehicle from a private party in California.
A VHR provides comprehensive information about a vehicle's past. It documents ownership history, odometer readings, and major issues such as total loss, salvage titles, recalls, etc. By reviewing this report, buyers can gain valuable insights to help them make informed decisions and mitigate potential risks associated with a used vehicle purchase.
To obtain a VHR, buyers can utilize the Vehicle Record Request service provided by the CA DMV. This online service requires a CA DMV account, so be prepared to create one. Also, this service has a $2 fee with an additional 1.95% processing fee for debit/credit transactions. There are no extra charges if directly paying with a bank account.
To complete the VHR request, buyers will need the Vehicle Identification Number (VIN) of the vehicle they are interested in. The VIN serves as a unique identifier and allows the CA DMV to retrieve the relevant information about the vehicle's history.
Odometer Mileage Report
An odometer mileage report plays a crucial role in the success of purchasing a vehicle in California. This report serves as a mutual agreement between both the buyer and seller regarding the vehicle's recorded mileage at the time of sale.
Buyers, in particular, can heavily rely on this report to assess the vehicle's actual condition. It is a reliable source of information for evaluating the vehicle's wear and tear, determining its overall value and assessing the accuracy of any mileage claims. Besides that, the CA DMV needs it for a smooth and successful vehicle title transfer.
Note that this requirement particularly applies to vehicle transfers that happen on or after January 1, 2021, involving vehicles that are less than 20 model years old.
Smog Certificate
When purchasing a used vehicle from a private party in California, buyers must obtain a valid smog certification from the vehicle's seller.
Purchasers need to confirm the seller has scheduled a smog inspection and received the certificate before finalizing the sale. Without a smog certificate in hand, the buyer will not be able to register the vehicle in their name with the CA DMV.
If the vehicle fails the smog check, the seller is responsible for any repairs needed to pass reinspection and provide the buyer with a valid certificate.
Note that certain vehicles are exempt from this rule. These include:
- Electric vehicles
- Gasoline-powered vehicles less than eight model years
- Vehicles powered by natural gas and weighing over 14,000 pounds
- Diesel-powered vehicles manufactured in 1997 or older or vehicles with a Gross Vehicle Weight of over 14,000 pounds
- Gasoline-powered vehicles manufactured in 1975 or older
Title Transfer
An accurate and up-to-date California Certificate of Title is crucial for establishing ownership of a car purchased from a private party in California.
For a successful title transfer, the following items are required:
- Either the California Certificate of Title or an Application for Replacement or Transfer of Title (REG 227) if the original title is missing
- Signatures of the seller(s) and lienholder (if applicable)
- Signatures of the buyer(s)
- Payment of the transfer fee
To complete the title transfer process, the required paperwork, along with the applicable fee, can be submitted in person at a local DMV office or sent by mail to P.O. Box 942869, Sacramento, CA 94269
Registration of Purchased Vehicle
Once the title transfer is complete, the buyer or the new owner must initiate the registration process for the purchased vehicle with the CA DMV. This crucial step officially establishes the car under the buyer's ownership and ensures compliance with state regulations.
To register the purchased vehicle, prepare the following:
- Vehicle title, commonly known as the pink slip with the seller's signature
- Application for Replacement or Transfer of Title (REG 227) Form if the title is lost, stolen, or damaged
- Bill of Sale if the seller is not the registered owner whose name appears on the title (signed by both the seller and the buyer)
- Odometer mileage report for vehicles less than ten years old
- A signed Vehicle/Vessel Transfer and Reassignment (REG 262) form if the title has no space for mileage information (only available in DMV offices)
- Smog Certification
- Payment of applicable fees and use tax
The paperwork mentioned can be mailed to the CA DMV or submitted in person to a CA DMV field office. Note that buyers have a 10-day window after the purchase to register the vehicle's ownership from the seller to themselves. At the same time, sellers must report the transfer of ownership to the CA DMV within five days of the sale.
Buying a Vehicle from a Licensed Dealer in California
Buying a vehicle from a licensed dealer in California is like having a trustworthy ally. These dealerships follow state rules which signifies that a buyer is safe when making transactions with them compared to a private seller.
To guarantee a seamless transaction, it is imperative to adhere to specific procedures when buying from a licensed dealer in California. This includes conducting thorough research on the dealer's credentials, understanding legal rights as a buyer, and verifying the terms of any warranties offered.
By following these procedures diligently, buyers can confidently navigate the car-buying process and secure a reliable vehicle from a reputable dealer.
Licensed Dealer Check
Checking if a dealer is licensed is crucial when purchasing a vehicle in California. This not only guarantees legality but also provides consumers with certain protections and recourse in case of disputes or issues with the purchase.
To verify a dealer's legitimacy, individuals can utilize the CA DMV's Occupational License Lookup (OLL) tool. When using this tool, users must first select the appropriate business category, in this case, "vehicle dealer." Then, they must input specific information, such as the business name, address, city, zip code, and license number.
Buyer's Guide
The Federal Trade Commission (FTC) issues a Buyer's Guide to inform buyers considering purchasing a vehicle from a licensed dealer in California.
The Buyer's Guide outlines the vehicle's condition and provides crucial information, such as whether the vehicle is sold "as is" or with a warranty, the duration and coverage of any warranty offered, and specific terms and conditions.
Furthermore, it highlights essential aspects like the dealer's responsibility for repair costs and other applicable return policies.
Car Buyer's Bill of Rights
Aside from the Buyer's Guide, the Car Buyer's Bill of Rights holds significant importance for buyers seeking to purchase a vehicle from a licensed dealer in California.
Buyers should familiarize themselves with this statewide regulation for several compelling reasons.
Firstly, it mandates financial transparency. Dealers must provide a detailed breakdown of the costs associated with the purchase, including warranties and insurance.
Secondly, the Bill of Rights requires dealers to disclose the buyer's credit score and explain how it impacts financing options. Buyers gain valuable insight into the factors influencing their eligibility and can negotiate more favorable terms if necessary.
Lastly, the Car Buyer's Bill of Rights establishes specific requirements for used cars advertised as "certified." Dealers must thoroughly inspect these vehicles and provide buyers with a copy of the inspection report.
This law does not apply to off-highway motor vehicles and motorcycle transactions. For more details about this law, visit the Car Buyer's Bill of Rights page on the CA DMV official website.
Warranties
Customers should know their warranty options when getting a vehicle from a dealership.
In California, new vehicles are typically sold with an extended warranty. The vehicle manufacturer provides this and covers specific repairs as outlined in the terms of the warranty.
Additionally, dealers may offer customers an additional written service contract for a fee. This contract, known as a service contract or extended warranty, is a separate agreement between the customer and the dealer. It specifies that the dealer will be responsible for repairing or covering the costs of some mechanical issues.
Customers should carefully review the terms and conditions of the manufacturer's warranty and the dealer's service contract. Paying close attention to what is covered, what is not covered, and any limitations or restrictions will help customers avoid surprises or misunderstandings regarding their warranty coverage.
Lemon Law in California
The California Lemon Law is a powerful legal protection that ensures consumers are not left stranded with defective vehicles. This law provides a safety net for individuals who purchase or lease new or used vehicles with persistent defects that impair their use, value, or safety.
Under the California Lemon Law, manufacturers are obliged to repair or replace a defective vehicle within a reasonable number of attempts or a reasonable period. If they fail to do so, consumers are entitled to a refund or replacement.
To be considered a lemon, a vehicle must meet the following conditions:
- The issue initially arises within 18 months of delivery or before reaching 18,000 miles
- If stipulated by the warranty or owner's manual (the buyer must have notified the manufacturer about the problem.)
- If the vehicle is repaired by the manufacturer or its agents:
- Four or more times for the same problem, and it remains unresolved
- Two or more times for the same problem, if that problem has the potential to cause death or serious injury, and it remains unresolved
- The vehicle remains out of service for repairs for over 30 days, which do not need to be consecutive
Note that the law applies only to vehicles with manufacturer warranties. It covers many vehicles, including cars, trucks, motorcycles, and recreational vehicles.
What Are the Fees for Buying a Car in California?
When buying a car in California, it's vital for buyers to factor in various additional fees for effective budgeting.
Whether purchasing from a dealership or a private seller, buyers will face extra expenses on top of the vehicle's price tag. These typically involve the necessary sales tax and the California Highway Patrol (CHP) fee. Additionally, purchasers may encounter costs such as registration fees, title transfer fees, or, if applicable, smog check fees.
Thus, buyers must acquaint themselves fully with the following expenses before completing their purchase or registration through the CA DMV.
Sales Tax
The statewide sales tax rate for new and used vehicles in California is 7.25%. However, specific regions may surpass this figure due to additional district taxes.
For buyers to learn about the sales tax rate in a specific address, utilize this online look up rate service provided by the California Department of Tax and Fee Administration (CDTFA).
Registration Fee
The current registration fee for all vehicles in California is $74.
Title Transfer Fee
When transferring the title of vehicles in California, a $15 fee applies.
Smog Transfer Fee
If the vehicle involved in the transaction is four or fewer model years old, a smog transfer fee of $8 is required. This fee is collected from the new owner.
California Highway Patrol (CHP) Fee
When registering a vehicle in California, a $32 fee to the CHP applies.
Besides the mentioned fees, there are other additional fees that may apply when buying a vehicle in California. For more details about these fees, check the Registration Fees page on the official CA DMV website.
What Are the Insurance Requirements for Vehicles in California?
In California, all vehicles operated or parked on public roads must have insurance. Proof of insurance must be readily available at all times, especially when requested by law enforcement officers, during registration renewal, or during traffic accidents.
The minimum insurance coverage in California is as follows:
- $15,000 to compensate for the injury or death of a single individual
- $30,000 to compensate multiple individuals injured or killed
- $5,000 to compensate for any property damage
If these insurance requirements are not met, the vehicle may not be operated or parked on public roadways, and its registration may be suspended.
Can a Non-Resident Buy a Car in California?
It is possible for a non-resident to purchase a car in California. However, certain restrictions apply.
The vehicle must be registered in the owner's place of residence and should display valid license plates issued by that particular state. The owner may also need to pay local sales tax.
If a non-resident owner lends, leases, rents, or provides the vehicle to a California resident for regular use on California highways, the car must be registered in CA DMV within 20 days after the resident starts using it in the state.