Laws Regarding Used Cars

Buying a used car usually involves risk, and trusting the person selling the car is not always the best option. There are many laws regarding used cars and their sale. Keeping these laws in mind will help keep you from getting swindled and left with a lemon with no recourse to get your money back. It is always a good idea to buy used cars from a dealer, but if you choose to buy from a private seller, there are things you should consider.

Licensing

All states require a license to sell used cars as a business. There are laws against non-licensed car salesmen from selling more than a couple used cars per year. One method some used car sellers use is called curbstoning. Curbstoning is a practice in which the seller puts the car on the street, away from their home or place of business, to reduce the connection between them and the car they are selling. While these cars might sell for a cheaper price than those at a dealership, the likelihood of something going wrong rises, and if something does go wrong, the person who sold it is much harder to locate. Violating the law against curbstoning can result in fines of up to $3,000 per violation.

Registration Laws

Each state has its own laws regarding the sale, registration and titling of used cars. Some states require the seller to give valid registration, while others do not require this. You should ask your Department of Motor Vehicles what is required in your state. Transferring a valid title is always necessary in order to take ownership of a vehicle. Titles need to be signed and notarized before they can be filed and the car legally put in the buyer's name. Making a mistake on the paperwork can cause a delay in the transfer of the title, so it is important to carefully read everything, and fill out all the paper work correctly and accurately.

Receipts

Many states require a bill of sale for a used car. Laws regarding used cars usually require a receipt that shows the exact sale price of the car. The buyer should get the original receipt, and the seller keeps a copy for himself. This is especially important in cases of fraud; if you find out your used car is no good, your receipt should provide a way to seek compensation for the faulty car.