Buying a new car can be exciting and stressful. However, you can alleviate some of the stress by being prepared and having the necessary items with you when you go to the dealer.
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Here are some of the documents you should have on hand to streamline the car buying process:
- Your driver’s license. Although you should always have your license with you, it is especially important to have it with you when you buy a new car. The dealer will ask to see a copy of your driver’s license before you can take a test drive. Without it, you probably won’t be able to drive the vehicle.
- Proof of car insurance. Almost every state requires drivers to have auto insurance. When you visit the dealer, you will need to show your valid proof of insurance to purchase the car. Usually your current proof of insurance listing your current vehicle is sufficient. However, you may want to contact your insurance agent ahead of time to find out what you need to do to have your new vehicle added to your policy.
- Your preferred payment method. You can help speed up the process of purchasing a new vehicle by having your check, cash or loan ready before you walk into the dealership. However, if you finance your car through the dealer, you need to set aside time to fill out the necessary paperwork. You also need to have your down payment ready. Contact the dealer to see if they require additional documents for the financing process and see if they offer pre-approved financing.
- Discount/discount information. Many dealers and automakers offer special discounts and rebates for certain individuals, such as military members, students and recent graduates. If you want to take advantage of a rebate, you will need to provide documentation proving your eligibility.
Keep in mind that if you go out of state to buy a car, the requirements may differ from those of your state of residence.
For example, some states will require your new car to pass a smog test, emissions test, or safety inspection before you can drive it home. Contact the DMV of that state or go to its website to determine those requirements before you travel.
Tips to simplify the car buying process
In addition to the necessary documents, there are a few other steps you can take to simplify the car buying process:
- Get a car insurance quote. Before you go to the dealership, it helps to get an auto insurance quote for the vehicle you’re interested in. Factor the cost of insuring the car into your total budget so that it is not a surprise after you make your purchase. You will also want to ask your agent if there is a grace period for adding your new car to your policy. If not, you will need to add the vehicle to your current policy before you can drive off site.
- Get pre-approved for a loan. If you plan to finance the vehicle, contact your bank or credit union and get pre-approved for a loan. By applying for pre-approval, you’ll know what amount and what interest rates you qualify for. It will also help you stick to your budget. If you want to finance your purchase through the dealer, it still helps to get pre-approved by your bank. That way, you can use the pre-approval letter as leverage with the dealer to potentially get better loan terms.
- Make sure your documents are up to date. Before going to the dealer, double check that your driver’s license and proof of insurance are valid and up to date. If your license has expired, or if your car insurance policy is not active, you probably won’t be able to buy the vehicle and drive off the lot on the same day.
- Verify your payment method. It’s a good idea to confirm that the merchant accepts your preferred form of payment, especially if you’re not making your down payment in cash. Call the merchant ahead of time to verify which payment methods are acceptable to avoid any problems.
What to bring if you trade in your car
If you’re trading in your current vehicle, you’ll need additional documentation to speed up the process:
- Title. Your car title is needed to prove to the dealer that you own the vehicle you are trading in. If you can’t find your title, you can request a duplicate copy from your state’s DMV. Keep in mind that you will have to pay a fee for the duplicate.
- Vehicle registration. Don’t forget to bring a copy of your registration to the dealer when you trade in your vehicle. The dealer will usually accept an expired registration. However, if the registration is not current, the dealer can deduct the cost of renewing the registration from the car’s trade-in value.
- Service records. While the dealer will collect your trade-in’s vehicle history, it is helpful to provide service and maintenance records that may not be included in the report. You can also provide a Carfax report if you have one available, showing the car’s accident history, mileage, previous owners and a service history.
- Account number for your trade-in loan. If you still owe money on your trade-in, you must bring the loan account number with you. You can find this number on one of your payslips. You may also want to contact your lender to see if they have a specific process for handling trade-ins.
Before you trade in your vehicle, you should also make sure that the car is clean. The car doesn’t have to be spotless, but you do want to make sure you haven’t left any of your personal belongings in the car.
Go through the vehicle from top to bottom and make sure all your items are removed. It’s also a good idea to clean up any food wrappers, receipts, and other trash so the merchant doesn’t have to.
Finance & Insurance Editor
Elizabeth Rivelli is a freelance writer with over three years of experience covering personal finance and insurance. She has extensive knowledge of various lines of insurance, including auto insurance and property insurance. Her byline has appeared in dozens of online finance publications, such as The Balance, Investopedia, Reviews.com, Forbes and Bankrate.