How do I buy an out of state car from a private seller?

wonderpug

I live in New Mexico, and there's a car I want to buy in Colorado from a private seller. I'm planning to fly one-way to the seller's location to do the exchange.

Other than getting the car title and a bill of sale from the seller, what do I need to do on the DMV side for the two states? Can I just take it home and register it in New Mexico, handle all that kind of stuff there? Or do I need to do a bunch of paperwork with the Colorado DMV first before I'm allowed to drive off with it, then also do more stuff on the New Mexico DMV side?

mRahmani

It's going to vary state to state, but I'll run you through my experience of buying a Tahoe in Missouri to register in Michigan. It's not nightmare-ish by any means, but it will involve a bit of legwork on your end to get everything wrapped up neatly.

1) Does the car have an existing lien against it? The Tahoe I was buying had $9,000 owed on the lien, and our agreed sale price was $15,000. To buy it, I got two checks from my credit union: one for $9,000 to cover the lien payoff balance, and one for $6,000 to the seller to cover the remaining value. You will want to meet the seller at a branch of the bank that holds the lien, so they can accept the check and clear the lien there. Depending on the bank, this may still take a few business days while they verify the check will successfully clear.

For me, it took about 2 weeks before the seller's bank verified the funds, released the lien, and mailed out the paperwork confirming that the lien had been released. This meant the truck had to sit in my driveway for two weeks before I could go register it in my own state. Make sure to ask the bank to get the lien release statement mailed to your address - and they may or may not agree to this. If they refuse, you'll have to wait the additional time for the lien release to get sent to the seller, and for them to turn around and send it off to you.

This is, by far, the most stressful part of the operation.

2) Misc. Paperwork

One you get title/lien issues out of the way, the rest is fairly straightforward. To register the vehicle in your own state, you just need the signed title and, if applicable, a lien release form. (If there's no outstanding loan against the vehicle, no lien release needed.) You will probably not need a separate bill of sale, but I would write one up regardless. You will then pay sales tax on the vehicle in your own state as well as any registration fees.

The seller may or may not be required to do anything. In my case, the seller was required to detach a "Seller" section at the bottom of the title and report the sale to his state DMV, but didn't need anything from me other than my signature and information on that form. Anything having to do with the other state's DMV is most likely going to be the seller's responsibility and not yours.

Jasconius

hmm. from an unknown seller you might want to follow Rahmani's invoice on the lien thing. That's a real problem that can ruin your week if they sold you the car without the legal right to

I did this once remotely, and really the only thing is make sure the seller completely and fully fills out the title transfer form. then you take that to your state DMV and they can take it from there

In Florida (and perhaps all places) you'll be expected to pay the taxes on the purchase. If the car is valued significantly apart from its KBB value, then the state may follow up with you and demand proof that the car was valued as such

in my case, I bought a van with a dead engine, and I had to prove to the state that it was indeed busted and therefore below market value

L Ron Howard

Also, check to see specifically what NM has you do.
For instance, in Ohio, the license plates stay with the previous owner of the car. So you have to take the title to the Ohio DMV to get temporary plates while it's being retitled in another state. Who knows what kind of oddities that NM will have you do that other states don't?

wonderpug

Thanks, all! Much appreciated.