Buying Summary

If you are buying a vehicle from a private party, you have to make sure that payment is made and the title and registration are properly transferred. You also need to make sure you have insurance for the vehicle you just bought before you drive it away.

When you buy a vehicle from a private party, you will probably be asked to pay with a cashier's check or in cash. But before money changes hands, request the title (sometimes called the "pink slip") and have it signed over to you. Rules governing vehicle registration and licensing vary from state to state. Check with the DMV in your state (much of this information is now available on DMV Web sites).

You should inspect the vehicle before you take possession of it. If any repair work is required, and has been promised by the dealer, get it in writing in a "Due Bill." Make sure the temporary registration has been put in the proper place.

If you are at a dealership, you still have to go through the finance and insurance (F&I) process. Also, the F&I person will probably try to sell you a number of additional items: an extended warranty, alarms or anti-theft services such as LoJack, prepaid service plans, fabric protection, rust proofing and emergency roadside kits.

Some people swear by extended warranties, so this is something you might want to consider (unless your used vehicle is certified or still under the manufacturer's warranty). However, the other items typically sold in the F&I room are expensive and hold little value for you.

The F&I person may seem like a financial advisor, but he or she is really an experienced salesperson. Some F&I people can become very persistent trying to sell these items. Be firm. Say, "I'm not interested in any aftermarket extras, thank you. I just want the vehicle."

Once the contract is ready, review it thoroughly. In most states, it will contain the cost of the vehicle, a documentation fee, a smog fee, a small charge for a smog certificate, sales tax and license fees (also known as DMV fees). Make sure you understand the charges and question the appearance of any significant, sudden additions to the contract.

Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used vehicle.