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8 Legal Issues to Handle When Buying a Car

You’re just about to the point of buying a car, or maybe it is your very first car purchase!  It’s exciting, yes, but it is also a big step that requires you to take into consideration many aspects.

Nowadays, cars are much better and more reliable than they were years ago but believe me,  you’re going to be paying for it.  Even a decent used car can easily go for up to $20,000 these days, and for most people, that’s not mere pocket change

You want to protect yourself and your investment and save yourself some headaches. In other words, don’t go into this blind and do some research beforehand.

Here are some things to consider:

Driver’s license

Okay, this is a fairly obvious one, but you would be surprised by the number of people who do operate a motor vehicle without a license.

If you get caught, which is highly probable, you will have to pay a hefty price in fines; be prepared and respect the law by acquiring your driver’s license beforehand or as soon as you buy your new vehicle.

Dealer or private seller

8 Legal Issues to Handle When Buying a Car

This is a big one because there are pros and cons for each.

When you buy a vehicle from a private owner, you’re probably going to spend considerably less money. But the downside is, that it will always be an “as is” deal, which doesn’t give you much legal recourse if something goes wrong.

The car might stop working the moment you try to drive it away, and there won’t be too much that you can legally do about it. So keep this in mind when trying to save money.

Then, there’s the dealership side of things. If you’re buying a brand new car from an agency, you won’t have such issues, because the car will be under the manufacturer’s warranty. But when you’re buying a used car from a dealer, you need to be a little cautious, because the car might have imperfections or a mechanical malfunction.  Remember, there’s a reason people crack a lot of jokes about used car salesmen, after all.

Now, most used-car dealers are reputable and governed by some form of state law, but you have to watch your step.

Some used-car dealerships work with insurance claim cars which they buy for a low price, then they repair and resell them for a higher price.  The hitch here is that they don’t always tell the customer that three months ago this car was wrapped around a tree.

In a case like that, not all problems are revealed and you could end up with a car with a bent frame for example, which will cause problems down the road.

Know your rights

When buying a car it is important to know exactly what your rights as a buyer are in your state. Some states have what is known as a “lemon law”, this means that you have the right to return a car for a full refund if a problem occurs within a certain period.

Lemon laws help protect the consumer from unsavory salespeople who may not fully reveal all of a car’s problems to the buyer.  A lemon law also overrides any limitations a dealer may place on a used car’s guarantee or warranty.

But these laws vary from state to state; they might apply only to the dealer, and other times they might include the private seller, as well.

Your best bet here is to check with your state’s DMV, or ask a lawyer and if you have additional questions.

Title and licensing

Registering your car’s title under a new ownership is fairly straight forward because all states have a standardized procedure for registration.

Nonetheless, when you are buying a car make sure that the person who sells it – and who signs the title over – is actually the person whose name appears on the title.  You also want to check to make sure that the title is signed in the proper places.

Another aspect that can easily be overlooked is matching the vehicle identification number or VIN that’s on the title to that on the actual car. If the VIN on the title isn’t the same as the one on the car, walk away, because you will have big trouble if that car is ever stolen or if an observant police notices.


Now it’s time to consider which insurance you will be needing.

It is a requirement in almost every state now, that all drivers have an Auto Insurance. Some states even require it at the time of registration.

You’ve got to decide what type of insurance is right for you.  You can have the minimum coverage required which is normally $25,000/$50,000 in liability.  The problem here is that $25,000 doesn’t go too far today, especially in a major accident.

When thinking about Auto Insurance, also think about all the legal obligations and costs involved if you were to have serious injuries involved.

In these cases, you can almost always expect some kind of legal action. That’s why we recommend you to think if that is a risk you want to take, if not,  then you want to have an insurance coverage high enough to handle any possible lawsuits.

You must also consider the replacement of your car if it gets totaled. The minimum required insurance is liability coverage, meaning it only covers the other driver’s expenses if you’re responsible.

If you’ve got a car worth more than a couple thousand bucks, you may just want to spend the extra money for a comprehensive insurance that will also cover your car’s repairs or replacement.

If you buy from a dealership and finance the car, the car will already be required by the lienholder to be covered with comprehensive insurance.

State driving laws

You also want to make certain that you know all of your state’s traffic laws before you buy your first car and begin driving it.

It is actually pretty surprising how many drivers do not know all of the laws and find themselves in a position of being ticketed.

The last thing you want to do as a driver racks up tickets.  It costs you more money in fines and raises your insurance price.


This might not be the topic you want to put in your head, but it is better to be prepared since the chances of dying in a car accident are real. The reality is that it is best to plan ahead so that in the event of a tragedy you don’t make it even harder for your loved ones.

Plan ahead with the necessary legal documents spelling out your beneficiary in case that a tragedy happens. You want to have things covered, ask an attorney about the legal procedures you must leave done, topic save your family more inflicting steps.

What to do in the event of an accident

8 Legal Issues to Handle When Buying a Car

There’s an old expression- “loose lips sink ships” and it is never truer than when a person gets into an accident, even just a little fender bender.

A person doesn’t want to jump right in and volunteer information that can only be used against them later.  Don’t take responsibility quite yet, even when you do feel that the accident was your fault.  You could be legally wrong after all, so let the police sort this out and decide for themselves.

A good example of this would be a car sliding on ice into another lane, causing an accident. The driver that slid could just assume that they are at fault, but the police may very well view it as a no-fault accident caused by bad road conditions.

In a nutshell, once a person takes responsibility for an accident – even if later they find out it wasn’t really their fault – they’ve opened themselves up to possible costly repairs and increased insurance costs that they were not even liable for.

All you want to do in the event of an accident is first, make certain that all parties involved are safe, and then exchange insurance information with the other driver. You can also consult with a car accident attorney.


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