What You Need to Buy a New Car

Buying a car is a major purchase for most people. Money aside, each state has special laws that apply to car purchases with which you must comply. Apart from identifying your needs, desires and budget, buying a new car requires both money and paperwork before you can drive away in your new wheels.

Money

Like anything else you buy, you need money to buy a car. Many people use car loans to purchase new cars, obtaining the loan either through the dealership, their bank or another lender. The loan allows you to pay the full purchase price to the seller and then make periodic payments to your creditor. When you pay for a car in cash, you use your own funds to pay for the vehicle without getting a loan. However, the term "cash" is a misnomer, as you usually need to pay with a personal check or cashier's check from your bank.

Registration

When you buy a new car, you must register it with the state motor vehicles department. To register a vehicle, you must typically take the car to a motor vehicle office and pay any applicable registration and tax fees. You must also prove that you have the adequate amount of liability insurance. Registration and insurance requirements differ between state to state.

Bill of Sale

Buying a car usually involves a bill of sale, a legal document that officially records the names of the buyer and seller and the kind of car sold. Bills of sale must be recorded by a public notary. A notary serves to officially recognize the document and identify the parties who sign it. Public notaries are licensed state officials that are the only ones who can notarize a bill of sale.

Title

A car, unlike a television, computer or other piece of personal property, must have a title. A title is an official record that indicates who owns a car and whether there are any liens or encumbrances on the vehicle. When you buy a car, you must be able to obtain title through the vehicle. In most car sales, you obtain title from the seller when the seller writes your name on the back of the title as buyer.