When individuals decide to purchase a vehicle in Alabama, they must acquaint themselves with the specific regulations that govern the buying process in the state.
As per Alabama law, anyone acquiring a new or used motor vehicle must obtain a license plate within 20 calendar days from the date of acquisition. Additionally, to register a car, a title application must be completed before proceeding with the registration process.
Moreover, Alabama law provides certain rights to individuals who purchase defective new cars. These rights extend for one year after the date of purchase or for the first 12,000 miles driven, whichever comes first.
Thus, buyers in Alabama must thoroughly understand their responsibilities and rights when buying a new or used car. With this knowledge, they can make informed choices and confidently approach the purchasing process.
What Is the Process for Buying a Car in Alabama?
In Alabama, the car buying process generally differs depending on whether the purchase is made from a private seller or a licensed dealer.
The Alabama Motor Vehicle Division (MVD) of the Department of Revenue (DOR) is committed to empowering customers with the necessary knowledge and resources to navigate this process successfully. They ensure that customers know their rights and protections throughout the car-buying journey, whether dealing with a private seller or a licensed dealer in Alabama.
Buying a Vehicle from a Private Seller in Alabama
Buying a vehicle from a private seller in Alabama has advantages and disadvantages.
One benefit is the potential for a lower purchase price compared to dealerships. However, there are risks involved, such as the lack of a warranty and the possibility of mechanical issues or hidden problems. Additionally, private sellers may not provide the same documentation or disclosures as dealerships.
Thus, buyers must exercise caution and consider the following to make an informed decision when purchasing from a private party.
Title Verification
In Alabama, title verification is necessary to protect consumers from fraud and ensure vehicle safety. The National Motor Vehicle Title Information System (NMVTIS) is vital in this process.
It allows the titling agency to quickly and accurately verify the information on the paper title by comparing it with the electronic data from the state that issued the title.
The primary purpose of NMVTIS is to prevent fraudulent activities and the resale of stolen vehicles. By instantly cross-referencing the information, NMVTIS helps identify any discrepancies or potential issues with the title. This system serves as a valuable tool for law enforcement in deterring and preventing title fraud and other related crimes.
Ultimately, title verification through NMVTIS ensures that buyers in Alabama can have confidence in the authenticity of the vehicle's title, which enhances consumer protection and promotes the overall safety of the automotive market.
Vehicle History Reports
In Alabama, buyers can utilize the "Check the History of a Vehicle" service provided by the NMVTIS to obtain an NMVTIS Vehicle History Report. This service allows individuals to gather important information about a vehicle's history.
The NMVTIS Vehicle History Report is intentionally designed to be concise and often shorter than other vehicle history reports. It focuses on five key indicators, including the title's current state and the date of the last title, brand history, odometer reading, total loss history, and salvage history.
By obtaining an NMVTIS Vehicle History Report, consumers can identify any potential safety concerns associated with a vehicle. If a car has a history of branding, total loss, or salvage, the consumer is alerted that the car may be unsafe.
For examples of NMVTIS Vehicle History Reports, individuals can visit the webpages of approved NMVTIS data providers.
When obtaining an NMVTIS Vehicle History Report, anticipate a cost of around $4 per report.
Vehicle Identification Number (VIN) / Ownership Documentation Inspection
Buyers should be aware of the Vehicle Identification Number (VIN)/Ownership Documentation Inspection process when purchasing a car from a private seller in Alabama.
In cases where a certificate of title is not required and only a registration is issued, the licensing official or their appointed deputy must inspect the vehicle before issuing a registration whenever there is a change in ownership.
This inspection is necessary, along with submitting appropriate ownership documentation, such as a court order, bill of sale, properly assigned certificate of origin, or any other documentation specified by the AL DOR.
To facilitate the inspection process, complete the Inspection Form and submit it to the local licensing official or AL MVD office. This form allows a licensing official to designate a deputy who can physically inspect a motor vehicle when the owner is unable to bring it to the official for inspection.
Odometer Disclosure Statement
When buying a car from a private seller in Alabama, buyers must understand the odometer disclosure requirements. These regulations protect buyers from potential odometer fraud and ensure transparency of vehicle mileage.
The Federal Truth in Mileage Act of 1986 mandates that sellers accurately disclose the odometer reading during ownership transfers. Failure to comply or providing false information can result in significant fines and even criminal charges.
In Alabama, certain vehicles are exempt from these disclosure requirements, such as cars that are 10 model years old or older, vehicles weighing over 16,000 pounds, and non-self-propelled vehicles like trailers.
However, for vehicles that do require odometer disclosure, the seller must complete an Odometer Disclosure Statement and submit it to the appropriate Alabama MVD office along with the ownership transfer paperwork.
Buyers should carefully review the odometer reading and disclosure statement provided by the seller. If there are discrepancies, seek professional assistance or reconsider the purchase.
Ownership Transfer
Understanding the ownership transfer process is crucial when buying a car from a private seller in Alabama. The buyer and seller must properly complete the transfer of ownership section on the vehicle's title and fill out an Application for Replacement Title.
The buyer must bring the completed application, the original title, their driver's license, proof of residency, proof of Alabama auto insurance, and payment for applicable fees and taxes to the county issuing officials where they reside.
Make sure to accurately fill out the VIN, sale price, odometer reading, and date on the title transfer forms. Every person listed as an owner on the original title must sign and print their name for the sale to be valid.
If the buyer wishes to have multiple names on the new title, all parties must sign and print their names on the application. Note that Alabama does not allow more than two owners to be named on a vehicle title.
License Plates and Registrations
To register a vehicle in Alabama, the buyer must initially complete a title application. Once the title transfer is successful, state law mandates obtaining a license plate for a new or used vehicle within 20 calendar days from the acquisition date.
Owners can register their motor vehicles and obtain license plates at the license plate issuing office based on their county of residence.
For assistance in obtaining other necessary forms or requirements when registering a car in Alabama, call the state MVD at 334-242-9000.
Bill of Sale
While the state of Alabama does not legally require a bill of sale, some counties may require it to complete a private sale. According to the AL DOR, a valid Alabama vehicle bill of sale should basically include:
- Purchaser and seller details and signatures
- Date of the sale
- A complete description of the vehicle, including the VIN
- Purchase price
Although a bill of sale does not establish legal ownership of the vehicle in Alabama, it proves that a consensual vehicle transfer occurred between the buyer and seller. In any legal disputes or challenges regarding the transaction, a properly executed bill of sale can act as crucial evidence supporting the agreed-upon terms and conditions.
Buying a Vehicle from a Licensed Dealer in Alabama
When buyers choose to purchase a vehicle from a licensed dealer in Alabama, they can enjoy numerous benefits that set it apart from buying from private sellers.
One notable advantage is that the dealer takes care of most of the necessary paperwork related to the vehicle title when buying a new car. In addition to handling the paperwork, licensed dealers provide buyers with valuable legal protections, warranties, and financing options.
Buying from a licensed dealer offers peace of mind and ensures compliance with state regulations, even though certain processes, such as vehicle registration and documentation requirements, may be similar to purchasing from a private seller.
Still, to make the most of these advantages, buyers should take note of the following:
Licensed Dealer Check
All used and new motor vehicle dealers must be licensed in Alabama, excluding trailers not subject to titling. As stated in Section 40-12-391 of the Code of Alabama, this legal requirement ensures that all dealers operating in the state are designated agents of the Alabama MVD.
Buyers should note this information when considering purchasing a car from a dealer in Alabama. It is essential to verify that the dealer is licensed and meets the licensing requirements outlined in the state's code.
To determine if a dealer is licensed, buyers can call the Alabama MVD directly or visit their nearest local licensing office. The MVD maintains a comprehensive system that lists all licensed dealers operating within the state.
Buyer's Guide
When purchasing a vehicle from a dealer in Alabama, buyers should familiarize themselves with the Buyer's Guide, a requirement set by the Federal Trade Commission (FTC). Dealers must prominently display this guide for every used car they sell.
The Buyer's Guide must contain the following:
- Details on the vehicle's major mechanical and electrical systems
- Recommendation to have an independent mechanic inspect the car
- Suggestion to obtain a vehicle history report
- Potential issues to be aware of
- Whether the car is sold "as is" or with a warranty
- Percentage of repair costs the dealer will cover
- Advice to obtain written promises from the dealer
- Dealer's contact information and complaint contact
- Warning that verbal promises may be difficult to enforce
- Right to request a Spanish version of the Buyer's Guide
Warranties
A warranty is a dealer's promise when buying a car in Alabama. It assures that the dealer will fix certain types of problems or cover the costs of repairing them. Before purchasing, inquire about any warranties and have them documented in writing. This ensures clarity and avoids any misunderstandings.
It is crucial to fully comprehend what the warranty covers and how long it remains valid. If the dealer refuses to provide a written warranty, it is best to find another dealer who is willing to stand behind their words. Always insist on getting all promises in writing before signing any agreements.
If a car is sold "as is," it means there is no warranty of any kind. Any issues that arise after the purchase become the buyer's responsibility. The dealer is not obligated to fix the problems or provide a refund. However, legal assistance may be necessary if there was fraud or the car was excessively defective from the start, even in an "as is" sale situation.
If the dealer provides false information, there may be grounds for a claim against them. However, simply stating that the car is "good" is unlikely to hold up in court. To avoid potential disputes, have written documentation that aligns with the dealer's words about the car.
Lemon Law in Alabama
In Alabama, the Lemon Law protects buyers from vehicles with recurring defects, but it doesn't cover vehicles weighing 10,000 pounds or more.
To be eligible for lemon law protection, the vehicle must meet specific criteria. It must have undergone three unsuccessful repair attempts or been out of service for 30 calendar days. The coverage period extends for one year from the purchase date or until the vehicle has been driven for 12,000 miles, whichever comes first.
If these conditions are met, possible remedies under the Lemon Law include vehicle replacement, refunds, cash compensation for diminished value, and other incidental or consequential damages.
If someone believes their vehicle qualifies as a lemon, they should initially report the issue to the car dealership or manufacturer. If the matter remains unresolved, a complaint can be filed at Alabama's Office of the Attorney General. The individual must provide receipts from their purchase and repairs, along with documentation of their attempts to resolve the issue.
What Are the Fees for Buying a Car in Alabama?
When purchasing a car in Alabama, there are various fees usually due at the time of purchase or vehicle registration. Here are the typical fees:
Sales Tax
Alabama's base sales tax rate is 2% on vehicles, including new and used cars, trucks, motorcycles, and trailers.
However, the actual tax rate can vary based on the county and local taxes in the buyer's area. For example, some counties may add a 1-2% tax on top of the state rate.
Title Fee
Buyers must pay a $15 fee to apply for an Alabama certificate of title for their newly purchased vehicle.
Registration Fee
The cost of vehicle registration varies depending on factors like the vehicle type (car, truck, motorcycle), weight, and applicable county surcharges.
As a general guideline, passenger cars and pickup trucks typically range from $23 to $105, while motorcycles have a flat fee of $15.
Documentation Fee
Dealerships may charge a documentation fee for processing the paperwork related to the sale. This fee can vary between dealerships.
Buyers may also encounter other fees, such as charges for new or customized license plates, lien recording fees (if financing the vehicle), vehicle inspection fees, insurance-related fees, service or handling fees, and other dealer fees.
For more specific information on the applicable fees, buyers can contact the Alabama MVD, their local licensing office, or the respective licensed dealership they are purchasing from.
What Are the Insurance Requirements for Vehicles in Alabama?
In Alabama, vehicle owners must have liability insurance coverage before registering their vehicles. This insurance requirement protects drivers and ensures adequate financial protection in case of an accident.
When issuing or renewing vehicle registrations, license plate issuing officials will attempt to verify the owner's liability insurance through the Alabama Online Insurance Verification System (OIVS).
If the insurance cannot be verified through this system, owners must provide physical evidence of insurance to the issuing official. The most commonly accepted proof is an insurance card.
As per Alabama's Mandatory Liability Insurance Law, vehicle owners must carry minimum insurance coverage that includes the following limits:
- $25,000 for bodily injury per person per accident
- $50,000 for combined bodily injury per accident
- $25,000 for property damage per accident
Failure to maintain the required insurance coverage can result in fines or potential legal consequences. For the first violation, the possible fine can be up to $500. In the case of a second violation, the owner or operator may face a fine of up to $1,000 and/or a six-month suspension of their driver's license.
Can a Non-Resident Buy a Car in Alabama?
A non-resident can buy a car in Alabama, but certain conditions and taxes are involved.
Non-residents purchasing vehicles in Alabama may be subject to the state's 2% automotive sales tax unless certain conditions apply, such as registering the vehicle outside Alabama and exporting it within 72 hours.
Non-residents need to provide valid identification and complete any necessary paperwork, which may include an Automotive Vehicle Drive-Out Certificate for Non-Residents if they plan to export the vehicle from Alabama within 72 hours of purchase.
However, suppose the non-resident's home state requires Alabama residents to pay taxes when buying a car there. In that case, the non-resident purchasing a vehicle in Alabama can't get the full "drive-out" tax exemption.
Instead, the car dealer in Alabama must charge the 2% Alabama state sales tax on the purchase. However, this 2% tax cannot be more than the tax amount the non-resident would have to pay in their home state when registering the car there.