Purchase documentation

Introduction

You don't own a vehicle until the paperwork is complete.

Here's how vehicle purchase documentation works in the US.

Table of contents

Buying from a dealership
Buying from a private party
Buying from an auction

Dealerships typically document vehicle sales with a buyer’s order, which outlines the terms and conditions of the vehicle purchase, listing the details of the vehicle, as well as price, additional fees, financing terms, and warranties (if applicable).

Your salesperson will typically provide a buyer’s order when the vehicle, price, and other parameters have been agreed upon.

You will be asked to sign first, before the dealership’s sales manager signs.  The buyer’s order is not binding until both parties have signed.

While many dealerships began to accept electronic signatures during the pandemic, most still require a wet ink signature on a vehicle’s buyer’s order.  This can be a challenge if you’re buying from abroad, but you may be able to arrange to have documents couriered between yourself and the dealership.

A vehicle’s title is its official ownership document.  In order to transfer the vehicle into your name (a process called registration), the authentic title (not an image, scan, or photo of it) must be submitted to the DMV in the state where your vehicle will be registered.

There is no standard title delivery process for vehicles purchased from a dealership.  Some dealers keep their vehicles’ titles on-site in a vault; others keep them in a safe deposit box at a bank, and retrieve them once a week.  Some vehicles were bought by the dealership from another private party as a trade-in, and the title needs to be re-issued because when the dealership paid off the loan on the vehicle.

If you are buying the vehicle in the same state that the vehicle will be registered, the dealership may submit the vehicle’s title to that state’s DMV on your behalf.

If you are buying the vehicle in a state other than the one where the vehicle will be registered, the dealership will most likely send your vehicle’s title to the address that you provided when you purchased the vehicle.  You will be expected to take that title to the DMV and register the vehicle yourself.

Private parties typically document vehicle sales with a bill of sale which details the buyer, the seller, the vehicle being sold, the price, and any conditions related to the transaction.

Bills of sale between private parties can be signed in ink or electronically.

A private seller should have the “title in hand,” or physically in their possession, and ready to hand it to a buyer at the time of the transaction.

The most common reason why a seller wouldn’t have title in hand is that the vehicle has an outstanding lien (or loan against the vehicle), and the bank has physical possession of the title.  In this case, the vehicle cannot be transferred to a new owner until the lien is satisfied (i.e., the loan is paid off).

We cover the payment timing risks in more detail in the paying for the vehicle page, and recommend using an escrow agent whenever buying a vehicle from a private party to mitigate these risks.

Two types of auctions are open to the public: salvage vehicle auto auctions and niche auto auctions.

Salvage auto auctions usually have an auto dealer’s license in the state in which the auction is located, and the auction typically sells you the vehicle.  These types of auctions follow the dealership process described above.

In contrast, niche auto auctions typically don’t have an auto dealer’s license.  Instead, they are platforms that facilitate connections between buyers and sellers.  Therefore, when you buy a vehicle through one of these platforms, you are actually buying it from a private seller, and will follow (with support from the platform) the private party process described above.

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