When purchasing a vehicle in Indiana, whether new or used, individuals face a complex and expensive decision. However, with preparation, one can avoid potential problems and secure a good deal.
The Indiana Bureau of Motor Vehicles (BMV) oversees the state vehicle purchasing process. Whether individuals are buying from a private party or a licensed dealership, the BMV sets the registration requirements that must be followed.
If buying from a private party, several steps must be observed to guarantee a successful transaction. This includes obtaining all the necessary documents and taking precautionary measures to avoid purchasing a faulty vehicle.
On the other hand, if one opts to buy from a dealership, it is crucial to check the dealer's credentials and understand the legal protections in case any issues arise after the purchase.
By adhering to these guidelines, vehicle buyers in Indiana can confidently navigate the purchasing process, confirm that they meet all legal requirements, and be ready to drive their purchased vehicle legally and safely.
What Is the Process for Buying a Car in Indiana?
Buying a vehicle in Indiana entails following steps applicable to private sellers and dealerships. To have a seamless experience, prospective buyers must familiarize themselves with the state's distinct requirements and procedures for each option.
Buying a Vehicle from a Private Seller in Indiana
While buying a vehicle from a private seller in Indiana offers advantages such as lower prices and negotiability, buyers are advised to proceed cautiously.
To secure a satisfactory private party purchase, purchasers must verify the seller's legal vehicle ownership by examining the title. Additionally, conducting a comprehensive inspection of the vehicle's condition is essential to assess its condition and reliability. Besides that, it is crucial to obtain the necessary documents from the seller to proceed with vehicle registration smoothly.
Buyers must consider the following to navigate the vehicle purchasing process from a private seller in Indiana confidently:
Title Check
Buyers must conduct a thorough title check before purchasing a vehicle from a private seller in Indiana.
The title serves as a legal document verifying the seller's vehicle ownership. By performing this check, buyers can confirm that the seller has the rightful authority to sell the vehicle and that no outstanding liens or loans are associated with it.
Moreover, a title check can provide valuable insights into the vehicle's history. Buyers can ascertain if it has been involved in significant accidents, possesses a salvage title, or has been reported stolen.
Apart from that, by verifying the title's availability, purchasers can avoid any potential vehicle registration obstacles down the road.
To perform a title check, buyers should request the vehicle's title from the seller and meticulously review it. It is essential to verify that the seller's name matches their identification and that the vehicle's information is correct.
If the vehicle title has any red flags, buyers should seek guidance from the BMV or consider refraining from the transaction altogether to mitigate future complications.
Vehicle Inspection
When purchasing a vehicle privately in Indiana, buyers should conduct or request a vehicle inspection from sellers, even though it is legally required only for out-of-state cars or vehicles owned by new Indiana residents.
This pre-sale inspection offers buyers security by comprehensively assessing the car's condition and uncovering any hidden issues that could impact their purchasing decision.
Typically, a vehicle inspection will thoroughly examine the engine, transmission, brakes, suspension, and other critical systems. This inspection can be performed at any BMV branch or by a BMV-certified full or partial-service provider at no cost.
Alternatively, buyers may choose to have a law enforcement officer perform the inspection, although a fee of up to $5 may be charged. In such cases, the officer must provide a completed Physical Inspection of a Vehicle or Watercraft (Form 39530).
It is important to note that, in addition to the physical inspection, an emissions and tampering inspection must be conducted for vehicles that will be registered in Lake and Porter counties. These additional checks confirm the vehicle meets environmental standards specific to these counties, offering further peace of mind and compliance with local regulations.
Vehicle History Report
If purchasing a vehicle from a private seller in Indiana, consider obtaining a vehicle history report (VHR).
A VHR provides a comprehensive overview of the vehicle's past, revealing any potential issues or warning signs that may not be immediately apparent during the initial inspection. It includes crucial details such as accurate mileage records and highlights any incidents the vehicle may have been involved in, such as flooding, salvage titles, or previous reconstruction.
The information provided by the VHR is paramount to buyers. It can help them assess the overall condition of the vehicle being purchased and understand its past complications. It can also be used to negotiate and make informed purchasing decisions.
To acquire a VHR in Indiana, buyers can rely on the services of approved third-party data providers, such as those accredited by the National Motor Vehicle Title Information System (NMVTIS). These providers typically require the vehicle identification number (VIN) or license plate number and may charge a service fee to generate a reliable report.
Odometer Disclosure Requirement
The odometer disclosure requirement is an important aspect to consider when purchasing a vehicle from a private party in Indiana. According to the Indiana Code Section 9-17-2-6, the vehicle's odometer reading at the date of sale or time of transfer is required when applying for a certificate of title.
For buyers, this regulation not only ensures a smooth transfer of vehicle ownership but also provides valuable information. Specifically, by obtaining the odometer disclosure, buyers can protect themselves from potential odometer fraud and use the recorded mileage to negotiate a fair price.
To comply with this requirement, sellers must accurately complete the odometer disclosure section in the title document. On the other hand, buyers must acknowledge this disclosure by signing and printing their names in the designated section of the document.
In cases where the title does not have a designated section for the odometer reading, individuals involved in the transaction can utilize the Odometer Disclosure Statement (Form 43230) to fulfill this requirement.
Ownership Transfer
Ownership transfer is crucial when purchasing a vehicle from private sellers in Indiana. This step involves obtaining an adequately assigned title from the seller and other documents that buyers need to register the car in their name.
To facilitate a smooth ownership transfer, sellers must diligently complete the relevant sections on the title document. This includes providing accurate information such as their full legal name, address, signature, date of purchase, price of sale, and odometer reading.
Conversely, buyers must also furnish their details, including their full legal name, address, and signature.
Once the title document is appropriately filled out, buyers can provide payment to the seller and obtain the vehicle title, thereby assuming ownership.
Note that if there is a lien on the vehicle, buyers must also obtain a lien release document from the seller.
Bill of Sale
In addition to the vehicle title, buyers must also prioritize obtaining a Bill of Sale (Form 44237) from private sellers in Indiana. This document is vital, as it is required to register the vehicle with the Indiana BMV.
The Bill of Sale records the transaction and includes pertinent information about the seller and buyer, such as their names, addresses, and signatures. It also contains details about the vehicle, such as its VIN, make, model, date of sale, and the agreed-upon sale price.
By obtaining an adequately completed Bill of Sale, buyers can guarantee they have the necessary documentation to complete their vehicle registration process smoothly and legally. Moreover, having a copy of this document allows them to settle ownership disputes that may arise after purchase.
License Plates and Registration
Buyers must register the purchased vehicles and obtain license plates to legally drive them on state roadways. Per the Indiana BMV, this process must be completed within 45 days of purchasing or acquiring the vehicle. If this is not met within this timeframe, an administrative penalty will be charged.
To register the purchased vehicle, buyers must prepare the following:
- The signed-over vehicle title
- Bill of Sale
- IN driver's license
- Odometer Disclosure Statement, if applicable
- Proof of identity
- Proof of auto insurance
- Proof of vehicle inspection, if applicable
- Proof of emission testing, if applicable
- A completed Application for Certificate of Title (Form 205)
- Payment for registration fees
Upon completing these documents, purchasers can visit any BMV office to finalize the registration process. If successful, they will receive license plates for the purchased vehicle, indicating they can legally drive it on state roadways.
If buyers cannot physically visit a local BMV office, they can opt to register online by following the steps outlined in the myBMV online registration platform.
Buying a Vehicle from a Licensed Dealer in Indiana
Individuals benefit from several key advantages when purchasing a vehicle from a licensed dealership in Indiana.
Dealerships usually manage the registration process, sparing buyers from paperwork hassles. Additionally, licensed dealerships must adhere to federal and state regulations, providing buyers with recourse if issues arise with the vehicle.
Despite these benefits, buyers should still consider the following factors to secure a successful and satisfactory vehicle purchase from an Indiana dealership.
Licensed Dealer Check
Indiana Code Section 9-32-11-1 mandates that motor vehicle dealers must be licensed before they can sell motor vehicles in the state. Hence, it is essential to verify the dealership's license before purchasing a vehicle.
Confirming that the dealership is licensed provides buyers with confidence in the legitimacy of their transaction. Additionally, by dealing only with licensed vehicle dealerships, buyers can be assured of their rights as consumers and that they can resolve any issues arising after purchasing a vehicle.
To check if a dealership is licensed in Indiana, interested parties can directly inquire to any BMV office.
Alternatively, individuals can utilize the Dealer Search platform offered by the Indiana Secretary of State. This platform allows one to search the license status of a particular dealership by inputting the dealership name, dealer number, and address.
Buyer's Guide
When purchasing a used vehicle from a licensed dealership in Indiana, buyers must familiarize themselves with the Buyer's Guide provided by the Federal Trade Commission (FTC).
The Buyer's Guide is an essential document prominently displayed on every used car for sale. It contains the following crucial information:
- The vehicle's major mechanical and electrical systems
- Any significant problems to be aware of
- Warranty information
- Written promises made by the dealer regarding the vehicle's condition
- Recommendations for an independent inspection
- Dealer's contact information.
By carefully reviewing the Buyer's Guide, prospective buyers can make well-informed purchasing decisions and reduce the risk of acquiring a vehicle with undisclosed issues.
Warranties
Buyers should familiarize themselves with the warranty details before purchasing a vehicle from an Indiana dealership.
Warranties play a crucial role in safeguarding consumers. Manufacturers typically offer comprehensive warranties for new vehicles, which include bumper-to-bumper coverage and powertrain protection. However, the warranty options for used cars depend on the dealership's policies.
As mentioned, the Buyer's Guide includes crucial information about warranties for used vehicles being sold. If a warranty is offered, it will indicate the type, any limitation or exemption, duration, and the extent of the dealership's coverage for repair expenses.
Buyers can avoid disputes regarding coverage if they thoroughly understand the warranty terms. This knowledge can also help them avoid unexpected expenses or repairs that fall outside the warranty's scope.
Indiana Lemon Law
The Indiana Lemon Law, also known as the Motor Vehicle Protection Act, protects individuals who purchase vehicles that fail to meet specific basic standards.
This law specifically applies to new or used cars purchased in Indiana weighing less than 10,000 pounds and primarily intended for use on public highways. However, it excludes vehicles like conversion vans, motor homes, farm machinery, motorcycles, mopeds, snowmobiles, and those primarily designed for off-road use.
A vehicle must meet the following criteria to qualify as a lemon under the Indiana Lemon Law:
- It must have a defect covered by the warranty that significantly impacts its use, safety, or value.
- The manufacturer must have attempted to repair the defect at least four times or kept the vehicle out of service for more than 30 days.
- The defect must have been reported within 18 months or 18,000 miles of the vehicle's life.
If a vehicle is deemed a lemon, individuals have the right to request a replacement from the manufacturer or dealer or to ask for a repurchase.
The manufacturer must provide a vehicle of comparable value for a replacement. In case of a repurchase, manufacturers must pay the car's total price, including any credits or allowances for trade-ins, sales taxes, finance charges, and costs related to towing. However, the manufacturer may deduct an allowance for the vehicle's prior use based on the miles traveled.
What Are the Fees for Buying a Car in Indiana?
Vehicle buyers in Indiana should be aware of the following associated fees to avoid surprises and budget appropriately:
Sales Tax
The current state sales tax rate is 7% of the purchase price. If individuals buy from a dealership, the dealer collects this tax and provides buyers with a Certificate of Gross Retail or Use Tax Paid (Form 48842). If the vehicle is purchased from a private party, the sales tax is paid to the BMV branch when applying for a certificate of title.
Registration Fee
Vehicle registration fees in Indiana vary depending on the vehicle's type and weight. For most passenger vehicles, the registration fee is $21.35.
Transportation Infrastructure Improvement Fee
Individuals must pay a $15 Transportation Infrastructure Improvement Fee when registering a vehicle for the first time or renewing a vehicle registration in Indiana.
Plate Transfer Fee
The current plate transfer fee in the state is $9.50.
County Excise Tax
Certain Indiana counties charge county excise and wheel taxes when registering a vehicle. Individuals can utilize the Quick Quote Tool to estimate the applicable county tax.
Municipal Excise Tax
Vehicles registered within specific Indiana city or town limits may be liable for a municipal vehicle excise or wheel tax. For the current municipal excise tax rates, consult the Municipal Vehicle Excise Tax and Wheel Tax Rates.
What Are the Insurance Requirements for Vehicles in Indiana?
In Indiana, it is a legal requirement for individuals to have proper insurance coverage before operating a motor vehicle. Indiana Law explicitly states that a person cannot drive a car in the state without financial responsibility or insurance.
To comply with this law, all motorists driving on state roadways must maintain the state's minimum liability insurance coverage for the vehicle they operate. The minimum liability insurance requirement in Indiana is as follows:
- $25,000 coverage for bodily injury or death of one individual
- $50,000 coverage for bodily injury or death of two or more individuals per accident
- $25,000 coverage for property damage per accident
The BMV verifies that all motorists have the required minimum liability insurance coverage whenever a vehicle operator is involved in a traffic accident or violation or anytime a person is driving.
Failure to maintain appropriate auto insurance coverage in Indiana can have serious consequences.
It can lead to the suspension of the driver's license and vehicle registration for up to a year and payment of reinstatement fees, which range from $250 to $1,000, depending on prior offenses. Furthermore, those caught driving without insurance repeatedly must also file an SR-22 certificate for up to five years.
Can a Non-Resident Buy a Car in Indiana?
Indiana does not restrict vehicle purchases based on residency status. Hence, a non-resident can buy a car in the state. However, there are a few considerations regarding the registration of the purchased vehicle.
If a non-resident intends to register the vehicle in their home state, they must follow the registration rules mandated by their state.
Should a non-resident plans to register the vehicle in Indiana, they must first establish residency in the state. If this requirement is met, they must register their vehicle within 60 days.
To register a purchased vehicle, non-residents must visit their local BMV location. Then, they must submit the signed-over vehicle title, bill of sale, photo identification or IN driver's license, proof of insurance, proof of Indiana residency, and odometer disclosure statement, if applicable.
Besides submitting the above documents, non-residents will need to settle the applicable registration fees and taxes to complete the registration process.