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United Kingdom (UK) - Buying or Selling a Car

Different procedures exist for buying and selling a car. There are also two different procedures for buying used and buying new. These processes are discussed below to help you understand the paperwork involved.

Buying a Used Car

You may buy a used car through a dealership or a private ownership. Some of the steps will be the same. For instance, you will want to check the car’s paperwork regarding its history and ownership to ensure you are not getting a car that has been in an accident or which may have questionable ownership. You should check the VIN and mileage record. Additionally, check the MoT (Ministry of Transport) to see whether it is still valid or if you will need to get a new inspection.

The MoT is necessary for any car that is three years old. MoT inspections are conducted every year after the car is three years old. The dealership should have all of this paperwork readily available for you, including telling you whether an inspection is necessary. The dealer will also provide you with a sales receipt showing the transfer of ownership. The dealership will then outline any necessary VAT or duty to be paid on the used vehicle.

If you are buying from a private owner, the only difference is the paperwork. The seller should have a V5C logbook from the DVLA. The DVLA will need a copy of the sales receipt, and you will be given a green piece of paper showing the sale. This will transfer ownership to the new buyer and help you obtain plates and registration for the car. If any taxes are due, the DVLA will let you know when you hand over the sales receipt and other paperwork. You may end up paying road tax, VAT or duty tax depending on the vehicle.

Buying New

To buy a new car you will need to seek out a dealership. The dealership will conduct all the necessary paperwork to transfer the car’s title to your name. There will be a few forms required, including a car loan form in the event that it is needed. The dealership will talk you through each of the documents.

In the papers you receive there will be a receipt of sale along with paperwork showing the transfer of ownership to you from the car dealership. An MoT will not be required with a new buy, however there will always be taxes such as VAT and road tax to be paid.

Before Completing the Sale

Before you buy a new or used car, it is a good idea to test drive the vehicle. With a private sale of a used car it is usually best to have a mechanic take a look at the engine and other parts of the vehicle to ensure there are no faults. Private owners are not bound by the same disclosure laws as dealerships and they do not certify previously-owned vehicles. Dealerships will have a certification for the pre-owned vehicle showing that it is road ready.

Selling a Car

You can sell your car or trade it in. If you sell as a private seller then you will need to visit the DVLA and pick up the V5C paperwork. It is your responsibility to fill out this document for the sale and then give the green portion to the buyer once money has exchanged hands. This document shows your intention to sell, as well as letting the DVLA know that the registration needs to be switched to the new owner.

Once money has exchanged hands and the form is filled out, the car is no longer yours. It is up to the buyer to follow through with registration and all other paperwork. You can cancel your insurance on the vehicle at this point too.

If you elect to trade in your car towards the purchase of a new vehicle, the dealership will provide all the necessary forms for the sale of your old vehicle and ensure that the title is transferred.

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