Consumer Protection

Buying or Selling a Used Car in Arizona

Whether you purchase a used car from a dealership or from an individual, keep in mind the old Latin phrase “Caveat Emptor,” let the buyer beware.  There are pitfalls to buying a used car that you need to keep in mind.  Don’t rely on the seller’s representation; conduct your own, independent investigation into the condition and history of the vehicle before committing to the sale.  Both the seller and the buyer need to be diligent, cautious and remain in compliance with Arizona law.

Concerns for the Buyer

Both state and Federal agencies have issued warnings about flood damaged vehicles.  A lot of cars were flooded when Hurricanes Harvey, Irma, and Maria swept through, filling streets and homes with floodwater. Many of those flood ravaged vehicles are now on the market.  Flood damaged vehicles often appear to be in pristine condition. But under the surface lie engine and transmission parts that are corroded, clogged and damaged by water and debris.  Unscrupulous dealers and individuals have shipped such vehicles all over the country for resale to unwary buyers.  

Stolen vehicles are another concern, mainly when purchasing from an individual seller.  You also need to watch out for vehicles that have been seriously damaged in an accident and improperly repaired.  

Vehicle Liens

Another serious concern that requires a more detailed discussion aare vehicle liens.  There are two types of vehicle liens, and you need to be aware of both.  The first is the financial lien.  Financial liens will appear on the vehicle title in the space marked for lienholders.  These are normally for a specified number of months or years.  When the lien is paid, the lienholder provides the vehicle owner with a lien release form.  The owner can take the lien release to MVD (Motor Vehicle Division) and obtain a new title.

The second type of lien is less obvious.  In this instance, someone has placed a lien on the vehicle because of an unpaid financial obligation.  Unpaid taxes or child support can result in such a lien.  This type of lien is not on the vehicle title.  It is added electronically.  Such liens can be added at any time without notice.  A buyer cannot have clear title to the vehicle until the lien is paid. The Arizona Department of Transportation (ADOT) provides a link to a service you can use to check for both types of vehicle liens.

The ADOT Checklist

If you are thinking of buying a used car, go to the ADOT website: www.adot.gov.  From there, click on “motor vehicles” and go to vehicle services.  There you will find a checklist for buying a used car.  That checklist contains a wealth of useful information.  The link for the checklist is included in the resources list for this article.  The ADOT checklist tells you how to verify the seller’s identity and ownership information.  It explains how to verify the VIN (vehicle identification number) and make sure the title matches the vehicle.  It instructs you to take the vehicle to a reliable mechanic before committing to the purchase.  Make sure it is a mechanic you know and not someone the seller recommends.  Check the odometer reading.  Have your mechanic inspect the odometer for tampering.  

Be extra careful if you are purchasing a vehicle online from an out of state seller.  Online transactions, where you can’t see the vehicle and have an opportunity to drive it before buying, are ripe for fraud.  The checklist also provides you with information about services you can use to research the car’s history.  Vehiclehistory.gov, Carfax.com, and AutoCheck.com are examples you will see there.

Paperwork for Car Buyers

When you purchase a used car in Arizona, particular paperwork is required for a valid transaction.  You should have:

  • A bill of sale:  While not legally required, getting a bill of sale from the seller that includes the seller’s name, amount you paid, and the VIN of the vehicle is important.  Registering a purchased vehicle with MVD and getting it insured may prove difficult without it.
  • The vehicle title with the proper sections completed:  Make sure the purchase price is recorded, the transfer section is completed and the signatures of both you, the buyer, and the seller are notarized.

If the seller does not have the vehicle title, do not buy the car.  If he lost the title, he can always go to the MVD and obtain a replacement title. The fact that he hasn’t done so is a bright red flag.

Once you have purchased the vehicle, you will need to go to MVD in person to get it registered.  You will need: the bill of sale, completed title, the title and registration application form (Form 96-0236), and any lien release documents if that applies.  If it is an out of state vehicle, you will also need an emission compliance form if you are registering the car in the Phoenix or Tucson areas.

Considerations for the Seller

If you are selling a car on your own, you need to take steps for a safe and legal transaction.  You will need to complete a sold notice for the MVD, Of course, as previously mentioned, you need to sign off on the back of the title and have your signature notarized.  Remove the license plate from the vehicle.  You can either transfer the plate to another vehicle you own, or you can return it to MVD and request a plate refund.  

The “sold notice” is an important document, and you should not delay submitting it to MVD.  There is no fee for filing a sold notice.  Without it, you can find yourself liable if the vehicle you sold is used in criminal activity, if it is involved in an accident, or if it is ticketed or abandoned.  The sold notice takes you off the hook for any vehicle related events that happen after the sale.  Suppose that one week after you sell the car, the new owner runs a red light and crashes into a SUV.  Having the sold notice on record with the MVD prevents the SUV driver from collecting on your insurance.  The sold notice defeats his argument that you still own the car and are responsible for his injuries.

Whether you are buying or selling a used car on your own, you need to be cautious.  There are unscrupulous buyers out there who will give you a phony check and a phony name.  There are predatory sellers trying to unload damaged goods or stolen vehicles.  Either way, doing your due diligence can protect you from fraud or a bad bargain.  Remember, Arizona’s lemon law applies only to new cars, so it will not help you with a used car that turns out to be a lemon.  Above all, be safe.  Anytime you are dealing with strangers, it is wise to be cautious.  Meet in public places.  Never go alone to check out a vehicle.  Do not invite strangers to your home.  A used car can be a good bargain, but do your homework before you buy.

Resources

www.azdot.gov/docs/default-source/motor-vehicle-services/car-buying-checklist-46-8504.pdf?sfvrsn=2 

www.azdot.gov/motor-vehicles/VehicleServices/Buying_SellingYourVehicle/selling-your-vehicle

Sources

www.dmv.org/az-arizona/automotive-law/lemon-law.php

www.dmv.org/az-arizona/buy-sell/used-cars/paper-work-when-buying-a-car.php

www.azdot.gov/motor-vehicles/VehicleServices/Buying_SellingYourVehicle/purchasing-from-a-private-seller

www.servicearizona.com/webapp/lienmvr/search?execution=e1s1

www.azdot.gov/motor-vehicles/VehicleServices/Buying_SellingYourVehicle/selling-your-vehicle

http://www.azdot.gov/docs/default-source/motor-vehicle-services/car-buying-checklist-46-8504.pdf?sfvrsn=2

 

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This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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