Buying a Vehicle in Tennessee

Proof of Ownership/Title Check

Carefully inspecting the vehicle's title is important to every car purchase. It provides reassurance that the seller is the legitimate owner and that the vehicle has no outstanding liens or encumbrances.

Here are some key points to look out for when reviewing the vehicle's title:

• Verify that the name(s) listed on the title match those of the seller for accuracy.
• Check for lien holder information on the title to see whether there are any outstanding loans or financing on the vehicle.

Inspect the physical condition of the title for any signs of tampering, alterations, or damage, and make sure it is clear and legible. Buyers should also ask the seller if they possess the original title or if it is a duplicate, as duplicate titles could signal potential issues.

Sometimes, the title may be in electronic form rather than a physical document. Buyers must coordinate with the seller to determine if the electronic title can be properly transferred to prevent future problems during the purchase.

Buyers can verify their vehicles by contacting the TNDOR, which oversees vehicle registration and titling. The County Clerk's Office also maintains physical records of vehicle titles and registrations. Otherwise, buyers can utilize private vehicle history report services like Carfax and AutoCheck for further verification.

Vehicle Identification Number (VIN) Check

The VIN is a distinct code that is a unique "fingerprint" for every motor vehicle. It is commonly located on the driver's side dashboard, visible through the windshield. It can also be found on the driver's side door jamb or the vehicle title.

The VIN listed on the title must match the VIN on the vehicle without any discrepancies. Consumers should note any scratches, holes, or indications of removal and reinstallation, which could indicate tampering.

Buyers can utilize tools like the NMVIC VIN Check for online verification. These services provide comprehensive vehicle reports that detail past accidents, damage, or potential odometer rollbacks.

In certain instances, buyers may need a physical inspection of the VIN by law enforcement or an authorized VIN inspector. If discrepancies are found between the VIN and the title, or if tampering is suspected, it's best to avoid the transaction and promptly report any concerns to the appropriate authorities.

Vehicle History Report

A standard vehicle history report usually details the number of previous owners and the duration of each ownership. It also documents reported accidents, collisions, or other damage, specifying their severity. Additionally, the report highlights any outstanding safety recalls associated with the vehicle and, where available, provides information on its service and maintenance records.

In addition to Carfax and AutoCheck, the buyer can obtain this report through the National Motor Vehicle Title Information System (NMVTIS). They must use an approved data provider and have the VIN ready. While there is usually a fee for this service, the information it provides is invaluable.

Odometer Reading

Federal and state laws mandate that sellers accurately disclose the mileage of any used vehicle manufactured from 2011 onward during the transfer of ownership. The purchase should come with an Odometer Disclosure Agreement. The reading indicates the car's mileage and overall usage, which can greatly influence its condition and value.

This requirement applies to various transactions, including sales, trade-ins, and exchanges. Failure to provide accurate information or providing false statements can result in fines and potential imprisonment. Buyers who suspect odometer fraud can report it to TNDOR, which can investigate the case and take appropriate enforcement actions.

If a vehicle's odometer has been tampered with or is malfunctioning, the TNDOR will mark the vehicle's title with designations like "Exceeds Mechanical Limits" or "TMU" (True Mileage Unknown). This marking remains on the vehicle's title permanently so that prospective buyers are aware of possible odometer issues.

Ownership Transfer

To legally transfer ownership of a vehicle purchased from a private owner in Tennessee, both the seller and buyer must follow specific steps:

• The seller must endorse the vehicle title to the buyer, including providing odometer disclosure.
• Subsequently, the buyer must proceed to the county clerk's office within 30 days of purchase to apply for a new title in their name.
• The buyer must pay the required title and registration fees.
• If the vehicle has a lien, the buyer is responsible for coordinating with the lienholder to facilitate proper title transfer.

Buyers of used vehicles need to submit the following documentation for titling:

• A valid certificate of title
• Odometer disclosure statement
• Proof of identification and residency
• Copy of current registration if transferring the license plate
• Affidavit of Non-Dealer Transfers (for gifts, low sales prices, or transfers between family members)

Failing to complete this ownership transfer process can leave the original owner liable for any issues arising with the vehicle after its sale.

License Plate and Registration

When buying from a private seller, the buyer has several choices for handling the vehicle's license plates and registration:

• The seller may transfer their current license plates to the buyer for a nominal fee.
• The buyer can opt to apply for new license plates at the county clerk's office.

Regardless of the option chosen, the buyer must complete vehicle registration in their name within 30 days of purchase.

Dealer Licensing

Buyers should verify that the dealership they are dealing with holds a valid license and maintains good standing with the state. This precaution safeguards the buyer against dealers' deceitful or unethical practices. Interested buyers can check the TNDOR website for a motor vehicle dealer license search.

Warranty and Disclosures

Licensed motor vehicle dealers are required by law to provide warranties based on the age and mileage of the vehicle:

• Vehicles four years old or newer and with less than 50,000 miles must have a minimum 30-day/1,000-mile warranty.
• Vehicles aged between 4 and 7 years with less than 75,000 miles must include a minimum 15-day/500-mile warranty.
• Vehicles over seven years old or with over 75,000 miles are exempt from mandatory warranty requirements under state law.

Dealers have the option to provide additional warranty coverage beyond these state-mandated minimums, which must be clearly stated in the sales contract. The Tennessee Automobile Dealership Manual provides more details on the matter.

Under Tennessee law, dealers are also obligated to furnish specific disclosures regarding the vehicle's condition and history. The Tennessee Motor Vehicle Commission has a useful guide for buyers on what they should check to make sure a vehicle is in tiptop shape.

Some of the essential disclosures dealers must make include:

• Known defects or mechanical issues
• Accident history
• Salvage or rebuilt title status
• Odometer disclosure
• Manufacturer recalls

Financing and Taxes

Residents of Tennessee who are buying a vehicle from a licensed dealership have multiple financing options available. Dealers commonly offer in-house financing, which is convenient and tailored to the buyer's financial situation.

However, Tennessee residents are not required to use the dealer's financing. They can also opt to secure a loan from their bank, credit union, or another lender, potentially offering more favorable interest rates or terms than dealer financing.

Regardless of the financing method chosen, Tennessee residents must pay a 7% sales tax on the vehicle's purchase price. Prospective buyers can find more information in the state's Understanding Vehicle Financing guide.

Registration and Licensing

The dealership manages the registration and license plate transfer process for its buyers, which adds convenience to the purchase. Here's how it typically works:

• Title Transfer - The dealership collaborates with the previous owner to transfer the vehicle's title to the new buyer so all necessary signatures and odometer disclosures are completed.
• Registration Transfer - If the vehicle already has valid registration and plates, the dealership transfers them to the new owner's name, sparing them the task of registering the vehicle with the TNDOR.
• New Registration (If Needed) - If the vehicle lacks existing registration, the dealership registers it in the new owner's name and handles all required paperwork on behalf of the buyer.
• License Plate Transfer - Whenever possible, the dealership transfers a valid license plate to the new owner's registration. If this is not feasible, they issue a new license plate.
• Temporary Tags - In some cases, the dealership issues temporary registration tags to enable the buyer to legally drive the vehicle until permanent registration and plates are processed.

Consumer Protection Laws

Tennessee has enacted several consumer protection laws for private sellers' vehicle purchases. These laws protect buyers from deceptive practices and ensure a fair transaction when buying a used car.

Sales Tax

Vehicle purchases in Tennessee are subject to a 7% sales tax. This tax is calculated based on the purchase price of the vehicle before any deductions for trade-in value are applied. An additional local option sales tax of up to 2.75% can be applied, but this varies by county.

The TNDOR document on Sales Tax on Motor Vehicles in Tennessee provides comprehensive details on the state's sales tax requirements for purchasing motor vehicles. It covers the procedures for calculating sales tax on these purchases and outlines any applicable exemptions.

Additional Fees

Alongside the sales tax, several other fees may apply when purchasing a car in Tennessee:

• Title Transfer Fee: $11; $19 for a fast-track title (3-5 business days)
• Vehicle Registration Fee: Varies depending on the vehicle's weight, typically ranging from $28 to $75
• Wheel Tax: Can vary from $20 to $100 based on location
• License Plate Fee: $21.50 for a standard plate
• Emissions testing fee:: $9 in certain counties
• Dealer documentation fees: (if buying from a dealership)

Exemptions

Some buyers may qualify for exemptions from the standard sales tax rate. These include:

• Military members stationed in Tennessee but are not residents of the state
• Disabled veterans on the first $40,000 of a vehicle's purchase price
• Owners who were given vehicles as a gift by immediate family members
• Drivers with certain low-emission vehicles

The TNDOR and local auto dealers can provide more clarity on all applicable costs. Fees are subject to change, so buyers can also check with their local county clerks for the most up-to-date information.