• Buying Guides

Buying a Car in California - What to Know

By Melissa Spicer | March 14, 2022

Purchasing a vehicle in California follows pretty much the same process as it does in other states, which involves researching the car, taking a test drive, negotiating a fair price for your trade-in, filling out the required paperwork, and paying the fees required by the state. Still, as with every state, California has some unique laws and procedures for buying a car, such as its smog test and as-is laws.

The following rundown will help you buy a car in California the right way.

Buying a Car in California 101:

The car market in the Golden State is ripe for the picking. The state of California has a lively car culture, so finding a good seller --whether it's a private party, a car dealership, or auction -- is reasonably straightforward.

Los Angeles is a good place to look for cars, as its vast network of suburbs and neighborhoods creates a diverse vehicle market. San Diego, Sacramento, Fresno, Bakersfield, and the San Francisco Bay Area also has a rich array of new and used cars for sale.

Since the state attracts people from all over the country, you can find just about any rare car in these cities too.

Before buying a car, best practice dictates researching it carefully. Check out the car's pricing or market value on a vehicle valuation site such as Kelley Blue Book, then plug its Vehicle Identification Number into a vehicle history report site such as Carfax. You can find a car's VIN on the driver's side door or by the window on the driver's side dashboard.

A vehicle history report can alert you to any potential issues that the car has. For example, if it has been involved in an accident and subsequently repaired or if the vehicle has been involved in a flooding situation, the vehicle history report can reveal those details. This can be valuable for making a smart purchasing decision.

Before buying a car, ask the dealer if you can drive it to a private garage for a diagnostic check. Although not all dealers let you do this, many do. Diagnostic checks only cost around $60 or so, but it’s money well spent. The California State Automobile Association provides an online list of mechanics that perform high-quality diagnostic tests in the state to help you easily locate someone to give the car a good once-over to look for potential problems.

Paying Fees and Filling Out Paperwork When Buying a Car in California:

When buying a car in California, you typically have to fill out a lot of paperwork and send it all to the DMV. That includes the bill of sale, vehicle registration, vehicle title and application, and smog certificate. You may also have to provide loan documents if you took out a loan to buy the car. Notice of ownership transfer and a release of liability is required if you purchased the vehicle used.

Currently, California's statewide sales tax on both used and new cars is 7.25 percent, though city and county taxes can be higher. If you bought a car in another county from where you live, online tools such as the California Board of Equalization tool can help you calculate the sales tax you must pay.

Also, you must pay a title transfer fee of $15 within 30 days of buying a used car. If the vehicle is new, you must pay a $21 title fee instead, also known as a pink slip fee. Car registration in California costs $58, and you can't get a vehicle title if you don't pay this fee. Other fees you may have to pay when buying a car in California include a $28 California Highway Patrol fee, a $1 reflectorized license plate fee, a $1 fingerprint ID fee, a $6 air quality management district fee, a $1 crime deterrence program fee, and an $8 smog transfer fee.

Smog transfer fees are only necessary if your car is four model years old or younger. Usually, you must also pay a vehicle license fee that's 0.65 percent of the vehicle's value. In California, a zero-emissions parking sticker costs $17, and documentation fees cost $80 plus a little extra for each transaction filing. The California Civil Code requires dealers to list all fees they charge.

Smog Testing:

The state of California is big on smog testing, and vehicles must comply with the state’s requirements to be legal. For this reason, sellers must make sure that any cars they sell have passed the smog certification test 90 days before they transfer the title to the new owner.

Smog tests involve a licensed technician using equipment to detect how much oxygen, carbon monoxide and carbon dioxide the car emits as well as how many hydrocarbons it pumps out. Some emissions tests also measure nitrogen. The technician does a visual and functional inspection of the vehicle as well before sending all the emissions data to the Bureau of Automotive Repair (BAR).

Private sellers also need to have their vehicles smog tested before selling them, so you may have to pay hundreds of dollars in repairs to make the vehicle meet emissions standards if yours has previously failed these tests. The BAR has an online database of each vehicle's smog history. Just plug in your license plate number to find it. If a car you want to buy has passed every smog test, it's probably acceptable to drive.

As-Is Vehicles in California:

Dealers in California can legally sell vehicles "as-is." Under the as-is law, dealers don't have to repair a car before reselling it or providing a warranty. If a dealer offers to repair a vehicle after the sale, make sure the salesperson signs a written agreement so you can hold them to it.

Also, the Federal Trade Commission requires dealers to provide a buyer's guide for each vehicle they sell. It details the remaining warranty status and mechanical problems as well as the percentage of repairs the seller has agreed to pay if a warranty claim is invoked.

Unlike some states, California does not offer any sort of cancellation period or so-called “cooling off” period when it comes to vehicle purchases or leasing contracts. For that reason, it is important that car buyers understand that they have no legal footing to stand on if they decide they don’t want the car or that the car costs more than they can afford. Once buyers sign on the dotted line, they can only cancel the agreement if there is a legal reason to do so, such as the seller perpetrating fraud during the course of the sale.

Still, California requires that dealers offer buyers a two-day cancellation option on any used vehicle that costs $40,000 or less under most conditions. This does not apply to motorcycles or RVs and certain other vehicles designed for off-highway use.

Be advised, however, that this option doesn't exempt you from restocking and cancellation fees if you return the car. And the vehicle must be returned in its purchase condition with fewer than 250 extra miles on the odometer.

California's cancellation option offers a refund for any fees, taxes, and deposits you paid when buying the car. If the dealer refuses to take the vehicle back, then the law requires the dealer to send you a written explanation. Keep in mind that restocking and cancellation fees depend on the vehicle's price. The California Department of Motor Vehicles offers an online comparison of vehicle fees and price ranges in the state.

How to Register and Insure Your Car in California:

When registering your car in California, you must get a certificate of ownership from the seller indicating that you own the vehicle. The seller must also give you a smog check test certification for the car. For car buyers' convenience, most dealerships take care of the registration process on their own, and they may even cover registration fees on rare occasions.

When buying from a private seller, though, you must typically register the car at the DMV in person. The DMV then gives you a temporary registration slip while processing your official registration. If you don't register your vehicle within 10 days of buying it, you may have to pay late fees.

You should also bring your odometer mileage to the DMV if your car is more than 10 years old. You must renew your registration every year. The California DMV sends renewal notices by mail to warn you when your registration is about to expire. You can renew your registration online, in person, by mail, or by phone.

California requires car owners to purchase car insurance. Insurance rates depend on many factors, including the auto insurance company and the price of the car. Rates also depend on the type of car you buy. For example, SUVs and trucks tend to have higher insurance rates than family cars. Your driving history also has a big role to play in how much you will pay for the required insurance on your car purchase.

You can work out such rates with an insurance agent after buying your vehicle. It pays to shop around for insurance, as rates vary widely among insurers.

California Lemon Laws:

Under the state's Lemon Law a new car under a manufacturer's warranty is entitled to a reasonable number of repairs by the manufacturer or its representatives. Otherwise, the manufacturer must refund the purchase or replace the vehicle, and the buyer can choose either option.

This law helps prevent the sale of lemons⁠—that is, cars with significant manufacturing defects. Manufacturers that sell lemons must also pay any license fees, registration fees, sales taxes, and repair fees the buyer incurred from towing or repairing the vehicle. If your vehicle is determined to be a lemon, also consider lodging a complaint against the manufacturer and dealership with the Better Business Bureau.

Other Considerations

There are many other factors to consider when buying a car in the state of California. For example, the purchase price for your new vehicle may have advertising fees rolled into it. These are fees that the dealer relies upon to pay for advertising. Hiding these fees is against the law, and you can often get them removed during negotiation. Ask for a full list of fees that you’re paying and then work with the car salesman to chisel them off the asking price of the vehicle prior to signing any agreement.

Another factor to consider is California's laws on bringing in cars from out of state. Registering out-of-state vehicles in California can be expensive due to the state's high emissions standards and smog test requirements. Some used vehicles with diesel engines may have to go through a lengthy and expensive approval process to be registered in California if the vehicle was never originally sold in the state with a diesel. The California DMV site has plenty of specific registration advice for car owners crossing across state lines.

Finally, you should consider the range of titles available for cars in California before you buy one. The state has plenty of salvage titles, for example. These are cars deemed a total loss by insurance companies due to their history of damage. Although insuring salvage titles for more than liability coverage is tricky, since they've often undergone repairs that can resolve problems, they might be a bargain.

Some additional vehicle titles available in California are bonded, junk, and affidavit titles, among others. Still, these vehicles are best for more car-savvy buyers.

It's also worth mentioning that buyers may be offered the option to buy extended warranties on their vehicles at purchase. Revie the details of the warranty and any exclusions before buying one, since some are essentially worthless, especially if you have a warranty from the dealership anyway.

The Bottom Line

Although the car-buying process in California can be a bit convoluted thanks to the state’s wide range of laws, smog testing requirements, as-is sales provisions, and contract cancellation options, keep in mind that these regulations and rules were put into force to protect both buyers and sellers. With ample preparation and armed with knowledge about how the process of buying a car works in California, you should be able to speed through the process with minimal trouble.