Buying a Car in California - What You Need to Know
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Buying a Car in California - What You Need to Know

By Autolist Editorial | April 2, 2021

Buying a car in California isn't much different from buying one elsewhere in the U.S. You research the vehicle, take it for a test drive, fill out the paperwork, and pay the fees. As with every state, though, California has some unique laws and procedures for buying a car, such as its smog test and as-is laws.

Here's how to buy a car in California the right way.

Buying a Car in California: The Basics

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 have 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, it's best to research 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.

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 about $60. The California State Automobile Association provides an online list of mechanics that perform high-quality diagnostic tests in the state.

Buying a Used Car 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 provide 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.

California law requires dealers to let you purchase a two-day contract cancellation option for any used vehicle under $40,000, except for RVs, motorcycles and a few other vehicle types. This option doesn't exempt you from restocking and cancellation fees if you return the car, however. And the vehicle must be returned in its purchase condition with fewer than 250 extra miles on the odometer. California's cancellation option even offers a refund for any fees, taxes and deposits you paid when buying the car.

The dealer must also send you a written explanation if they decline to take back the vehicle. 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.

There is also buying a vehicle from a private seller. That may cut down on the middle man if you're not a fan of showrooms.

How to Pay Fees and Fill 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, 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 $25 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 a $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.

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 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. You can work out such rates with an insurance agent after buying your vehicle.

Special Laws to Follow When Buying a Car in California

California has a few state-specific laws you should keep in mind when car buying. Under the state's Lemon Law, for example, 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.

Also, 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.

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.

Other Considerations

There are many other factors to consider when buying a car in the Golden State. 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.

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.

Buying a car in California can be daunting due to the state's wide range of laws, smog tests, as-is sales, and contract cancellations, but these laws are designed to protect buyers. As long as you come to the dealer prepared, buying a car in California shouldn't be a hassle.