State Regulations

Buying and selling a car in the state of Alabama is relatively easy if you do your homework.

Buying a Car

Alabama enforces the Lemon Law to protect buyers. This federal law applies to any product which costs more than $25, comes with a warranty, and does not perform as it should.

When you buy a used car, you will need to transfer registration with the state, apply for a title, and pay taxes on your purchase. Take the following information to the tag office, usually located in your county courthouse:

• The original title signed over to the buyer from the seller on the back of the title

• Bill of Sale

• Applicable fees and taxes

The title fee is $18. Sales tax, ad valorem, and license fees vary in each county. Transfer fee is $1.25.

A few tips for buying a car:

• Do your homework. Figure out what kind of car you want or need to fit your lifestyle and budget. Read consumer reports, comparison guides, and forums to learn about the car you are researching. Comparison shop for prices.

• Test drive each car. You'll want to know if you are comfortable behind the wheel. Climb in the backseat to check for leg room and head space.

• Check on insurance rates for the vehicle you are exploring. Rates vary greatly depending on make, model, year, and body style.

• Once you decide on a car, get a car report on it. This car report, available through DMV.ORG will provide a title search, accident report, lemon report, odometer check, and registration details.

• Have a mechanic examine the car to warn you of any damage or problems with the vehicle.

• Negotiate a price. Don't pay more than you should. Most sellers do not expect the buyer to pay their original asking price. Offer a dollar amount lower than you are willing to pay, then work upwards as the seller makes a counter-offer.

• You have 20 days to register your new car. A title application must be completed before the registration can be processed.

Important Notice for Alabama Car Buyers

Due to Hurricane Katrina and other numerous storms during 2005, thousands of new and used vehicles were flooded and totaled out by insurance companies. Now, they are back on the market for sale in other states. Flood damage may not be visible, so be on the alert to avoid future headaches.

Selling

When you sell your car, you will need to provide the buyer with the original title (signed over by you on the back) and a Bill of Sale. Make copies of the paperwork for your own records.

It is wise to accept only a certified check for the purchase; this will verify that the check is good. If you must take cash, get the buyer to sign in receipt of the vehicle. Personal checks are not advised.

It's also helpful to provide the buyer with any maintenance logs or other paperwork associated with that vehicle.

Handy hints for selling your car:

• Determine the fair market value of your car by researching the Kelley Blue Book. Print out market comparisons to show potential buyers the value of your car.

• Plan to advertise online, in your local newspaper, or in a local car buying guide.

• Clean up your car. Make needed repairs.

• When you sell the vehicle, remove the license plate. The buyer must apply for a new tag.

Titles and Registrations

Alabama law requires the seller to have a clear title to the vehicle being sold. It is against the law to buy or sell a car without a clear title and up-to-date registration, so buyer beware if someone attempts to do this with you.