In Arizona, the legal framework for buying a vehicle is primarily governed by Title 28 of the Arizona Revised Statutes (ARS). This title covers transportation-related regulations, including vehicle purchases, title transfers, and registration requirements.
Key sections relevant to vehicle transactions include ARS Section 28-2051, which mandates the need for a certificate of title when purchasing a vehicle and outlines the process for transferring ownership. Additionally, some sections of the ARS provide regulations for vehicle dealers, detailing licensing requirements and consumer protections.
Furthermore, state laws specify the necessary documentation and responsibilities of both buyer and seller for the transfer of title and registration of a purchased vehicle. Lastly, they cover the issuance and transfer of special license plates.
These statutes collectively ensure that vehicle transactions in Arizona are conducted legally and transparently.
What Is the Process for Buying a Car in Arizona?
In Arizona, the car-buying process varies depending on whether the purchase is from a private seller or a licensed dealer.
The Motor Vehicle Division (MVD) of the Arizona Department of Transportation (ADOT) provides guidelines to help buyers protect themselves when buying a new or used vehicle. They ensure customers understand their rights and protections throughout the car-buying journey, regardless of whether they are dealing with a private seller or a licensed dealer.
Buying a Vehicle from a Private Seller in Arizona
Buying a vehicle from an Arizona private seller has advantages and disadvantages.
The advantages include potentially lower prices and negotiating directly with the owner. However, the disadvantages are the lack of warranty, limited legal protections, and the need for thorough inspections to avoid hidden issues.
For a safe transaction, the AZ MVD recommends that the buyers exercise caution and consider the following actions when purchasing from a private party.
Title Verification
Vehicle title verification in Arizona is an essential step when buying a car.
First, the buyer should verify the person selling the car is the same owner listed on the vehicle title. The title should include the owner's legal name, address, vehicle identification number (VIN), model details, current license plate, and mileage at the time of issuance. The buyer can confirm the seller's identity by checking the seller's photo ID.
As long as an individual has a VIN, online title verification can be done by visiting the AZ MVD Now website and navigating to "check vehicle title status" under "Title."
If someone other than the owner is selling the vehicle, they must have prior authorization, like a notarized power of attorney or court order.
If the seller's name is not on the title and there is no proof of authorization, the buyer should avoid the deal, as the car could be stolen or salvaged.
If the car is salvaged, it will have a salvaged title. The insurance company considers salvaged vehicles a total loss because of a severe accident.
Vehicle History Reports
Vehicle history reports in Arizona provide valuable insights into a car's past, helping potential buyers make informed decisions. These reports can be obtained from various sources, including CARFAX or AutoCheck. They offer detailed information about the vehicle's previous owners, any documented damages, and accident history.
Arizona also adopted the NMVTIS (National Motor Vehicle Title Information System), which helps protect consumers from vehicle-related fraud. Consumers can get vehicle history reports from NMVTIS-approved providers, which include details about the title, last title date, brand history, odometer reading, total loss history, and salvage history.
VIN Check for Vehicle Liens
Vehicle Liens in Arizona are essential considerations when purchasing a used car.
Prospective buyers can request a check of a motor vehicle record online through the AZ MVD Now system or at any AZ MVD office or authorized third-party location by providing the VIN. This check reveals any issues in the motor vehicle record, including current financial or operation of law liens.
Financial liens are listed on the front of the title under "Lienholders." These liens last for a specific period, and once settled, the vehicle owner gets a lien release. The owner can obtain a new title from the MVD or an authorized third-party office with this release.
On the other hand, unresolved financial obligations, like court fines or child support liens, aren't shown as financial liens on the title. Known as operation of law liens, they don't have a set period and can be added or removed at any time. These must be paid before transferring the title.
Note that new liens are added to vehicles daily, so there is a risk if buyers check the record and pay for the car at a later time. To secure a smooth transaction, verify the vehicle's lien status as close to the purchase date as possible.
Emissions Inspection Requirements
Arizona residents must adhere to emissions inspection requirements when buying or selling a vehicle in the Phoenix or Tucson metropolitan areas.
These requirements vary based on the vehicle's type, model year, fuel type, and weight. However, there are exceptions to this rule. Cars that are five years old or less, manufactured in 1966 or earlier, or classified as electric cars are typically exempt from the emissions testing requirement.
For appropriate compliance, visit myAZcar.com. This website provides buyers and sellers with detailed information and guidance on meeting state regulations and maintaining air quality standards.
Odometer Disclosure Statement
In Arizona, the Odometer Disclosure Statement is a crucial part of the vehicle buying process, as outlined in ARS Section 28-2058. This statement ensures accurate mileage reporting during vehicle sales and is necessary for title transfers.
Odometer disclosure is required for the first ten years for vehicles from the 2010 model year and older. Starting January 1, 2021, federal rules mandate that cars from the 2011 and newer models require odometer disclosure for the first 20 years.
Once a vehicle surpasses the 10-year or 20-year requirement based on its model year, the odometer disclosure is no longer needed for future sales.
Ownership Transfer
Transferring vehicle ownership in Arizona involves transferring the title. This can be done online through the AZ MVD Now website using the eTitle Transfer service, which saves a trip to an MVD office.
If the vehicle was titled and owned in another state before moving to Arizona, the AZ MVD might not have a copy of the title. In such cases, the seller must sign the back of the out-of-state title and have the signature notarized.
Arizona law mandates completing a title transfer within 15 days to avoid penalty charges.
After the title transfer, the seller must remove the license plate. Additionally, the seller might be eligible for credit on registration fees previously paid by completing a "sold notice" on the AZ MVD Now website.
Once a private car sale is completed in Arizona, the buyer must visit the local MVD to register the vehicle. The required documents typically include the bill of sale, a completed title, a Title and Registration Application form, and any applicable lien-release documents.
Bill of Sale
A bill of sale is an important document when transferring vehicle ownership. It serves as proof of the sale transaction and helps protect the buyer and seller.
This document should include details such as the vehicle's make, model, year, and VIN, as well as the buyer's and seller's names and addresses. It should also state the sale price and the date of the transaction.
A bill of sale isn't legally required for vehicle sales in Arizona but is highly recommended to establish a clear transaction record and resolve future disputes.
Buying a Vehicle from a Licensed Dealer in Arizona
Buying a used car from a licensed dealer in Arizona offers the assurance of legal compliance and documentation.
Dealers also often offer financing options, warranties, and guidance on title processing, making it convenient for buyers. However, buying from a dealer may come with higher prices due to dealership fees and markups.
To navigate the process smoothly and benefit from buying from a trusted dealer, buyers should remember the following key points.
Licensed Dealer Check
When buying a vehicle from a licensed Arizona dealer, buyers should thoroughly check the dealer's credentials. This includes verifying the dealer's license status with the AZ MVD.
Additionally, buyers should ensure the dealer has a good reputation and reviews from previous customers. It is essential to confirm that the dealer provides clear and accurate information about the vehicle's history, pricing, and any warranties or guarantees offered.
Buyer's Guide
Buyers should pay attention to the Buyer's Guide provided by the dealer when purchasing a car from a licensed dealer in Arizona.
This guide, mandated by the Federal Trade Commission (FTC), offers valuable information about the vehicle's warranty coverage. It outlines whether the car is sold with a warranty, the type of warranty, and what specific parts and systems are covered.
Transferring License Plates and Temporary Registration Plates
Buyers purchasing a vehicle from a licensed dealer in Arizona can transfer license plates from their previous car to the newly acquired one.
For this process, buyers must provide the dealer with the plate number. Depending on eligibility, buyers may apply for a credit or request a refund for the transferred plate. The dealer will assist with this and provide a form to indicate the selection.
Upon purchase, the dealer will issue a Temporary Registration Plate (TRP), allowing the buyer to operate the vehicle until the new registration arrives by mail. Once received, the buyer must remove the TRP and attach the transferred plate from the previous vehicle, along with the new tabs received in the mail. This ensures legal and proper registration of the new car.
Purchases from an Out-of-State Dealer
An out-of-state dealer must submit specific documents for Arizona title and registration when selling a vehicle to an Arizona resident. These documents include a completed Title and Registration Application form with a copy of the customer's Arizona Driver's License or Identification.
An emissions compliance form is required for vehicles under five years old and kept in non-attainment areas (like Phoenix and Tucson).
The dealer must also provide the out-of-state title or Manufacturer's Certificate of Origin (MCO) with dealer reassignment if applicable, a signed Power of Attorney if needed, a purchase order or sales invoice, Lessor Authorization for leased vehicles, and an Odometer Disclosure form or Power of Attorney with Odometer Disclosure.
If exempt from the license tax, include a signed and notarized Vehicle License Tax Exemption form.
When submitting these documents to the ADOT MVD office, pay all title and registration fees, along with the Arizona State/City Vehicle Use Tax.
Purchasing a vehicle is a significant investment. If a deal appears too advantageous, it likely warrants caution. Prospective buyers are advised to thoroughly review the car-buying checklist available on the official ADOT website to protect themselves throughout the process.
Lemon Law in Arizona
The Lemon Law in Arizona is designed to protect consumers who purchase defective new or used motor vehicles.
If a new vehicle can't be fixed after a reasonable number of tries within two years or 24,000 miles, the manufacturer or dealer must replace it or refund the total amount. A reasonable number of attempts is defined as four or more repairs for the same issue or if the vehicle is out of service for a cumulative total of 30 or more calendar days due to repairs.
However, the manufacturer or dealer might not be liable if the issue doesn't significantly affect the vehicle's function or value or if it stems from misuse, neglect, or unauthorized alterations.
For used cars, Arizona's Lemon Law provides an implied warranty of merchantability for the first 15 calendar days or 500 miles after delivery, whichever comes first. If the vehicle is unsafe or has significant defects, the purchaser can seek repairs or a refund, subject to certain conditions and fees.
What Are the Fees for Buying a Car in Arizona?
Buyers must be prepared for several fees when buying a car in Arizona. One of the main fees is the vehicle license tax, calculated based on the vehicle's assessed value. The assessed value is 60% of the manufacturer's base retail price, reduced by 16.25% yearly since the car was first registered in Arizona.
The vehicle license tax rate is $2.80 per $100 of assessed value for new vehicles and $2.89 per $100 for used cars.
For example, a $30,000 vehicle would have a first-year vehicle license tax of approximately $504, while an $18,000 vehicle would have a tax of around $302.40 for the first year.
In addition to the vehicle license tax, buyers must pay other fees, such as a $1.50 air quality research fee, a $4 title fee, and an $8 registration fee. Postage fees may also apply if the registration process is done through the mail.
Lastly, individuals who purchase a vehicle from a dealer may owe use tax in Arizona. The state use tax rate, also known as the state transaction privilege tax (TPT) rate, sometimes called sales tax in Arizona, is 5.6%, and there is no county use tax.
However, city use tax rates vary by location, and individuals can look up the applicable rate using the Arizona Transaction Privilege Tax Look Up Tool provided by the Arizona Department of Revenue (ADOR).
What Are the Insurance Requirements for Vehicles in Arizona?
In Arizona, all drivers must carry a minimum level of auto insurance coverage. Starting July 1, 2020, the minimum coverage limits have increased to:
- $25,000 for one person's injury or death
- $50,000 for injury or death of two or more persons
- $15,000 for property damage
All new auto insurance policies issued or renewed on or after July 1, 2020, must provide at least these 25/50/15 coverage limits. If a driver's current coverage is below these minimums, their limits will automatically increase when their policy renews, potentially leading to a premium increase.
Failure to maintain the required insurance can result in significant penalties for drivers. For a first offense of driving without insurance, individuals face a $500 fine, a three-month suspension of their driver's license, registration, and license plate, and a requirement to carry an SR-22 certificate for two years.
An SR-22 certificate is a form that certifies to the AZ MVD that the driver meets the state's liability insurance requirements. Drivers convicted of serious driving or traffic offenses in Arizona must obtain an SR-22 to reinstate their licenses after suspension.
Can a Non-Resident Buy a Car in Arizona?
Non-residents can certainly buy a car in Arizona, but they need to follow specific procedures. If a person who is not an AZ resident purchases a vehicle in the state, they must obtain a 90-Day Non-Resident Permit to drive the car back to their home state legally.
It allows the non-resident buyer to operate the vehicle in Arizona for up to 90 days, giving them ample time to complete the registration process in their home state.
To obtain this permit, the non-resident buyer must visit an AZ MVD office or an authorized third-party provider. They must present their dealer invoice or assigned vehicle title, provide out-of-state identification, and pay a $15 fee.