Buying A Car in Indiana: What To Know
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The legal process to buying a car can vary depending on where you live, as each state’s agency has their own requirements for driver licensing and vehicle registration. If you have never had to walk through this process before, or only have experience with purchasing a vehicle in another state, all the red tape can seem a bit confusing at first.
This guide will cover everything you need to know about how to buy a car in Indiana, whether you are purchasing new or used, from a dealership or a private owner. We’ll go over the steps to take, the forms you will need, the potential costs and fees, and other optional pieces of the process.
How to Buy a Car in Indiana from a Dealer
One of the advantages of going through a dealer instead of a private owner is that most dealerships handle a majority of the red tape and paperwork for you.
What You’ll Need
- Proof of Insurance – Most dealerships will require you to show proof of car insurance before driving off the lot. The BMV will also require it during the vehicle registration process.
- Driver’s License – Not only will you need your driver’s license for any financing, but you will also need it to complete your vehicle purchase, and again for proof of address when you submit your paperwork to the Indiana BMV.
- Application for Certificate of Title – The dealership should complete and submit this paperwork for you within 45 days of your purchase. This can take a few weeks, which is why your car will be equipped with temporary tags while you wait.
It is also recommended that you keep a copy of the Bill of Sale in the vehicle during this waiting period in case you are pulled over. * Vehicle Registration – Once you receive the vehicle title from the dealer, you will need to complete your registration on the car. In many cases, this can be done online. If it has been more than 60 days or you obtained your vehicle with a lease you must visit the BMV in person.
When you are registering a vehicle for the first time, you will be charged an annual tax called an excise tax and a registration fee. Some counties also require a separate municipal excise tax or a wheel tax. * License Plate – As mentioned, your car will come off the lot with temporary license tags. Whether your vehicle is new or used, you will need to obtain your own new set of plates. You can use a set of your own plates from another vehicle that was previously registered to you, or order new plates from the BMV. If you use your own plates, you must submit proof that you no longer own that vehicle and pay a small plate-transfer fee of $9.50. * Sales Tax – When you purchase your new car from a dealership, your sales tax is paid at the time of sale and the burden is on the dealer to provide the state with proof.
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How to Buy a Car in Indiana from a Private Owner
When you purchase a vehicle from a private owner, there are additional steps you will have to take on your own in order to complete the transfer of ownership.
What You’ll Need
- Proof of Insurance & Proof of Residence – The Indiana BMV will require these items from you before you can register a vehicle to your name.
- Vehicle Title – When you are purchasing a car from a private seller, make sure they provide you with their original vehicle title with the seller and purchaser sections completely filled out. You will need this throughout the purchase process.
- Application for Certificate of Title – After you purchase your car, you will need to complete and submit the Application for Certificate of Title for a Vehicle in order to receive a new vehicle title in your name.
The title application fee is just $15. In Indiana, you have 45 days after purchase to apply for your new certificate of title. Past this date, a $30 administrative penalty fee will be charged. (Note: There is an optional $25 “speed fee” for expedited processing.) * Vehicle Registration – You will need to follow the same process (listed in the previous section) as if you purchased your car from a dealership. * License Plate – In some states, the license plates travel with the car. However, in Indiana, when you register a previously owned vehicle to your name, the seller will remove the plates and you will be required to obtain new ones using the same process listed in the previous section. * Sales Tax – When you purchase a car from a private seller, you will still need to pay sales tax to the state of Indiana. However, instead of paying it at the dealership, you will pay it directly at the BMV when you apply for the Certificate of Title.
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Buying a Car From Another State
Sometimes your dream car has to travel before it reaches your garage. When you are buying and registering a vehicle from out of state, the process is slightly different than if you are transferring ownership of a car that already has an Indiana title.
What You’ll Need
- Proof of Insurance & Proof of Residence – Especially if you are titling an out-of-state car due to a recent move, the Indiana BMV will require these items from you before you can register a vehicle to your name.
- Vehicle Inspection – When you are registering a vehicle from another state, Indiana requires a quick visual inspection.
According to the Indiana BMV, this inspection can be performed at any BMV location for free, or by a law enforcement officer for a small $5 fee. If you choose to use the services of an officer, you should receive a form to take to the BMV known as Physical Inspection of a Vehicle or Watercraft.
- Application for Certificate of Title – Even if you purchased your car from a dealership, you will need to complete and submit the Application for Certificate of Title for a Vehicle yourself in order to receive a vehicle title from the state of Indiana.
- Request for Title (optional) – If your vehicle still has a lien (ownership claim from a lender) on it from another state, the title must first be released to you before it can be registered in Indiana.
You may need to visit the BMV in person to complete a Request for Title form. According to the BMV, the lienholder must sign off in the proper section of the title or provide you with a letter of lien release. * Vehicle Registration & Plates – Once you have your Indiana title, you will need to follow the same process and pay the same fees as listed in the first section. * Sales Tax – Sales tax must still be paid on your out-of-state purchase. Thankfully, if you already paid sales tax to another state when purchasing your vehicle, you will receive credit for that payment.
Although the state of Indiana will not double tax you, you may need to pay the difference if the tax rate of the other state is lower than Indiana’s 7%.
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Other Items You May Need to Buy a Car in Indiana
There are a few special situations not covered by the sections above. These optional items are only needed under certain conditions.
- Odometer Disclosure Statement (optional) – This form is only needed if the odometer portion of the certificate of title is not completed.
- Statement of Existing Lease Agreement (optional) - This form is only needed if your car is financed as a lease and not a purchase.
- Emissions Test (optional) – An emissions test is required if you reside in Lake or Porter county.
Final Thoughts
While Indiana has some steps of the car buying process that are different from other states, the BMV has laid out the procedures clearly for vehicle owners to follow.
When you are preparing for the specifics of how to buy a car in Indiana, always be sure to check the Indiana BMV website for the latest information, and updated forms.
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