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How to buy a car in Texas

in Car Buying Tips
Photo of Texas license plate

Buying a car in Texas is almost as easy as learning the two-step. However, unlike the traditional dance rhythm, there are many different ways you can approach this process. You can finance, buy with cash, buy from the dealer, or perhaps even from someone you met on social media. Given all these potential car-purchasing avenues, we’re here to break down how to buy a car in Texas, including what questions you need to ask, what documents you need to bring, and how you can walk away as a happy, satisfied new car owner.

We’re going to explore some unique aspects of car-buying in the Lone Star State as opposed to what’s universal across the country. Buying a car is a big decision. And yes, we know everything is bigger in Texas, but your car-buying journey is no different.

Therefore, without further ado, let’s dive into exactly how to buy a car in Texas!


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How to buy a new car from a dealership in Texas

Let’s say that you’ve settled on a budget and you’ve decided to buy a new car. You’ll likely find this shiny, new vehicle at a dealership. When beginning the process of looknig for new cars and engaging with a salesperson on the lot, prepare for any upselling tactics or add-ons that may make the car’s price unexpectedly climb. At the end of the day, you’re the decision-maker in this process, so be firm and confident in starting your needs and budget! 

What to bring to the dealership:

  • Driver’s license
  • Proof of insurance

Dealerships have more formal processes when it comes to purchasing cars off their lot versus private selling situations.

To buy a car from a dealership in the state of Texas, you’ll need to bring a valid driver’s license and proof of insurance. Remember: Texas requires proof of auto insurance when buying from a dealer.

What to bring if getting financing through the dealership:

  • Your last two pay stubs 
  • Proof of residence, which would be a bill (or something similar) in your name and current address
  • List of references (some dealers may not require this, but it’s always better to be prepared)

Financing options for a car bought from a Texas dealership

If you’re buying new from the dealer and don’t have the funds upfront, you’ll have to finance the car. Many dealerships have financing options. However, in Texas, you do not have to use the dealership as a financier. Before you agree to their financing, do your due diligence and shop around for reasonable interest rates and loan approvals elsewhere. Credit unions often have low auto-loan rates that beat dealership options. Compare these financing incentives with dealerships and make an informed decision from there.

Overall, buying a new car from the dealer should be a clean, straightforward process. One interestingly unique note about car-buying in Texas is that the state does not allow car manufacturers to sell to consumers directly. So if you’re looking to buy a Tesla directly from one of its showrooms, you’ll have to make the purchase out of state. Essentially, dealerships act as intermediaries, protecting consumers from skyrocketing prices while also giving the car dealerships full control of what they’re selling.

How to buy a used car from a dealership in Texas

Like buying a new car in Texas from a dealer, purchasing a used vehicle from the dealer requires additional steps. The good news? There are laws in place to protect the buyer. If you’ve decided that buying pre-owned is in your best interest, you’ll still need to bring a valid driver’s license and proof of insurance. Regardless of the dealer, you’ll always need those.

What to bring when buying a used car from a dealership:

  • Driver’s license
  • Proof of insurance

What to bring if financing a used car through a dealership:

  • Your last two pay stubs 
  • Proof of residence, which would be a bill (or something similar) in your name and current address
  • List of references (some dealers may not require this, but it’s always better to be prepared)

What to Expect

If you’re buying in cash, then you may only need your driver’s license and proof of insurance. And much like with a new car, the dealership may offer you financing options. We still recommend shopping around for the best auto-loans instead of instantly going with the dealer. So if financing a used car is in your future, you’ll still need to bring the documents mentioned above (pay stubs, proof of residence, and references). 

Some noteworthy differences in buying pre-owned from the dealer versus are what you should expect from the pre-owned seller. Regardless of new or used, you’ll receive a bill of sale for your car, which is essentially a receipt. You’ll also get an Odometer Mileage Disclosure Form, a Buyer’s Guide, and a signed Certificate of Title. A dealer is required to transfer the title in your name within 20 days of the sale.

Texas also has what’s called the Lemon Law. This law protects you as the buyer, and the law forces any warranties that are still on the car. While it won’t help you collect any money on damages, it will make the manufacturer buy back or replace your problem vehicle if it’s still under warranty. You can see if a car you purchased is covered under the Lemon Law here.


Buying used? Get a pre-purchase inspection

If you’re buying a used car, the best way to avoid problems down the road is to get a pre-purchase inspection. Here are the best pre-purchase inspection stations in Dallas, TX.


How to buy a used car from a private seller in Texas

Buying used from a private seller might be your most affordable option. However, this decision isn’t without some risk. For example, you aren’t always guaranteed a Bill of Sale and you’re also required to transfer the title. Therefore, if you’ve found a car you like online, we recommend that you consider the following things before purchasing.

What to bring when buying a car from a private seller

  • Driver’s license
  • Proof of insurance
  • A pen

What to Expect

Whoever you’re buying from, make sure they have the Certificate of Title in their possession. This Title guarantees that they are the vehicle’s current owner, and you should never walk away from a private sale without it. By signing it and writing down the odometer’s mileage, they can successfully transfer ownership to you. It’s important to remember that you need to transfer the title within 30 days of the purchase, which you easily do with this form. Don’t forget—you’ll also need the seller’s signature on this form, so it’s probably smartest to come prepared and get that autograph at the time of sale.


NEARLY-NEW CARS AT SIGNIFICANT SAVINGS

A new car loses value the second you drive it off the lot. Luckily, many used models sport the same great features as their new counterparts. Here’s where you can find nearly-new cars at significant discounts off MSRP


Get a curated list of the best cars for sale near you

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