8 Documents to Bring When You Buy a Car

Before getting your dream car, you may need documents such as a loan pre-approval application, proof of income, proof of car insurance coverage, government ID, and more.

While handling the necessary paperwork might not be the most exhilarating part of the car-buying process, you won't be leaving the lot without completing it. Let's cover eight documents that can help you be in and out of the dealership with as few hiccups as possible.

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8 documents to bring when you buy a car

1. Loan pre-approval application

If you don't have the cash to purchase a car outright and you don't plan on buying a car with a credit card (yes, that's something you can do), the first step will be getting approved for an auto loan.

That way, you'll have an idea of how much you can borrow, and you can set realistic expectations about how much you can afford to spend. It will also help you focus only on cars that fall within that price range and give you clarity on what add-ons you can get.

With a car loan pre-approval in hand, you'll also be able to make better negotiations with the dealer since you won't be tempted to take whatever financing option is available. If the dealership really wants to make the sale, it may even try beating the interest rate your lender is offering.

2. Proof of income

Regardless of where you get your financing, whether it's the dealership or your bank or credit union, providing proof of income is a must for a successful car purchase. Lenders won't be willing to shell out money to car buyers who aren't able to show a steady income and the ability to make monthly payments.

In other words, you'll need to prove you can pay back the loan. Some lenders may even contact your current employer to verify your income information.

Before you head to the dealership, make sure you have proof of income. This can be recent paystubs or bank statements for a few recent months.

3. Proof of car insurance coverage

Depending on the dealership and the lender that's financing your brand-new car or used vehicle, you might need to show proof of insurance for the vehicle you're buying before you're able to drive it off the lot.

However, if you already have auto insurance on your current vehicle, you may be able to use it to take your car home with you. You'll be expected to contact your insurance agent and make the changes to your auto policy in a timely fashion so your new car is insured for regular driving and use.

Insurance premiums differ depending on the car, so if you aren't sure exactly which car you'll be buying, get a quote from each of the best car insurance companies for each vehicle you're considering. You can use vehicle identification numbers (VINs) or each car's year, make, and model to get a quote. That way, you'll know where each car fits into your budget.

4. Proof of identity

When you're ready to purchase a car, be sure to have valid and acceptable proof of identity with you.

It's essential that the car dealership, bank, or credit union has proof that you are who you say you are and will require identification. Acceptable forms of identification typically include most government-issued IDs, such as:

• Valid driver's license
• State ID
• Passport

5. Proof of residence

You may need to prove to the dealership or the lender that you live at the address you say you do. This means providing proof of residency that may be one of these commonly accepted forms:

• Recent bank statements
• Current mortgage or rental agreement
• Credit card bills
• Utility bills
• Property tax bill
• Insurance policy

6. Trade-in paperwork

Depending on the car, trading in your old vehicle can be a great way to reduce the price of the car you're buying, but it's not as simple as handing over the keys.

Aside from bringing your used car to the car dealer, you should also bring all sets of keys, the certificate of title, vehicle registration paperwork, and any additional paperwork you may have from the Department of Motor Vehicles (DMV).

If you've kept all your maintenance and service records, it's a good idea to bring those as well, as your vehicle history will show you took care of the vehicle, and it can positively impact the trade-in value.

7. Bank account information (for trade-ins)

If you're still paying off your current car, don't forget to bring details of the loan with you to the dealership, such as the lender's contact information and your account number.

You may want to call the lender yourself, explain that you're trading in the car, and ask how they'd like you to facilitate the transfer.

If the appraised value of your trade-in is more than your loan balance, you should have equity in the car. The dealer may pay off the loan and cut you a check for the remainder, which you can use as a down payment on your new car.

If, however, the appraised value is less than the loan amount, you'll either have to cover the difference yourself or you can roll it into the new loan. Rolling it into a new loan will be more expensive, as you'll have to pay interest on it.

8. Discount and rebate information

Some car dealerships may offer certain discounts to attract customers. These discounts may be aimed at certain groups, such as military members or first responders. Some car dealerships or auto manfucaturers may also offer rebates, which are a form of cash back that you get after completing your sale.

Whether you're hoping to qualify for a discount or a rebate, make sure to have the supporting documents you need. For example, if you are a member of the military, you may need to provide proof of your status, such as a military ID.

FAQs about buying a car

The bottom line on what to bring when buying a car

If you're a first-time buyer, be ready to spend a couple of hours at the dealership, since the process of buying a car requires a bit of time — no matter how prepared you are. And, of course, make sure you know what to bring when buying a car.

Having everything you need before heading to the dealership can help the process from dragging on even longer. It may even prevent any unplanned trips back home or to the bank. Make sure all of your paperwork is in order, and go get yourself a new ride.