Buying a Vehicle in Minnesota

Title Verification

One essential precautionary measure is to verify the dealer's license status. The Minnesota DVS maintains a comprehensive list of authorized dealers that are accessible to the public. By referring to this resource, buyers can engage with a legitimate business approved by the state. This simple step can prevent potential problems from dealing with unauthorized sellers.

To access the list, buyers can utilize the "View List of Dealers" e-service through the online Vehicle Services platform.

In addition to confirming the dealer's licensing, it is also advisable to investigate their reputation. It can be accomplished by examining customer reviews and ratings from various sources.

Proof of Purchase or Bill of Sale

The purchase agreement, also known as a bill of sale, is crucial in all title transactions, including those involving dealers from other states. This document must be either the original or a certified copy, as it determines the excise tax based on the vehicle's net sale price.

Sometimes, a non-certified copy may be acceptable if the sale price aligns with the pricing set by the National Automobile Dealer Association (NADA).

Buyers must ensure that this document contains the following details:

• Vehicle details (year, make, VIN, sale price)
• Names, addresses, and signatures of both parties

In case of trade-ins, the bill of sale must include the details of the trade-in vehicle, gross sales price, and any taxes paid to an out-of-state dealer. By including this comprehensive information, buyers can ensure the accuracy of tax calculations and have a clear record of the transaction's terms and conditions.

Dealers and buyers must confirm that the information in the bill of sale matches the "Purchaser's Motor Vehicle Sales Tax Declaration" section in the Application to Title/Reg. A Vehicle (PS2000) form.

Odometer and Damage Disclosure Statements

Knowing a vehicle's odometer reading and any damage gives the buyer a ballpark estimate of a vehicle's life. These two details are usually recorded in the following sections in Form PS2000:

• Odometer Disclosure Statement
• Damage Disclosure Statement

Before purchasing a car, these statements help buyers understand the vehicle's history and potential longevity. The dealer may also separate documents for each statement. In this case, buyers can clarify with the dealer or their local DVS office. They can check nearby locations using the "Find an Office" e-service on the DVS official website.

Buyer's Guide

The Federal Trade Commission (FTC) requires dealerships to display a buyer's guide on each vehicle's window. The buyer's guide must include the following information to give the buyer a more detailed view of the history of the vehicle:

• Vehicle make, model, and year
• Previous usage history
• Where it was acquired
• Any significant mechanical issues or repairs
• Prior damage from accident, fire, or flooding
• Warranty details offered by the dealer

By providing the guide, dealerships can help buyers make sound decisions with their purchase.

21-Day Temporary Permit

Dealers can issue a 21-day temporary permit to allow Minnesota resident buyers to drive their newly purchased vehicles while processing the registration. This permit is non-extendable and must be affixed on the vehicle's rear, where the license plate is usually mounted.

Title Check

Buyers must diligently verify the seller's ownership of a vehicle. They can check the Certificate of Title, which legally establishes the seller's right to sell the car. Buyers should check that the title is in the seller's name and free of outstanding liens. The current vehicle registration should be requested and cross-checked with the title information.

Note that if the seller lost or damaged the vehicle title, they must request a duplicate. Sellers can complete the Application for Duplicate Title, Registration, Cab or Lien Card (PS2067A) and apply at the Deputy Registrar's Office or send it by mail to:

Vehicle History

Another measure to check is the vehicle's history before finalizing the purchase. The National Motor Vehicle Title Information System (NMVTIS) provides vehicle history reports through agents like CarFax or Autocheck.

These reports provide valuable information about a car's past, including the following:

• Current State Title and Last Title Date
• Brand History
• Odometer Reading
• Total Loss History
• Salvage History

VIN Check

When purchasing a used car, buyers need to know the VIN. Running a VIN check allows potential buyers to obtain detailed reports containing valuable data, such as ownership history, odometer readings, and possible title issues. A few agencies help conduct VIN checks, such as:

• National Highway Traffic Safety Administration (NHTSA) - VIN Decoder
• National Insurance Crime Bureau (NICB) - VINCheck LookUp

Furthermore, the VIN can be used to verify the car's manufacturing details to check that the vehicle matches its advertised specifications. This level of transparency helps to build trust between the buyer and the seller, ultimately leading to a more secure and satisfactory transaction.

Buyers can be more confident when they understand essential details about their purchase, such as the VIN, to maximize the value of buying a new car.

Proof of Purchase and Odometer Reading

Just like dealership purchases, private transactions require proof of purchase. The same goes for odometer readings. Buyers must coordinate with the private seller to obtain these documents. Both can also opt to use the vehicle title application form (PS2000), as this document includes dedicated sections for these details.

Ownership Transfer

A vehicle title transfer in Minnesota can be processed at any local deputy registrar's office. If the car is purchased from a licensed dealer within the state, the dealer will typically handle the necessary paperwork to facilitate the title transfer on the buyer's behalf. On the contrary, the buyer usually processes the transfer when buying from a private seller.

When Minnesota or another state issues a certificate of title for a vehicle, the transfer of ownership must be recorded on the certificate of title. The title and the necessary transfer fees must be submitted by mail to the DVS Central Office or in person at a local deputy registrar's office.

If the title has been lost, the owner must obtain a duplicate title before completing the transfer of ownership.

Minnesota vehicle titles include a Minnesota Motor Vehicle Registration Card and a Recorded Owner(s) Record of Sale. The seller should fill out and detach the Record of Sale stub from the title when selling the vehicle. The seller is then required to report the sale of the vehicle by mailing the stub to the DVS or filing a report of sale online.

If the vehicle has never been titled, the Minnesota registration card serves as acceptable proof of ownership for the buyer.

New Resident Transfers

Note that if the vehicle owner is a newly established resident of Minnesota, they have 60 days to process their transfer and registration. However, immediate registration is required if the existing registration expires within this period or has already expired.

To register, owners must provide proof of ownership, typically the vehicle title or current registration card. A release can be submitted for paid-off liens through the Notification of Lien Grant, Release, and Reassignment Form (PS2017). Ongoing liens require the current registration card until the title is surrendered.

For more information on the process, buyers can check the "New Resident" page on vehicle transfers on the official Minnesota DVS website.

Title and Registration Fees

There is an $8.25 fee for filing a title transfer, plus an additional $2 for each recorded lien. A $10 Transfer Tax is also collected upon transferring ownership. It does not apply to all vehicles, so prospective buyers should verify this with the deputy registrar.

Motor Vehicle Sales Tax (MVST)

The MVST has become a crucial transportation funding source following a 2006 constitutional amendment. The MVST is set at 6.875% tax as of July 1, 2023, on new and used motor vehicles registered in Minnesota, based on the purchase price and replacing the general sales tax.

"In Lieu of" Tax for Older Vehicles

The state provides a special sales tax guideline for older vehicles. Instead of the standard 6.875% MVST, a flat $10 "In Lieu of" tax applies for these criteria:

• the car must be at least ten years old
• have a sales price and average value of less than $3,000.

If the vehicle fails to meet both requirements, it does not qualify for the $10 flat tax, and the standard MVST rate applies. This reduced tax option aims to provide relief for consumers purchasing lower-valued older vehicles.

Wheelage Tax

Some counties also impose a wheelage tax ranging from $10 to $20. The registration tax for passenger vehicles is based on the vehicle's base value and age, with a minimum tax of $35 for vehicles ten years or older. The Minnesota DPS has a Wheelage Tax Page, which lists counties where Wheelage Tax is imposed.