Vehicle buying in Kentucky is regulated by several specific laws and codes. Some key provisions are found in Chapters 186A and 190 of the Kentucky Revised Statutes (KRS), which outline requirements for transferring vehicle ownership, like undergoing inspection by a certified inspector before title transfer and disclosing the odometer.
The Federal Trade Commission (FTC) also enforces the "Used Car Rule," which requires used car dealers to display a "Buyers Guide" on each vehicle, detailing warranty information and advising buyers to have the car inspected by an independent mechanic.
Compliance with these laws is crucial. It guarantees the legal transfer of vehicle ownership, protects the buyer from potential disputes, and ensures that all taxes and fees are correctly paid. Furthermore, it safeguards buyers from fraud and deceptive practices, providing a framework for recourse if issues arise.
What Is the Process for Buying a Car in Kentucky?
In Kentucky, the car buying process differs depending on whether the purchase is from a private individual or a licensed dealership.
The Division of Motor Vehicle Licensing (DMVL) and the County Clerk's Offices, operating under the Kentucky Transportation Cabinet (KYTC), and the Kentucky Motor Vehicle Commission (KYMVC) provide guidelines to help protect buyers when purchasing a new or used vehicle within the state, regardless of the seller's status.
These guidelines cover essential aspects such as understanding the purchase contract, knowing the vehicle's history, obtaining a vehicle inspection, and being aware of odometer law, lemon law, and consumer rights.
Buying a Vehicle from a Private Seller in Kentucky
Purchasing a vehicle from a private seller in Kentucky has its own pros and cons.
On the plus side, buyers may negotiate a lower price by dealing directly with the owner. However, there are also drawbacks, such as the lack of warranty coverage, limited legal protections for the buyer, and the necessity for thorough inspections to uncover any potential hidden problems with the vehicle.
Buyers should exercise caution and consider the following precautionary measures to ensure a safe and secure transaction when buying from a private party in Kentucky.
VIN or Title Check
Before purchasing a car from a private seller in Kentucky, conducting a VIN (vehicle identification number) or title check is essential to ensure the authenticity of the vehicle and the seller. Kentucky offers the Online Vehicle Information System (OVIS) for this purpose.
By accessing OVIS, users can verify vehicle owner, title, registration, and lien information for cars, trucks, motorcycles, and RVs.
To utilize OVIS, interested individuals must register as a Kentucky.gov user and be authorized under the provisions of the Federal Driver's Privacy Protection Act of 2000 (DPPA).
The registration process involves signing up on the Kentucky.gov website and completing the necessary agreements, including the Kentucky.gov Subscriber Agreement and the VTI Agreement, which confirm the user's DPPA authorization.
Once registered and subscribed, users can search for vehicle information using the VIN or title number. The initial search incurs a charge, but users can continue monitoring the same record's status for up to 60 days without additional costs.
For further information and subscription details, contact Kentucky.gov at support@kentucky.gov or call (502) 875-3733.
Vehicle History Reports
Vehicle history reports provide valuable insights into a car's past, aiding potential buyers in making informed decisions. These reports can be obtained from various sources, such as CARFAX, AutoCheck, or the KYTC.
The KYTC offers vehicle history records to the public, which can help clarify issues related to odometer accuracy, transfer dates, owner details, salvage status, and title errors.
To request a report, sellers must complete the appropriate form and pay a $3 fee along with other applicable charges. The available forms for requesting vehicle history reports from the KYTC include:
- Request for Motor Vehicle and Boat Records (TC 96-16A)
- Governmental Agencies' Request for Vehicle Records (TC 96-16G)
- Request for Personal Information for Motor Vehicle Fuel Theft (TC 96-16B)
- Request by Towing & Storage Companies and by Creditors in Possession (TC 96-16T)
Forms must be submitted to the address below:
Kentucky Transportation Cabinet
Division of Motor Vehicle Licensing
P.O. Box 2014
200 Mero St.
Frankfort, KY 40622-2014 USA
ATTN: Records Management
Requests are typically processed within 3 to 5 business days, and the reports are sent to the customer via email or mail as requested.
Odometer Disclosure Statement
According to Section 190.300 of the KRS, sellers must provide buyers with a written Odometer Disclosure Statement.
This statement must be completed, signed, and dated by the seller. In certain cases, the seller's signature may also require notarization. The completed disclosure statement should be attached to the Kentucky Application for Certificate of Title/Registration or Form TC 96-182 when submitting it to the County Clerk's Office.
The Odometer Disclosure Statement should clearly indicate the cumulative mileage recorded on the vehicle's odometer. If the seller knows that the odometer reading differs from the actual miles the car has traveled, they must disclose this information on the statement. Knowingly providing false odometer information to the buyer is illegal.
Failure to comply with this requirement or providing false statements can lead to fines and even imprisonment under Kentucky's odometer law. When an odometer correction is necessary, the seller can update the mileage on the title by completing an Affidavit of Mileage Correction (TC 96-322) and having the County Clerk perform the correction.
Sheriff's Inspection
In Kentucky, individuals who purchase a vehicle from another state must have it inspected by the Sheriff's Office in the county where they plan to register the car. This process, known as the Sheriff's Inspection, confirms the vehicle meets safety standards and verifies ownership.
During the Sheriff's Inspection, a certified deputy sheriff will examine the VIN and cross-reference it with the number listed on the title or certificate of origin. Additionally, the deputy will thoroughly inspect the vehicle's safety features, including lights, brakes, horn, wipers, turn signals, glass, tires, exhaust system, and other critical components.
To initiate the inspection process, individuals must present the vehicle's title and a valid driver's license.
Ownership Transfer
When transferring vehicle ownership in Kentucky, the process should be completed within 15 days of the sale.
If both the buyer and seller are Kentucky residents, the seller needs to sign the back of the title in front of a notary to transfer ownership officially. The buyer then takes the signed title, proof of Kentucky insurance, ID, and required fees to the County Clerk's Office for the transfer. Older titles from before 2000 may need a TC 96-182 form for the transfer.
If the title has two owners and one party is unavailable, a Power of Attorney form signed and notarized by the absent party is acceptable.
Bill of Sale
A bill of sale is a document that serves as proof of a vehicle transaction between a buyer and seller in a private sale. While Kentucky does not legally mandate a bill of sale, some counties may require it to complete a private vehicle sale.
A valid bill of sale in Kentucky should typically include the following details:
- Full names and signatures of both the buyer and seller
- Date of the transaction
- A comprehensive description of the vehicle, including the VIN
- Purchase price
- Odometer reading
Although a bill of sale does not establish legal ownership of the vehicle, it provides evidence that a consensual vehicle transfer occurred between the parties involved. In the event of any legal disputes or challenges regarding the transaction, a properly executed bill of sale can act as crucial documentation supporting the agreed-upon terms and conditions of the sale.
For those requiring a sample template, several bill of sale forms are available online that can be customized according to the specific needs of the transaction.
Buying a Vehicle from a Licensed Dealer in Kentucky
While certain forms and processes are similar when purchasing from a private seller, buying a used car from a licensed dealer in Kentucky provides buyers with the assurance of legal compliance and proper documentation.
Dealers also often offer financing options, warranties, and guidance through the title processing, making the experience more convenient for buyers. However, purchasing from a dealership may incur higher costs due to various fees and markups.
For a smooth transaction and to fully benefit from buying from a reputable dealer, buyers should keep the following key points in mind:
Licensed Dealer Check
In Kentucky, it is a legal requirement for motor vehicle dealers to obtain a license from the KYMVC, as stated in KRS 190.030. This statute outlines the application process, licensing requirements, and administrative regulations that dealers must comply with.
Additionally, dealers must prominently display their licenses, fulfill bonding requirements, and meet reporting obligations.
To verify if a dealer is licensed, prospective buyers can contact the KYMVC directly, visit their office, or check the commission's list of all authorized dealers operating within the state.
Buyer's Guide
If someone is buying a used car, the FTC's used car rule can be beneficial. This rule requires all used car dealers to display a large sticker called the "Buyers Guide" in a visible place on each used vehicle they offer for sale.
The Buyers Guide provides essential information, such as:
- Whether the vehicle comes with a warranty and details about the warranty coverage
- If the car is sold "as is" with no warranty
- Common significant problems that might occur in any car
- A recommendation to have the vehicle inspected by the buyer's mechanic before purchase
- The importance of getting all promises in writing
When purchasing a used car from a dealer, buyers should receive the original or an identical copy of the Buyers Guide. This guide should include any changes in warranty coverage negotiated with the dealer and become part of the sales contract, overriding any conflicting terms.
Dealers must post the Buyers Guide on all used vehicles, including used cars, light-duty vans, and trucks. The rule also covers demonstration cars, but motorcycles are excluded.
On the back of the Buyers Guide, buyers will find the name and address of the dealership. Below that, the name and telephone number of the person at the dealership to contact for any complaints after the sale are provided.
Warranties and Buyer's Rights
The FTC Buyer's Guide, which must be visibly posted on the vehicle, indicates whether the car is being sold "As Is" or with a warranty. If a warranty is provided, it will detail the specific coverage. In some cases, a manufacturer's warranty may still apply, but it won't be honored if the odometer has been tampered with or the issue is due to a previous accident.
If there are specific misrepresentations, the buyer may have a claim for fraud or a private claim under Kentucky's Consumer Protection Act. Additionally, the buyer might revoke acceptance under the KRS Chapter 355 or the Uniform Commercial Code. Consulting a private attorney is necessary for these matters, as the Attorney General cannot represent individuals.
There is no statutory right to cancel the sale, even if done immediately. If necessary, a complaint can be filed with the KYMVC. However, the agency cannot represent individuals or provide additional rights if the car was bought "As Is."
Lemon Law in Kentucky
Kentucky Lemon Law protects consumers who purchase new motor vehicles that fail to perform as promised under the vehicle's express warranty. This law holds manufacturers responsible for addressing certain defects rather than the dealership.
To qualify for protection under the Lemon Law, the vehicle must be a new purchase made in Kentucky, excluding motor homes, motorcycles, mopeds, farm tractors, and cars with more than two axles. Additionally, the vehicle must not have undergone substantial alterations since the purchase.
The defect in question must be covered under the express warranty and substantially impair the vehicle's use, value, or safety. The manufacturer is not liable for defects caused by abuse, neglect, or unauthorized alterations.
If the same defect requires at least four repair attempts or renders the vehicle unusable for 30 days within the first 12 months or 12,000 miles (whichever comes first), the car is considered a "lemon." In such cases, the manufacturer must replace the defective vehicle or provide a full refund minus a reasonable deduction for the vehicle's use.
What Are the Fees for Buying a Car in Kentucky?
When buying a car in Kentucky, the fees may vary by county. However, most counties in the state will incur the following costs:
Road Usage Tax
A 6% Kentucky road usage tax is charged based on the retail price, which can be either the NADA retail price or the purchase price. If the tax is based on the purchase price, the seller must disclose the purchase price on the application, sign it as the seller, and have it notarized. Note that the taxable value must be at least 50% of the NADA "trade-in" value.
Property Tax
The Property Valuation Administrator assesses property taxes on vehicles, trailers, and boats on January 1st each year. Vehicle owners are responsible for paying property taxes on any vehicle registered in their name on January 1st.
Note that any delinquent property taxes owed may impede the issuance of the vehicle's title and registration.
Sheriff's Inspection Fee
Individuals who purchase a vehicle from another state may be subject to an inspection fee.
The cost of the Sheriff's Inspection may vary slightly between counties, but it is typically around $5. However, if a business needs to have multiple vehicles inspected, an additional fee may be charged for each trip the deputy requires.
Title Transfer Fee
Buyers must pay a one-time fee of $4 to transfer the vehicle's title into their name. There is an additional $2 fee for notarization.
Clerk Fee
The Clerk's Office typically charges a nominal fee of $6 to cover the administrative costs of processing the necessary paperwork.
Plate Fee
Buyers must pay a $21 annual plate fee to register the vehicle and obtain license plates. Kentucky also offers the option to get special plates for an additional cost. These special plates allow vehicle owners to personalize their plates based on specific purposes or interests.
Documentation Fee
Dealerships may also charge a documentation fee for processing the paperwork related to the sale. This fee can vary between dealerships.
For more specific information on the applicable fees, contact the appropriate County Clerk's Office and/or the respective licensed dealer.
What Are the Insurance Requirements for Vehicles in Kentucky?
Per Kentucky's mandatory insurance, vehicle owners must have insurance before operating their vehicles. The state requires minimum liability coverage, which includes $25,000 for bodily injury to one person, $25,000 for property damage, and $50,000 for bodily injury to multiple persons per accident. Alternatively, a single-limit policy of $60,000 is also acceptable.
Failing to maintain insurance can result in the revocation of the vehicle's registration. Additionally, the vehicle owner and driver may face up to 90 days in jail, fines ranging from $500 to $1,000, or both.
Can a Non-Resident Buy a Car in Kentucky?
A non-resident can buy a car in Kentucky, but there are specific requirements to follow. For non-residents, the vehicle must be registered within 15 days with the County Clerk of the county where the car will be principally operated, as per KRS 186.020.
To drive the vehicle back home, they must obtain temporary registration from Kentucky, the state of purchase. This process involves dealing with the Department of Motor Vehicles or similar agencies in both states.
When it comes to paying sales tax, non-residents typically pay the sales tax based on their state of residence, not where they purchased the car.
So, while non-residents can certainly buy a car in Kentucky, they should be prepared to handle the necessary paperwork and registration requirements in both their home state and Kentucky within the required time frame.