Buying a vehicle in Iowa is governed by the Iowa Code Chapter 322. This chapter sets forth the rules and regulations surrounding the purchase of vehicles in Iowa. It covers various aspects, such as licensing requirements, business practices, and consumer protections, to guarantee a fair and transparent transaction between dealers and buyers.
The Iowa Department of Transportation (DOT) oversees the purchase of vehicles in Iowa. Specifically, its Motor Vehicle Division (MVD) serves as the primary authority that upholds the standards of the state's sale and financing of vehicles.
Understanding the guidelines of the Iowa MVD and the DOT can protect buyers from potentially fraudulent activities. They can also exercise their rights as consumers throughout the vehicle purchase process.
What Is the Process for Buying a Car in Iowa?
The car buying process in Iowa varies depending on whether the car was purchased from a dealer or a private party. The Iowa DOT provides separate guidelines for each below:
Buying from a Dealer in Iowa
When purchasing a car from a dealer in Iowa, the dealer usually handles most of the paperwork. This process can greatly lessen the burden on buyers. However, there are still some key things that buyers must do, such as the following:
Dealer Verification
Buyers should take the necessary precautions to deal with a reputable and licensed dealer. It involves verifying the active status of the dealer's license with the Iowa DOT.
The DOT maintains a list of licensed vehicle dealers, which buyers can cross-reference to confirm if their potential dealer is included. Additionally, buyers are advised to thoroughly research the dealer's reputation by examining reviews and feedback from previous customers.
Reviewing can provide valuable insights into the dealer's business practices and customer service. Furthermore, dealers must provide transparent and accurate information about the vehicle's history, pricing details, and any warranties they offer.
Buyer's Guide
Buyers should carefully review the Buyer's Guide provided by the dealer. The Federal Trade Commission (FTC) requires this Guide. The Guide typically includes the following information:
- Vehicle Description: A detailed vehicle description, including its make, model, year, and mileage.
- Price: The total purchase price of the vehicle, including all fees.
- Additional Fees: A list of additional fees or charges, such as sales tax, title and registration, and documentation fees.
- Warranty Information: Information about any warranties or guarantees provided with the vehicle.
- Disclosure of Any Known Defects: Disclosure of known defects or vehicle issues.
The Buyer's Guide is typically provided to the buyer before the sale is finalized. It is intended to help buyers understand the full cost of the vehicle and make informed decisions about their purchases.
Transfer of License Plates
To transfer the plates, the buyer must acquire the registration document and properly assign the title from their previous vehicle. The buyer should also notify the dealer upfront that they intend to transfer their existing plates to the newly purchased vehicle.
The dealer will provide the buyer with the Application for Certificate of Title and/or Registration for a Vehicle (Form 411007 ). The buyer must complete the form and give it to the dealer.
The dealer will handle the title transfer and new registration process for the vehicle the buyer purchases. The dealer will need any of the following from the buyer to initiate the plate transfer:
- Buyer's previous title and registration
- Manufacturer's Statement of Origin (MSO)
The buyer will pay the dealer the applicable title transfer fee (typically $25), registration fee, and other additional fees.
The dealer is responsible for submitting the documents to the buyer's County Treasurer's Office within 30 days of the date of sale. Note that since January 1, 2022, a Bill of Sale has been required when transferring titles and license plates in Iowa. However, the new version of the Iowa Vehicle Title Certificate already includes a section for it.
Once processed, the buyer will receive a new vehicle registration document that lists their transferred plate number.
Temporary Registration Permit
New vehicle owners in Iowa are permitted to operate their newly purchased (used) vehicle for 30 days from purchase without displaying license plates. However, this grace period applies if the previous owner has an active vehicle registration.
During this 30-day window, new owners must carry any of the following:
- Properly assigned title
- Bill of sale
- Proof of valid insurance coverage
If stopped by law enforcement during this time, new owners can present these documents as evidence of their purchase.
If the vehicle is brand-new, the dealer provides the buyer with a 30-day temporary registration permit at an additional cost while the registration process is underway. The buyer may also purchase the permit from the Country Treasurer for $25.
Odometer Disclosure Statement
The buyer and the dealer must certify the vehicle's odometer reading on sale if it is 20 years old or newer through the Odometer Disclosure Statement (Form 411077 ). This document helps maintain transparency and accuracy regarding the vehicle's mileage.
Damage Disclosure Statement
If the buyer purchases a used vehicle that is eight years or newer, a Damage Disclosure Statement (Form 411108) is required. However, if the vehicle is brand new, the form is only required if the vehicle has over 1000 miles.
Buying a Vehicle From an Out-of-State Dealer
When buying a vehicle from a dealer outside of Iowa, the buyer must complete the purchase with the out-of-state dealer as usual. The buyer must obtain the following documents:
- Sales tax receipt, bill of sale, or purchase agreement
- Out-of-state vehicle title or registration from dealer
- Manufacturer's Statement of Origin (MSO) assigned to the buyer, if applicable
- Cancellation of Security Interest (Form 411168 )
Note: This applies if the vehicle has an uncancelled lien.
- Any required emissions/VIN inspection specific to that state
If the buyer does not have a valid Iowa license plate for the purchased vehicle, they can get a 30-day transit permit or plate from the Country Treasurer. This permit or plate allows the buyer to legally drive the vehicle across state lines.
Vehicle Inspection
Once the vehicle is in Iowa, the buyer must inspect it to be titled and registered. Check the full details on the "Vehicle Inspections for Titling" page of the Iowa DOT.
Title and Registration
Note that the out-of-state dealer is not responsible for registering the vehicle in Iowa. The buyer must handle the title transfer and registration within 30 days of the purchase date. They can visit their local Country Treasurer's office or an Iowa county contiguous that borders their specific country to register.
The buyer must bring all of the following:
- All the documents obtained from the out-of-state dealer
- Application for Certificate of Title and/or Registration for a Vehicle (Form 411007)
- Vehicle inspection report or certificate
- Odometer Disclosure Statement (Form 411077) for model year 2011 or newer vehicles
- Damage Disclosure Statement (Form 411108) for vehicles eight years or newer
- Proof of insurance for the vehicle in Iowa
- $25 title fee and registration fees
The registration fee will vary depending on the vehicle's make, model, year, weight, and list price. Buyers can use the Fee Calculator to identify how much they must pay. To use the calculator, click Tools > Dealer inquiry at the top of the page. Click the appropriate tool under the Dealer Inquiry list, e.g., Fee Estimator, Vehicle Inquiry.
During the processing period, the buyer may purchase a 30-day temporary permit for $25 from the Country Treasurer to legally drive the vehicle in Iowa.
Buying a Vehicle From a Private Seller
Buying a vehicle from a private seller in Iowa may offer a lower purchase price to buyers since they can directly negotiate with the owner. However, it also carries certain drawbacks, such as a lack of warranty coverage.
To facilitate a smooth and secure transaction, the Iowa DOT advises prospective buyers to take the following actions when purchasing a private party vehicle:
Title Verification
The buyer must verify the seller's ownership of the vehicle. The buyer can check the vehicle title and seller's identification. They must verify that the seller is the same owner listed on the vehicle title. They can check the seller's photo ID for their name and address.
Then, the buyer must check the vehicle title, specifically the following details:
Information of the Seller and Buyer
The title must include the buyer and seller's legal names, addresses, and signatures. If someone other than the owner is selling the vehicle, they must have a Power of Attorney Authorization (Form 411021 ) or court order.
Vehicle's Details
The title must include the following:
- Description of the vehicle, e.g., year, make and model, body color and style
- Vehicle identification number (VIN)
- The vehicle's purchase price and date
- Any uncancelled liens on the vehicle
Vehicle History Reports
Buyers are strongly advised to get a vehicle history report. Buyers can utilize the National Motor Vehicle Title Information System (NMVTIS) to access this vital information.
The NMVTIS is a centralized database consolidating data from various state motor vehicle agencies. However, buyers must obtain vehicle history reports from NMVTIS-approved providers only. These providers have to adhere to strict standards to guarantee the accuracy and reliability of the information provided.
These reports typically include the following details:
- The current state of the title and the last title date
- Brand history
- Odometer reading
- Total loss history
- Salvage history
Getting the report can help buyers better decide whether to purchase the vehicle as it gives an in-depth look at its past to assess its condition and value.
VIN Check
Buyers should also include a VIN Check when purchasing a car, especially if they plan to buy a used vehicle. The Check will help the buyer retrieve information regarding any past insurance claims, details related to theft, or if the vehicle has been designated as having a salvage title.
The National Insurance Crime Bureau (NICB) provides a free VINCheck Lookup search tool that enables individuals to input a vehicle's VIN. However, the results obtained through this search are limited to incidents reported by insurance companies that are members of the NICB.
Emission and Pre-sale Inspections
Iowa law does not mandate an emission or pre-sale vehicle inspection. However, the buyer can have a mechanic examine the vehicle before finalizing the purchase. If the buyer opts for a mechanical inspection, they and the seller must agree on the specific details, such as the date, time, location, and who will bear the associated costs.
Before the inspection, the seller may request information about the buyer and the mechanic performing the inspection. This step can help mitigate potential risks and ensure a transparent transaction process.
Damage Disclosure
According to the Iowa Code, Section 321.69, all sellers must disclose any damage that the vehicle they are selling has through the Damage Disclosure Statement (Form 411108). This disclosure will not be required if the vehicle on sale meets these requirements:
- The vehicle is 8 model years or older. Note: Subtract 8 from the current calendar year. For example, 2024 minus 8 is 2016. It means that in 2024, vehicles that are 2016 models and earlier do not need a damage disclosure.
- The vehicle is a truck or truck tractor weighing 16,000 pounds or more.
- The vehicle is a motorcycle, moped, or scooter
- The vehicle is classified as special mobile equipment
- The vehicle is new with a true mileage of 1000 miles or less
Odometer Reading
If the vehicle is a 2011 model or newer, an odometer reading is required. The vehicle title often has a space for this information. However, if there's none, the seller must give the buyer a completed Odometer Disclosure Statement (Form 411077).
Note that starting from 2031 onwards, the requirement for providing an odometer statement will apply to vehicles less than 20 model years old at the time of title transfer.
Bill of Sale
Since January 1, 2022, a Bill of Sale has been required for transferring titles and license plates in Iowa. Sellers can use the Bill of Sale document and provide it to the buyer. However, the newer Iowa Vehicle Title Certificate version includes a dedicated section for the Bill of sale.
The additional section in the title only includes the following details:
- Transfer/Sale date
- The vehicle's purchase price
- Tick boxes to indicate if the vehicle is for sale (or gifted)
Ownership Transfer
After the sale, the buyer must register the vehicle to their name within 30 days of the purchase date. They must bring the released title, bill of sale, odometer disclosure statement, completed registration form, and other documents to their local country treasurer's office. If they have them, the buyer must bring the vehicle's out-of-state registration or lien release documents.
If the seller does not have or has lost the title, they must get a replacement before transferring ownership. The seller must complete the Application for Replacement of Certificate of Title to a Motor Vehicle (Form 411033 ) and submit it to their local country treasurer's office. The seller will also have to pay the $25 fee.
The buyer then completes the Application for Certificate of Title and/or Registration for a Vehicle (Form 411007) and pays the registration fees. The country treasurer will issue a new title and registration in the buyer's name as the new owner. The seller's old title will be canceled. The buyer can obtain a 30-day temporary permit to drive the vehicle.
What Are the Fees for Buying a Car in Iowa?
When buying a car in Iowa, there are different fees that buyers must pay, such as:
- Sales tax: 6% added on the sales price of the vehicle
- Title transfer fee: $25
- Registration fee: depends on the make, model, year, weight and price of the vehicle
- Temporary permit fee: $25
- Duplicate title fee: $25
- Documentation fee: Negotiable with the dealer
Note that vehicles subject to registration are exempted from sales tax. Instead, the buyer must pay 5% of the total sale price. Some counties may also have the 1% local options sales tax as an add-on. For more information, read the Iowa Sales and Use Tax Guide.
Also, although the registration fee varies, there is a flat fee of $50 for vehicles 12 years or older.
What Are the Insurance Requirements for Vehicles in Iowa?
In Iowa, vehicle owners are required to provide a minimum liability coverage for their vehicles amounting to:
- Bodily injury or death liability
- $20,000 per person per accident
- $40,000 for two or more people per accident
- Property damage liability: $15,000 per accident
Vehicle owners must always carry proof of their liability insurance while driving their vehicle and present it for inspection upon request by law enforcement or authorized representatives.
Failure to maintain the required insurance can result in certain penalties to the vehicle owner. As per Iowa Code Section 321.20B.4.a, the peace officer can do the following if the driver cannot show any proof of insurance coverage:
- Issue a warning memorandum
- Issue a citation
- Issue a citation and remove the vehicle's license plates and registration receipt.
The driver may also have to pay a $325 fine if they were caught but didn't cause an accident. However, if they cause an accident, they must pay a $645 fine. For more details, check Iowa Code Section 805.8A.14.f. In worse cases, the vehicle may be impounded, or the owner will undergo costly lawsuits.
Can a Non-Resident Buy a Car in Iowa?
Non-residents can purchase and register a vehicle in Iowa. However, they must adhere to the following conditions:
- Non-residents cannot permanently register and title the vehicle in Iowa since they do not reside there. Instead, they will likely need to obtain a temporary registration or transit permit from the Iowa DOT.
- Non-residents must pay any applicable Iowa sales taxes on the vehicle purchase
- Non-residents will need to show proof of insurance that meets Iowa's minimum liability requirements when purchasing.
Once back in their home state, the non-resident must properly title and register the Iowa-purchased vehicle through their state's DMV and pay any other taxes/fees required.
The dealer typically handles the registration process if buying from an Iowa dealer.
If the non-resident is an armed forces member, they are not required to register their vehicle in Iowa. However, if they do want to do so, there are exceptions for passenger cars:
- The registration fees are calculated based solely on the vehicle's weight.
- The portion of the fee typically based on the vehicle's value is not included in the computation.
- The application must include a residency certification.
Note: This certification needs to be attested to and signed by the nonresident's commanding officer to verify their non-resident status. They may also need to submit a Non-Resident Military Personnel Certification.