There are a few state-specific things you should know about buying a car in Massachusetts. Each state sets its laws and rules about buying a car. The paperwork, fees and car-buying process vary depending on where you live. 

Here, we'll cover the basics of buying a car in Massachusetts, including what you need to know about getting your car financed. 

Specific Laws and Paperwork

Here's what you'll need for paperwork when you purchase a new or used car in Massachusetts.

Title: The title of a car shows the vehicle identification number (VIN), as well as the year, make, model and trim level. You'll need your local Massachusetts DMV to transfer the title into your name so you are legally the owner of the car. 

Insurance: You'll need proof that you've met Massachusetts' minimum standards for insuring your car when you register your vehicle. Proof of insurance is printed on your registration in Massachusetts. If you get pulled over or are in an accident, the police can issue hefty fines if you can't prove that you have the right amounts and types of insurance. 

Fees: In Massachusetts, there's a $75 title transfer fee assessed to the new owner of the vehicle. You'll also pay a 6.25% tax on the sale price of your vehicle. When it's time to get the required state inspections, there's a $35 fee.¹

What if there's something wrong with your new car in Massachusetts?

The state has a "lemon law" that requires private party sellers to disclose defects in the car that make it harmful to the environment or dangerous to drive. If you purchased a defective car that's unsafe to drive from a dealership, you can ask them to fix the problem at no cost to you. 

If you discover a problem with your car as the result of an inspection, you can ask to "arbitrate" the sale and request a refund of your money. 

Buying a Car From a Dealer

In Massachusetts, it's up to the buyer to research the dealership. The state maintains a complaint database that residents can check to make sure they are shopping at a reputable dealership. 

When you buy a car from the dealership, they may handle the necessary paperwork for you. Be sure to bring your proof of insurance with you. Taxes and fees may roll into the price of your car. Make sure you understand your all-in price before you go to pick up your new car. 

Buying a Car From the Owner

If you buy a car from a private seller, you'll need a signed bill of sale to take with you to get the title transferred. You can download a blank bill of sale that works in Massachusetts at no charge online. Make sure that the seller signs the paperwork so you don't have to meet with them again to handle the necessary paperwork. 

The Massachusetts bill of sale states the name and address of the buyer and the seller. It shows the vehicle’s year, make and model, as well as the VIN number. You'll fill in the current mileage, and the seller must sign to certify that the mileage is correct. You'll also state the sale price of the car. The Massachusetts DMV will assess taxes based on this amount. 

On the back of the title, there's an area where the seller signs to transfer ownership of the vehicle. 

Getting Your Car Inspected in Massachusetts

The Massachusetts Vehicle Check program provides car buyers with a safety inspection within seven days of purchase. The vehicle must also pass Massachusetts' emissions standards. If your car doesn't pass, you can ask for help getting your money back or go back to the dealership with the report in hand to request that they fix the problem.²

Financing Your Car

You may have heard that cash buyers have more negotiation power at the dealership, but that's only partially true. Walking in with an envelope full of cash doesn't necessarily mean you'll get a better deal. In fact, dealerships make extra money when they finance your purchase in-house or work with one of their lender partners to get you approved for a car loan. 

Getting a good deal on financing is crucial. It's helpful to know how much interest you'll pay, how long you'll make payments, and the amount of your monthly payment before you start car shopping. When you have financing in place before you buy a car, you don't have to worry about having a car payment that doesn't fit into your budget or paying more interest than necessary. 

When you have financing in place, the dealership may try to get you a better deal with one of their lenders. Shopping around is smart, and it's also important to understand how looking for the best deal may impact your credit. 

You may be able to prequalify for a loan with only a soft pull of your credit, which doesn't lower your credit scores. When you accept a financing offer, the lender conducts a hard pull of your credit, which could lower your credit scores by a few points. When a dealership looks for financing on your behalf, they may conduct multiple hard pulls of your credit report. 

Multiple credit inquiries won't hurt your credit if they happen within a 14-day period. The credit bureaus group inquiries together to minimize the negative impact on your credit score while you are shopping for a car loan. 

What to Do Before Buying a Car

Walking into a car dealership isn't most peoples' idea of a good time. Purchasing a car involves spending a large amount of money, and many car shoppers must finance the cost of the car. 

One way to take some of the pressure off as you look for the perfect car is to get preapproved for financing before you go into a dealership. 

Getting preapproved for financing prevents you from paying more interest than you must. Car dealerships typically can't beat a credit union's low interest rate, unless the car's manufacturer has a low-interest loan available. Even then, qualifying for the advertised financing deal could be difficult. 

Getting preapproved for a car loan can help you identify potential problems with your credit. If you haven't already, check your credit reports at annualcreditreport.com. You can get a free copy of each of your three credit reports and look through them for mistakes or evidence of identity fraud before you apply for a loan. 

Check Car Loan Interest Rates

Your bank or credit union may publish current car loan rates on their website. These numbers will give you an idea of how much you may pay to access financing. 

Use an online loan calculator to estimate how much money you may be able to spend without exceeding your monthly budget. While car dealers may prefer to negotiate the price of a car using the monthly payment amount to avoid discussing details, you may want to work out your ideal monthly payment on your own. 

Ready to get a car loan in Boston?

At BFCU, you'll get the same low-interest rates on both used and new cars. Borrow as much as 100% of a new car's purchase price and up to 100% of the value of a used car. You may even be able to roll sales tax and other fees into your loan to reduce the amount of money you pay out-of-pocket. 

There are no prepayment penalties with a BFCU auto loan. If you decide to pay off your loan early, you'll avoid future interest charges. 

Fill out an online loan application or speak with one of our loan officers today.

¹ Caranddriver.com, 2021, Massachusetts Auto Sales Tax: Everything You Need to Know, Accessed October 12, 2021, [Caranddriver.com]
² Mass.gov, 2021, Vehicle inspections, Accessed October 12, 2021, [Mass.gov]