Texas Car Buying Laws

by Jeremy CatoUpdated July 05, 2023
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The process of buying a car in Texas is not much different than that of many states, however there are several key areas of vital importance to anyone in Texas in need of a new vehicle. Be aware of the Texas car buying laws that could affect your search for, and purchase of, a car.

Before the Sale

Texas law prohibits car dealers from selling vehicles on Saturday and Sunday. If you are looking for a vehicle, you will have to set aside a weekday for the actual purchase. Those who are not actual car dealers, but are merely selling a vehicle privately or in a manner unrelated to a car dealership are not held to this restriction.

During the Sale

The seller must inform the buyer whether the car is being sold with an attached warranty or "as is." Cars that are sold "as is" indicate the seller is not responsible for any damages or defects that arise with the vehicle. Warranty information should also be provided in the contract. If the vehicle is being financed, know that a maximum interest rate of 10 percent is all that can be assessed with vehicle payments.

After the Sale

The seller is required by law to transfer the title of the vehicle to the new owner within 20 business days of the sale (or 45 calendar days if the vehicle is being financed) and must give the new owner a copy of the receipt from the tax assessor's office. If you are buying from an individual, make sure she accompanies you to the county tax office when transferring the title (this is the best way to avoid complications later), Buyers must also provide proof of insurance when registering a vehicle and must pay a 6.25 percent motor vehicle sales tax on the purchase price or presumptive value of the vehicle.

Illegal Activities

Sellers cannot roll back the odometer of a vehicle to mislead buyers about the actual mileage. This is a crime punishable by stiff fines. Dealers must provide the actual number of miles with the title of the car upon transfer. The sale of master keys that are designed to fit the ignition switch of more than one vehicle is prohibited by Texas law and, as of August, 2010, punishable by a fine of between $25 and $200.

Texas Lemon Law

Texas lemon law allows people who have recently (within months) purchased a vehicle that later proves to be defective or inoperable to receive repairs or compensation. New and used vehicles of all types (cars, trucks, ATVs, motorcycles) may be covered. The owner must fill out a Lemon Law Complaint Form and pay a $35 filing fee for new vehicles. A case adviser will either attempt to mediate or seek an administrative law ruling, either method may take several months to resolve.

Lemon Definition

A lemon is a vehicle that is defective or does not meet the standards of quality expected by the consumer.

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