How to Buy a Car from a Private Seller
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How to Buy a Car from a Private Seller

By Autolist Editorial | April 28, 2021

Buying a car from a private seller is an excellent option for getting a good deal on a quality used car. A private sale involves purchasing the vehicle from an individual rather than a used car lot. Cutting out the middleman can be pretty advantageous to car buyers, as long as you do your homework beforehand so you can make an informed private party purchase.

Here's what to expect before you start shopping for your new-to-you car.

Private Car Sale Advantages

There are several reasons you may be thinking about buying a car from a private seller, whether it was listed on Craigslist or Facebook Marketplace, or a dealer is marking the price up too much. Some shoppers prefer to avoid the process of trudging up and down used car lots.

Benefits of private party sales of used vehicles include:

  • Lower prices. The main reason to buy used motor vehicles from private sellers is that they are often more willing to negotiate the asking price in your favor. Some private sellers fund their next vehicle purchase by selling their current car, and others may need some money to pay the bills. It's common for private sellers to be more flexible with the price of the vehicle, especially if they need cash quickly.

  • Less pressure. When you walk onto a used car lot, you know the salespeople have done this before. They're well-trained and experienced in the art of the deal, and their primary focus is making as much money as possible. Buying from a private seller naturally evens the playing field. Sure, you're probably still going to end up negotiating, but it's going to be with someone who doesn't sell cars full-time for a living.

  • Faster sale. Private sellers tend to be motivated. While professional salespeople at car dealerships can usually wait days (or even weeks or months) for you to meet their price, private sellers typically want to complete the title transfer quickly so they can move on. That means you get a new car quickly and easily (and often at a great price) without playing the waiting game.

Potential trades. When you're buying from car dealerships, you're paying upfront or you're paying in monthly installments. When you're buying a used car from an individual, you may be able to work out some unconventional arrangement. Maybe you have a boat to trade or a unique skill to offer. While most sellers are going to prefer cash, you never know what kind of deal could happen.

Reduced insurance requirements. If you buy a car at a dealership and choose to finance, you typically need to contact your insurance company and purchase a comprehensive and collision insurance policy. That's not necessarily the case with a private sale, although the DMV requires proof of insurance in most states before registering the car.

Private Car Sale Disadvantages

Now that you can see the pros of private car buying, it's time to take a look at the downside. That way, you can determine for yourself if the good outweighs the bad.

Drawbacks of private party sales include:

  • No refunds. Unless you've established some agreement beforehand, once you complete that bill of sale with a private seller, that's it — it's your car now. Even if you run into issues shortly after buying the vehicle, you typically don't have any recourse options available. In most states, lemon laws don't apply to private sellers. Although buying from a private seller can be a gamble, you can reduce the risk by having the vehicle inspected before you sign anything.

  • No trade-ins. While some private sellers may also be amicable to trades, most are not and will not accept a trade-in to reduce the purchase price.

  • No financing. Some people prefer to buy from car dealerships because they want to make monthly payments rather than paying a lump sum upfront. However, you may find that getting a car loan from your bank, credit union, or another lender is surprisingly easy. Even if you don't qualify for traditional auto loans due to a low credit score, many banks will provide car loans because they're protected by an asset (the vehicle, in this case).

  • No warranty. Car dealers may offer a warranty that protects the purchase. While you won't get a warranty from a private seller, if the car isn't too old, there may be an existing warranty still in place, so be sure to ask the seller while you're checking the service records.

Determining a Good Deal

If you've decided buying from a private seller sounds like the right approach, you must know how to spot a good deal. Of course, every vehicle and every seller is different, so there's no one-size-fits-all formula to ensure success. However, if you do your due diligence, you can drastically improve your chances of landing a solid car at a great price.

Compare Prices

The first step is to compare the seller's asking price to the actual Blue Book value. KBB.com uses the Kelley Blue Book data to determine how much you should expect to pay or the vehicle's market value. If the seller is asking too much, you may be able to talk them down. But be wary that they may be intentionally inflating the price so that it seems like you're getting a great deal when they come down.

Ask Questions

So the seller is offering a fair price, or maybe you think you can haggle them down. Now, you should talk to the seller about the details. You can call or email them if you don't want to meet up just yet.

Here are some of the essential questions to ask:

  • Has the vehicle ever been in an accident?
  • Where was the vehicle repaired or maintained?
  • Which of the components been replaced?
  • Why are you selling the vehicle?
  • How often was the car used?
  • Where was the car used? What type of terrain?
  • Have you noticed any problems or quirks with the car?
  • Have the airbags ever deployed?
  • Who was the previous owner (if applicable)?
  • Do you know anything about the vehicle's history before you owned it?

Now, as you ask these questions, remember that you're asking them for a reason. Pay close attention to the answers. Ask follow-up questions. If the seller seems to be avoiding questions, or if you feel like you're getting a dishonest feeling from them, it may be best to move along.

Sometimes a gut instinct is the best thing. While you don't want to waste someone's time, you also don't want to waste your money. A car is a significant purchase, so don't ever feel obligated to buy a vehicle unless you genuinely believe it's the right decision.

Check the Paperwork and the Car's History

If the answers sound good to you and you decide to meet up with the seller, make sure they have all of the necessary documents ready to show before you even bother taking it for a test drive. Check the service records. Ask for the vehicle identification number (VIN), so you can check the vehicle history report on Carfax or AutoCheck. Check the vehicle title and ask for any existing warranty information. Be extremely cautious if the car has a lemon, rebuilt, or a salvage title. These history reports should also reveal any inaccuracies in odometer readings, too.

If the car seems to be in good shape as far as its history goes, make sure that everything lines up according to the state's laws. Does the vehicle have valid registration in the state it's being sold? Or, are you going to have to bring the title, bill of sale, and auto insurance information to the Department of Motor Vehicles (DMV) or a similar agency to register the vehicle or get new license plates, do a title transfer and pay sales taxes? Has the car passed any applicable state emissions requirements or other purchase inspections?

Ensure that the seller's name matches the necessary paperwork, including the registration and the pink slip. If the names don't match, that's a red flag that the whole deal may be a scam. Some circumstances might make sense, such as selling the car for a friend or relative, but the seller should disclose that information. When buying privately, you must understand precisely what you're buying to avoid any unwanted surprises after the fact.

Test the Vehicle

If everything looks good on paper, it's time to take the vehicle out for a test drive. During the drive, make sure you're focused on details that seem off or are known to be problem areas on that particular kind of car. Pay extra-close attention to how the steering, brakes, suspension, and transmission feel. Spend time getting to know the vehicle.

Get the Car Inspected

If the vehicle feels good on the road and you're considering purchasing it, now you want to make sure that the car is mechanically sound. Take the vehicle to a trusted mechanic. If you don't know any mechanics, ask for a recommendation from a friend or family member, or look for other specialists on Yelp or another internet service. Even if the seller says they can have their mechanic handle it, insist on using your mechanic. That way, you can be confident that you're receiving unbiased information.

It's worth noting that unless the seller agrees to pay for it, you're going to have to pay for the inspection. While paying out of pocket isn't ideal, the money spent is worth the peace of mind you'll get before purchasing the car. Just make sure that, barring an unforeseen problem, you're going to buy the vehicle if everything checks out. These include issues with the engine, cooling, suspension, brakes, steering, air conditioning, and other vital or expensive pieces. They should also be able to give pricing of what these repairs might cost down the line.

While the seller may not agree, it's worth asking them to agree to pay for the inspection fee if the mechanic finds any problems they did not disclose. That can be a trickier conversation, as the seller may genuinely not know about a current issue. However, if the seller wants to make the sale and they're confident in the car's condition, they may be willing to work with you.

Purchase the Vehicle

If everything looks good and you're ready to pull the trigger, it's time to draw up a bill of sale with the seller. It's the document that solidifies your new ownership of the vehicle.

Here's what your bill of sale must include:

  • The make, model, and year of the vehicle
  • The vehicle identification number (VIN)
  • The date of the sale
  • The price of the vehicle
  • The buyer's and seller's names and addresses
  • Any agreed-upon guarantees or conditions

In most cases, the last point will be an as-is sale, meaning the seller doesn't offer any guarantee or special conditions. In other words, once the deal is done, it's done.

Get the Car Ready for the Road

Congratulations, you're now the owner of a new-to-you vehicle. Now you need to make sure your new car is street legal. To protect yourself from any unfortunate incidents, you should set up your car insurance before you even drive it away from the sale. If you already own another vehicle that's insured, you might have a grace period that gives you time (typically around 30 days) to register the new car. Be sure to check your policy first.

Next, you need to register the vehicle under your name. You'll need to bring the title and proof of car insurance. In some jurisdictions, you may also be required to show the safety inspection and emissions test documents.

Shop Smart and Easy

The biggest challenge associated with buying a used car from a private seller is finding the best car at the best price. Checking listings for used cars can be tedious, so it's best to cast a wide net. Use resources such as Craigslist and Facebook Marketplace, as well as online sites such as Autolist. Set up notifications to help manage the search, but spend time with each listing to make sure it's accurate and legitimate. And then once you find a car worth looking at, safely see it in person and inspect it closely. Following the steps laid out in this guide could save lots of money and headaches in the long run.