If you want to get the best deal on a solid used vehicle, buying from a private seller is a great option. A private sale means that you buy the car from an individual, rather than a used car lot. A private seller doesn't have to pay for a showroom, lot, salesperson and a host of other add-ons that enhance the look of a used car.
Cutting out the middleman can be quite advantageous to car buyers, as long as you do your homework beforehand so you can make an informed private party purchase. Let's run down the ins and outs of private owner car sales so you'll know 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. Perhaps you just found the vehicle of your dreams on Craigslist, and no other vehicle will do. Maybe you're hoping for an excellent deal or trying to avoid paying hidden fees. Some shoppers prefer to avoid the process of trudging up and down used car lots.
Benefits of private party sales include:
Lower prices. The main reason to buy used motor vehicles from private sellers is that often private sellers are often more willing to negotiate the asking price in your favor. Some private sellers are funding their next vehicle purchase, and others may need some money to pay the bills. It's quite common for private sellers to be more flexible with the price of the vehicle, especially if they need cash fast.
Less pressure. When you walk onto that 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 cheaply) without playing the waiting game.
Potential trades. When you're buying from car dealerships, you're paying up front, or you're paying in monthly installments. When you're buying a used car from a private citizen, you may be able to work out some 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.
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 financing. Some people prefer to buy from car dealerships because they want to make monthly payments rather than paying a lump sum up front. However, you may find that getting a car loan from your bank is surprisingly easy. Even if you don't qualify for traditional loans, many banks will provide car loans because they're protected by an asset (the vehicle).
No warranty. Car dealerships may offer a warranty that protects your 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.
No customer service. Again, once the private sale is over, it's over. When you buy from car dealerships, you can take action if you've been sold a lemon. You can leave negative reviews and comments on social media. Many dealerships will take steps to rectify a problem to preserve their company's reputation.
Determining a Good Deal
If you've decided buying from a private seller sounds like the right approach, it's crucial that you know how to spot a good deal. Of course, every vehicle and every seller is unique, 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 dependable car at a great price.
The first step is to compare the seller's asking price to the actual Blue Book value. The Kelley Blue Book will let you know how much you should expect to pay. 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.
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 crucial questions to ask:
- Has the vehicle ever been in an accident?
- Has the vehicle been worked on? Where?
- Have any of the components been replaced?
- Why are you selling the vehicle?
- How often did you use the car?
- Where was the car used? What type of terrain?
- Have you noticed any problems or quirks with the car?
- Have the airbags ever deployed? Why?
- 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 followup questions. If the seller seems to be avoiding questions, or if you feel like you're getting a sneaky feeling from them, it may be best to move along. Sometimes you need to go with your gut instinct. 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 car unless you genuinely believe it's the right decision.
Check the Paperwork
If the answers sound above board 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. Check the title and ask for any existing warranty information. Be extremely cautious if the car has a lemon, rebuilt, or salvage title.
If the vehicle's history looks as good as you think the rest of it does, make sure that everything lines up according to the state's laws. Does the vehicle have a current, valid license plate? Or, are you going to have to bring the title, bill of sale, and auto insurance information to the DMV to register the vehicle and pay sales taxes? Has the car past state emissions requirements (if applicable)?
Make sure that the seller's name matches the registration and the pink slip. If the names don't match, the seller probably shouldn't be selling the vehicle. There are some circumstances when it might make sense, such as if they're selling the car for a friend who doesn't know much about cars, but that information should always be disclosed beforehand. When buying privately, it's imperative that you understand exactly what you're buying, as you don't want 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 eagle-eye focused on every tiny detail (while also paying attention to the road, of course). Pay extra-close attention to how the steering, brakes, suspension, and transmission feel. Is the ride smooth? Does the car feel solid? How's the acceleration? Are there any strange noises? Are the seats comfortable? Does the air conditioner work? How about the heat? How about the windshield wipers? 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. Bring the vehicle to a trusted mechanic. If you don't know any mechanics, ask for a recommendation from a friend or family member. 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 you're confident that —barring an unforeseen problem — you're going to buy the vehicle if everything checks out.
While the seller may not agree, it's worth asking for them to agree to pay for the inspection fee if the mechanic finds any problems that were not disclosed. It can be an awkward conversation, as the seller may genuinely not know about an existing issue. However, if the seller wants to make the sale and they're confident in the condition of the car, 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 is 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 purchase
- The price of the vehicle
- The buyer's and seller's names and addresses
- Any agreed-upon guarantees or conditions
In most cases, this will merely be an as-is sale, meaning the seller doesn't offer any guarantee or special conditions. In other words, once the transaction is done, the sale is 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 your new vehicle. Be sure to check your policy first.
Next, you need to go to the Department of Motor Vehicles 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
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