Purchasing a used car from a private seller rather than a dealership can potentially save you thousands of dollars.
However, buying privately also comes with increased risk if you don’t do your research. Use this comprehensive guide on how to buy a car from a private seller to help you find a great deal and avoid issues when buying a used car from a private party.
- Before You Start Shopping
- Finding Private Seller Cars For Sale
- Beware of Scams
- Inspecting the Car Thoroughly
- The Importance of a Vehicle History Report
- Mastering the Art of Negotiation
- When I buy a car from a private seller, can I drive it home?
- Paperwork Needed To Buy a Car From a Private Seller
- Buying Privately with Confidence
- Comparison of Buying From Private Seller vs Dealership
Before You Start Shopping
To set yourself up for success, be an informed buyer by researching these key areas first:
- The vehicle you want– Compile a list of desired features and trim options. Get specific on the make, model, year, mileage, etc. This helps narrow your search.
- Budget – Determine the maximum you can afford to spend by getting pre-approved financing if needed. Having a firm budget makes negotiations easier.
- Value – Use pricing guides to find the car’s estimated value based on age, mileage and options. This helps determine fair asking price.
- History – Order a vehicle history report to check for accidents, repairs, title issues. Avoid cars with red flags.
- Reviews – Read consumer and expert reviews about the car’s reputation, common issues, recalls, and ownership costs.
- Future value – Research resale value. How well does this particular make/model hold value over the coming years?
Helpful Comparison Tip: Compile your research into a table with columns for the make/model, mileage, asking price, estimated value, online reviews and notes to compare options.
Finding Private Seller Cars For Sale
Once you’ve identified some potential options, here are tips for finding private sellers:
- Search classifieds sites like Craigslist, Facebook Marketplace, Cars.com and sort by private sellers. Set email alerts for new matches.
- Check public bulletin boards at community centers, schools, libraries for local ads.
- Contact local used car dealerships – some will connect you with previous customers looking to sell.
- Drive around checking parked cars for “For Sale” signs and call the numbers. Also search neighborhood groups like Nextdoor.
When reaching out, ask detailed questions and request VIN to run history reports. If the seller seems evasive or pushy, view that as a red flag.
Beware of Scams
When buying from a private seller, be aware of potential scams. Here are some common ones to watch out for:
- Title Washing: This is when a seller alters or forges a title to hide a car’s history.
- Odometer Fraud: This involves altering the car’s odometer to make it appear as if it has fewer miles than it actually does.
- Escrow Scams: In this scam, the seller asks you to wire money into an escrow account for safekeeping until the deal is finalized. However, the escrow account is fake, and the seller disappears once they have your money.
Inspecting the Car Thoroughly
The test drive and inspection gives you the chance to uncover any issues. Take your time and be thorough.
Key Areas to Inspect:
- Engine – Listen for odd noises, pay attention to exhaust. Have a cold start-up to check for smoke or hesitation.
- Electronics – Test all interior accessories like lights, signals, radio, windows.
- Fluids – Look under car and on ground for any leaks (oil, coolant, transmission).
- Interior – Check all adjustments and wear and tear on seats, carpets. Verify all gauges and accessories function properly.
- Exterior – Look for body damage, rust, paint issues, uneven tire wear.
- Test drive – Acceleration should be smooth and strong. Listen for any odd noises or grinding. Check handling, brakes, steering.
For extra assurance, a prepurchase inspection by a trusted mechanic costs around $100 but can uncover major mechanical or electrical issues the average buyer could miss.
Signs of Wear:
Be wary if you notice any of the following which could mean repairs needed:
- High mileage over 100k
- Rust around wheel wells or undercarriage
- Major dents, scratches, mismatched paint
- Stains on interior, worn or torn upholstery
- Uneven tire wear or inadequate tread
The Importance of a Vehicle History Report
A vehicle history report is a crucial part of buying a car from a private seller. This report provides detailed information about the car’s past, including any accidents, repairs, and title issues. Always ask the seller for this report before making a purchase. If they refuse or don’t have one, consider it a red flag and get your own if you are still very interested in the car.
Mastering the Art of Negotiation
When buying a car from a private seller, negotiation is key. Here are some tips to help you get the best deal:
- Do Your Homework: Research the car’s market value before you start negotiating. Use online tools to get an estimate of the car’s worth based on its make, model, year, and condition.
- Stay Calm and Composed: Keep your emotions in check during the negotiation process. If the seller senses that you’re too eager, they might be less willing to lower their price.
- Be Ready to Walk Away: If the price is too high or the seller isn’t willing to negotiate, don’t be afraid to walk away. There are plenty of other cars out there.
When I buy a car from a private seller, can I drive it home?
Yes, you can drive a car home that you purchased from a private seller; however, you could still be in violation of your state’s registration laws, so you should check with your DMV on getting a temporary tag.
Paperwork Needed To Buy a Car From a Private Seller
Don’t forget these key steps when you’re ready to complete the purchase:
- Verify the title is in the seller’s name and that there are no salvage declarations. Make sure registration is current.
- Complete a bill of sale detailing the VIN, sale price, date, names. Have both parties sign.
- Transfer insurance to the new vehicle before driving away.
- Submit the properly signed title transfer documents and fees to the DMV within the specified time frame of your state.
- Optional: Purchase an extended warranty from a third party for added peace of mind.
- Closely review financing terms if not paying cash. Don’t take possession until loan is secured.
Helpful Tip: Use an escrow service to safely hold your money until the sale is complete. Available through banks, apps, or online.
Buying Privately with Confidence
While buying from a private seller has risks, you can mitigate them and find an amazing deal. Use this guide to research thoroughly, inspect carefully, determine fair pricing, and buy with confidence!
Comparison of Buying From Private Seller vs Dealership
There are some advantages and disadvantages to buying from a private seller vs a dealership, so here is a helpful table that lays some of those out for you:
|Cost||Lower price, more negotiation room||Higher price, less negotiation on used cars|
|Financing||May need to secure your own financing||Can finance directly through dealer|
|Condition uncertainty||Cannot guarantee full history and repairs||Refurbished and certified pre-owned options|
|Test drives||The dealership does thorough inspection and repairs||Can take extended test drives|
|Inspection||Only what you can do yourself or paid mechanic||Certified used have warranty, can add an extended warranty|
|Warranty||Typically “as-is” no warranty||You handle the DMV process yourself|
|Title transfer||You handle DMV process yourself||Dealership handles title transfer|
|Return period||No returns once sold||New “lemon laws” give return period if issues found|
What paperwork should I request from a private seller?
Proof of title, service records, accident details, list of repairs, and inspection documents.
How can I ensure the car isn’t stolen before buying from a private seller?
Check that the car’s VIN matches the title and registration VIN. Also, get a vehicle history report to check for title issues.
How do I transfer the registration after buying from a private party?
The steps vary by state but generally include submitting the signed title, bill of sale, VIN verification, and transfer fees to the DMV within a certain number of days.
What should I look for when test-driving a used car from a private seller?
Listen for odd noises when accelerating, braking, and turning. Also check steering, visibility, electronics, and that it drives straight.