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How to Buy a Car From a Private Seller

How to Buy a Car From a Private Seller

You found an excellent sticker or asking price for a specific used car. However, there’s no dealership, no lot to go to, and no sales associate to talk to. This used car is being sold directly to you by the original owner, or as they’re called in the legal world -private sellers. Odds are it wasn’t the make and model of the used car that drew to a private seller rather than a dealer service; it was the low, low price that privately sold used cars go for.

Used cars will always be cheaper than a brand new car, and you won’t need to apply for mortgages in most cases. That’s why a considerable number of drivers choose to shop for a used car. But how do they buy a vehicle from a private seller? There’s no office or location to visit, no customer service number to call, or no vehicle financing options. There is also a good amount of legal responsibilities that the buyer must handle. On a traditional day at the dealership, the dealer services themselves would handle the documentation.

The main question is, would all that be worth the budgeted asking price the seller has in mind?

Why Buying a Used Car From a Private Seller?

Let’s talk about why someone would want to sell their car and the obvious differences from a new dealer-sold one.

In all respects of the word, privately sold cars are used -meaning that while you’ll get a more than the solid deal on them, they already have some mileage and history. So, it’s not exactly a clean slate. But for a lot of used car shoppers, the budget price is well worth it, and there is no need for mortgages.

Because the used car already has existing paperwork and documents, it will be up to you to have them all straightened out. This would mean replacing their name with yours on the vehicle title and the like. If the car were new, the dealer service would normally handle the documentation.

Some of the protection plans and financing that they usually offer won’t be offered by private sellers. You’ll have to be absolutely sure the seller and the used car are satisfactory because once you purchase a used car from a private seller, you won’t be able to go back on it like a dealer sale.

Not to worry, this post goes into everything in detail when buying from a private seller and how to do it as well.

What Are Advantages of Buying a Vehicle From a Private Seller?

Naturally, you’re buying from a private seller because of the cost. Some sellers may even be open to negotiating, unlike dealers. In addition to the cost on account of the car being preowned, it’s also low because of the lack of dealer fees and extra warranties, as the seller will not charge you for either.

The used car may also be in perfect working condition, but that can depend on the seller. Some may choose to have their used car inspected before they sell it. Others simply leave that up to the buyer and mark the cost down even lower. What’s more, you can expect buying a used car from a private seller will be a brief exchange of payment and the vehicle title since you may have worked the details out with them before.

Buying a used car from a dealership tends to be an event that takes up most of the day; some buyers complain. At the same time, a private seller may be more inclined to shift the deal in your favor as they are trying to make a sale. For those working on car lots, there’s always another customer to pitch the sticker price to. In a perfect world, buying a used car is cheaper and quicker.

What Are The Disadvantages of Buying a Private Vehicle from a Private Seller?

Disadvantage is too strong of a word to describe the following. They don’t lessen your chances of buying the used car; they just mean you’ll have to put more work and perhaps money into it. For some, that can be off-putting, but there are ways to get through them. These aren’t unique cases; every privately sold used car has to go through this.

Here are some things you should be mindful of when buying a used car from a private seller:

  • No warranties - As previously mentioned, private sellers don’t have dealer warranties to sell you along with their used cars. There are cases with newer used cars where the extended warranty may still be active and carry over -ask the seller.
  • No financing - Dealerships sometimes do payment plans with their customers. Sometimes their bank or credit company can get involved with loans. A private seller typically only takes a single upfront payment for their used car.
  • Sale is final - Private sales are always final when you pay the seller and sign the title. There is no opportunity to cancel or refund the sale like you would be able to do with a brand new car.
  • No lemon law protection - Defective products are known as lemons, and there are laws that protect buyers with obligated reimbursement or replacement. Privately sold cars get through the cracks of the lemon law if there are any mechanical defects because they were done on the part of the original owner. This is one of the reasons why getting an inspection is essential.
  • Repair risks - You’re responsible for any repairs that the used car needs after you buy it. You’ll want an inspection beforehand just in case an issue may be too expensive to fix. It helps to keep repair costs in mind when looking at privately owned cars.

What is The Documentation For a Privately Sold Car?

You’ll need to do more than just sign a title to assume legal ownership of the used car. Ownership needs to be established with your state’s Department of Motor Vehicles (DMV), which has its own process. As such, the following forms should have copies sent to them.

Here’s vehicle paperwork that you should be familiar with:

  • Vehicle title - The first and foremost document which lists the legal owner of the used car. The previous owner should always have it in their possession until they pass it on to another during a private sale. Watch for titles with financiers as the owners; that’s a red flag.
  • Salvage/rebuilt title - If the used car has been damaged to the point where repairs exceed the used car’s value, then it is declared totaled and given a salvage title. Even after the repairs are made, the title will still be recorded in its vehicle history report. A rebuilt title is then issued to show that it was fixed and back in working order while it has been totaled. However, it will never be the same again due to underlying issues.
  • Lemon buyback - If the used car were ever labeled a “lemon,” then it would be mentioned on the title. You would not be subject to a buyback once the private seller sells you the used car.
  • Bill of sale - The private seller will have you fill out a bill of sale with information such as used car year, make, model, identification number, price, date of sale, personal information of the buyer and the private seller, and a notation on the condition of the used car when it was sold. This would be the line that usually reads “sold as is.”
  • Emission test certification - Some states require private sellers to have emission testing documentation before making the sale. They’re usually given a specific time frame beforehand to get it.

What Are Some Scams You May Face With a Private Seller?

Part of knowing how to negotiate is knowing when you are getting ripped off or scammed. When buying from private sellers, you always have to be on the lookout for red flags or sketchy practices. Purchasing from a private seller will be much less secure than buying from a dealer, so beware of how you can be taken advantage of.

Common scams private sellers practice are:

  • Curbstoning - Curbstoners are people who sell cars regularly without a license or permit. Most states have laws against this practice. You typically want to avoid curbstoners because they likely have more cars that don’t work than they do. For them, it’s quantity over quality. Their customer service is terrible too.
  • Identity theft - Personal information is exchanged during the sale. If the seller asks for any info before the sale or even letting you see the used car, then there’s a problem, you may be facing identity theft, and you shouldn’t give them your information. To avoid any identity theft, they should only see your info once during the transaction.
  • Title scams - Ideally, you’ll want a used car with a clean title, free from any rebuilt or salvage reports. These are known as branded titles with other markups like flood damage or reported theft. If a private seller says they don’t have the title or need more time to produce it, they may be giving you a fake one that says it’s clean when it’s really not. They should always have the correct title on hand.

What Other Information About The Car Should You Get?

When you’re interested in a certain used car by a certain seller, there’s a multitude of resources you should use for the sake of bettering your understanding of the used car so you can better negotiate a price in your favor. The great thing about private sellers is that you can be on their level of expertise. In contrast, associates at a dealership have an obligation to know everything about used car makes and models.

Here are a few ways to investigate the used car in question before buying:

  • Get vehicle history report - Websites like Carfax and AutoCheck can give you a complete, up-to-date history report on the car you are interested in. You would need to pay a fee of $40 maximum and have the car’s VIN or license plate number. All major incidents should be listed on the report, while minor ones may be omitted. They say it all the time in their commercials, “see how a car’s history determines its value.”
  • Get service records - If the seller has service records, don’t hesitate to ask them for a look. It’s good to have a history of maintenance performed on the vehicle.
  • Ask seller everything - Everything pertaining to the used car, that is. It never hurts to ask the seller about things such as minor accidents that didn’t appear in the historical record to what it sounded like the day they drove it off the lot when they bought it. Or, they may not even be the original owner in that regard. You’ll never know unless you ask. We’ll get into what exactly to say later to better prepare you.
  • Test drive before buying - Ask the seller if you can briefly test drive the used car with the present. During which you can listen and feel for oddities like weird noises or faults in the lights, pedals, or engine. You may be able to get the seller to take future repairs off the asking price.
  • Used car inspection - An inspection is usually done after the sale to see what you can expect to deal with owning the used car., especially internally where you can’t see. You can get an inspection before buying from the seller but may have to pay anywhere between $100 and $200. It helps to go to a mechanic you’re a regular at or are familiar with.

What Are Specific Questions You Should Ask The Private Seller?

You should open with “are you the original owner of the car?” If they are, they can give you the entire vehicle history from the moment it was brought brand new.

If it was preowned beforehand, ask them how they bought it. Ask them if they have any liens on the used car too. A lien is a creditor’s notice that they are still owed money for used car payments. Ideally, you want to steer clear of used cars with existing payment plans tying back to the private seller. You may be on the line for those payments in the future.

Ask about its accident and repair history if you weren’t able to find it, along with mileage.

Lastly, ask why they are selling it in the first place. More or less, it’s for small talk’s sake, but there may be the tiniest of chances that their motives for selling may be to get rid of a problem used car.

How Do You Negotiate And Close The Sale for Used Cars?

At this point, you’re heading over to the private seller to do the transaction -the used car has a good vehicle history report, it’s in working order and would pass an inspection, and you’re familiar with the make and model from researching your own. Perhaps you even had a pre-purchase expectation of your own.

If a seller values their used car higher than it actually is, that’s common. They’ll often attach sentimental value or overlook specific issues. Every time you make a lower counteroffer, your reasons should include evidence-based on your Blue Book findings, knowledge of the make and model, the vehicle history report, along with heavily referencing any repairs or accidents that may depreciate the value. It’s also best not to treat it like a pawn shop with a back and forth about the actual value as it already should be known. The seller and the buyer each have their own amount in mind.

It’s best not to get carried away because this is a business transaction where you agreed to a sale of a used car, and the decision isn’t up for debate.

A common practice when buying or selling a used car is relying on a vehicle escrow service to guarantee your money safety until the paperwork is complete. An escrow service authenticates that money is exchanged in return for a vehicle and that neither party walks away empty-handed.

Once a deal is made, the private seller signs the vehicle’s title over to you. You’ll have to take the title to the DMV to have it officiated on your own. They’ll also require that you bring the bill of sale with the used car’s selling price, the odometer statement, and any lien information like payment plans to creditors still present on the vehicle.

There may be a degree of taxes and fees that you may have to pay in addition; then, you’ll receive an electronic and physical copy of the new car title. From there, you should be legally clear about driving your new car.

Is There Auto Insurance For a Used Car From a Private Seller?

Auto insurance shouldn’t be hard to get from any insurance company if the vehicle history report is clean and the used car is in good condition.

Of course, car insurance also depends on the kind of driver you are. If you have a safe driving record, then insurance companies can insure your vehicle for lower auto insurance premium rates. Inversely, the younger you are, the higher the car insurance premium rates the auto insurance company asks you to get your used car insured.

49 out of 50 states require that all drivers carry liability insurance as basic coverage when behind the wheel to cover damages to other drivers and cars. If you’d like coverage for yourself and your own car, then you would invest in full coverage with collision and comprehensive coverage.

If your used car is more than 10 years old, there are specialized car insurance policies for vehicles of that age. Just as you’ve done with the private seller, look around online and offline for the best car insurance company whose premium suits your budget with all your coverage needs.

In the market for Auto insurance? Insurance Navy can help you out.

Insurance Navy can get you cheap car insurance coverage within minutes. Request a quote online via our website and mobile app, or we’re just one phone call away at 888-949-6289. We even offer our services in person at one of our many storefronts.

Updated: November 2023

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