Nearest Office:

How to Buy a Car From a Private Seller

You found an excellent sticker or asking price for a specific car. However, there’s no dealership, no lot to go to, and no sales associate to talk to. This 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 car that drew to a private seller rather than a dealer service; it was the low, low price that privately sold cars go for.

Used cars will always be cheaper than a brand new car. That’s why a considerable number of drivers choose to shop for them. But how do they do it? 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?

What is Significant About a 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. Because the 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 car are satisfactory because once you purchase a car from someone, 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 car may also be in perfect working condition, but that can depend on the seller. Some may choose to have their 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 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 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 preowned car is cheaper and quicker.

What Are The Disadvantages of Buying From a Private Seller?

Disadvantage is too strong of a word to describe the following. They don’t lessen your chances of buying the 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 car has to go through this.

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

  • No warranties - As previously mentioned, private sellers don’t have dealer warranties to sell you along with their car. There are cases with newer used cars where the 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 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 this 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 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 preowned 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 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 car has been damaged to the point where repairs exceed the 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 history. 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 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 car.
  • Bill of sale - The private seller will have you fill out a bill of sale with information such as car year, make, model, identification number, price, date of sale, personal information of the buyer and seller, and a notation on the condition of the 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 car, then there’s a problem, and you shouldn’t do it. They should only see your info once during the transaction.
  • Title scams - Ideally, you’ll want a 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 car by a certain seller, there’s a multitude of resources you should use for the sake of bettering your understanding of the 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 car makes and models.

Here are a few ways to investigate the 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 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 car with them 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.
  • Car inspection - An inspection is usually done after the sale to see what you can expect to deal with owning the 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 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 car too. A lien is a creditor’s notice that they are still owed money for car payments. Ideally, you want to steer clear of 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 sake, but there may be the tiniest of chances that their motives for selling may be to get rid of a problem car.

How Do You Negotiate And Close The Sale?

At this point, you’re heading over to the private seller to do the transaction -the car has a good 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 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 car, and the decision isn’t up for debate. 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 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 Car Insurance For a Car From a Private Seller?

Auto insurance shouldn’t be hard to get if the vehicle history is clean and the 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 you can expect your rates to be lower. Inversely, the younger you are, the higher your rates are. 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 preowned car is more than 10 years old, there are specialized policies for vehicles of that age. Just as you’ve done with the private seller, look around online and offline for the best provider which suits your budgets with all your coverage needs.

In the market for car insurance? You’ve come to the right place. Insurance Navy can get you affordable 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.

Receive a car insurance quote in 2 minutes or less!