How To Buy a Car From a Private Seller

Shopping for a used car these days can be a good experience. As the buyer, you hold all the cards. If you have had an unpleasant experience buying from a dealer, it may be time to consider purchasing a used car from a private seller.

Pros and Cons Of Buying a Car From a Private Seller

Upsides of Buying From a Private Owner

Buying a car from a private owner can save you money. In addition, you will have the chance to speak directly to the person who knows the most about the car. Unlike with a used car dealer, there is no “plausible deniability.” If you ask a reasonable question, such as, “Has the car ever been in an accident,” you should expect an exact and complete answer, as opposed to the car dealer’s usual response, “Not as far as I know.”

There are many types of used cars. At one end of the market are tired old beaters with many prior owners. At the other end, one-owner cars that are in perfect condition and still under the manufacturer’s bumper-to-bumper warranty. You are most likely buying something in between these two extremes. The biggest upside of buying used from the car's driver should be first hand information and knowledge of the vehicle.

According to Geoff Cudd at Find the Best Car Price, four in ten used car shoppers opt not to buy from a used car dealer and instead buy from a private owner. Geoff says, “Shoppers who opt to buy from a private owner cite the stress of negotiating with a dealer and the onerous dealer paperwork as reasons they prefer buying from a private party.”

Downsides of Buying From a Private Owner

We don’t want to string you along and give the impression that buying from a private owner is without downsides and challenges. In many states, used car dealers are required to provide a warranty on the cars they sell. There are a lot of parameters associated with those warranties, but in Car Talk’s home state, used car dealers must provide a warranty for as long as 90 days, depending on the car’s mileage. Private-party sales usually have no state-mandated warranty.

Buying from a dealer means the title is “clean” (always check). So you don’t have to deal with the seller possibly not having a title due to an outstanding loan or lien. Dealers are also better at helping with used car sales in which a buyer loan is involved.

Finally, in normal times, you may be able to see and test drive many used vehicles in stock at a dealership. If you are buying from a private party, there is only one car for consideration, so finding the right vehicle to purchase may require more of your time.

One unfortunate reality of buying a car from a private owner if you are also selling your older car is that state laws may cost you some money. Geoff from Find the Best Car Price says, “Buyers can often save money on sales tax by trading in at the same time they make a purchase. In most states, the value of your trade-in can be used to reduce the purchase price used for sales tax calculations.”

How To Find a Good Used Car

Good used cars are like a good melon. You have to touch and feel it to know. However, you can start your quest online. Whether you prefer Craigslist, a local version of want ads on Facebook or other social media platforms, or are buying from a friend or relative, you need to see the car and do your homework to determine if it is a good car or a bad car.

A “good” used car meets your needs, is reliable, and is fairly priced. You want one that has not been in a wreck, runs well, was never flooded, and has a clean transferable title. A title is a legal document regulated by your state’s registry of motor vehicles (RMV or DMV). Avoid any used car that isn’t being offered with a transferable title that meets all of your state’s requirements. It’s not worth the hassles to deal with a title issue as a buyer. Ever.

What To Ask a Seller About a Used Car

Once you find a used car for sale that is in your price range and near enough that you can actually go and get it, contact the seller by phone. Ask about the car. Here is a list of questions we would require the answers to, even if they are spelled out in the advertisement. The answers you want to hear should be self-explanatory.

• Does the seller have the title to the vehicle?
• Has the vehicle been smoked in?
• Is the car in good running condition?
• Is there any overdue maintenance?
• Are there any ongoing mechanical issues?
• Has the vehicle ever been in a flood?
• Has the car had a state safety/emissions inspection and passed?
• Does the manufacturer’s warranty still cover the car?
• Does the car have a transferable extended warranty?
• Has the car even been in an accident?
• How many sets of working keys or fobs does the car come with?
• Do you have in your possession all of the maintenance and repair receipts since new?
• How does the seller want to handle payment?
• Where can you meet to see and test drive the car?
• Can you have your own mechanic inspect the car?

How to Determine the Fair Market Value of a Used Car

One of the most challenging parts of car shopping is determining what a fair price will be. The good news is that used cars purchased from a private party tend to cost less than that same car would if you bought it from a car dealer.

There are a number of quick and easy used car valuation tools available online. Edmunds and KBB are the two most well-known. You can cross-check the info you get there by scanning listings for the same make and model with the same age and miles.

Avoiding an Unreliable Year, Make, and Model When Shopping Used

Any used car can have problems. However, many problems are well-known and easy to uncover. Car Complaints and Consumer Reports both publish detailed reports to help you know if a particular year, make and model has defects affecting a lot of owners. Before you settle on a particular type of car, check out the easy-to-uncover reliability facts about that particular model.

Maintenance Records and Why They Matter

Aside from helping to prove that a car has been well-maintained, maintenance records are important for another reason. You may want to purchase an extended warranty. All extended warranty companies require that you have records if anything goes sideways after you buy your coverage. Without them, you cannot be sure the warranty company you are paying will fix the car. If you are shopping for a good used car, buy one that has the maintenance history in paper form you can hold in your hand and review.

Open Uncompleted Recalls - How To Instantly Check

Recalls don’t cost you money, but they can cost you time. Before you buy a car, use the vehicle identification number (VIN) to see if that exact car has any unresolved recalls. Your phone’s browser can take you to the manufacturer’s recall lookup page. Bear in mind that some recalls have no known fix. We would avoid buying any vehicle for which there is an open recall that has no fix yet identified by the automaker.

CarFax - What It Does and What It Does Not

CarFax is an online service that helps to identify if a car has been in a crash. The service can also help you with maintenance and other research. This is just one tool. If you order a CarFax report and it looks good, that is a good sign. It does not absolve you of your duty to do more research. The company only knows about events that a participating shop has reported.

Make the Sale Contingent on Passing State Inspections

When you shop for a used car from a private seller, be wary of code words like “needs work, bring a trailer, and as-is.” In states which require an inspection to register a car, you need to pass the inspection in order to use the vehicle. Make clear to your seller that the sale is contingent on the vehicle passing inspection after you buy. Consult your local DMV for details on what is required to register a used car. While the law may be on your side, there is no reason to accidentally stumble into a transaction in which the seller thinks they can sell you a car that is unregistrable on the day you buy it.

If Possible, Have Your Mechanic Inspect the Car

Every person you ask about buying a used car will tell you, “Always have your mechanic inspect the car.” Of course, you may not have a mechanic. And your seller may say, “Next!” when you ask if you can take it from them and have it inspected while they hold the car off the market, twiddle their thumbs, and wait to hear the results. In a market where used cars are in extremely short supply, this may not always be possible.

Here Is What Tom and Ray Said About Having Used Cars Inspected

If you can get the car inspected, do it! We recently took a used car under consideration to a trusted local shop in Tewksbury, MA, called “Jim Boudreau’s Automotive.” For just $60, the shop put the car on the lift for a thorough inspection, checked for alert codes via the OBD-II port, and did a detailed overview for us of the cost to put the car in proper order. Jim himself explained the report. It identified over $1,000 in needed repairs for a car valued at under $2,000. Many items on the list would be invisible to a shopper.

How To Inspect a Used Car Yourself

If you are not a mechanic, there are still a lot of things you can do yourself to see if a used car is in good shape. Our suggestions here are not a substitute for having a car-savvy person along for the look-see, or even better, having it properly inspected by a mechanic. These are things we would always look for in any walk-around:

• Has the car been smoked in? If so, you need to decide if walking away now is best. Do not assume a detailer can remove the smoke smell from the interior.
• When started, do all the warning lights go out as they normally should?
• Are all the tires matching, evenly worn, and not down to the wear bars?
• Is the windshield pitted, cracked or otherwise damaged?
• When you pull the oil dipstick, is the oil in the proper range?
• Is the brake fluid and coolant in the normal range? Warning, never uncap a radiator on a hot car.
• Carefully look inside the engine bay. Any signs of rodent nests?
• Open the cargo area, and get as low as you can under the cargo floor mats, etc. Any water? Any serious corrosion visible?
• Pull the front floor mats up and put your hand under them. Any moisture?
• How does the audio system work? Try pairing your phone.
• Open every door, hatch, and hood. Any sign of recent paintwork or overspray?
• If there is a spare tire, is it in the car? If this model does not come with a spare, why are you buying a car without a spare?
• Try every control and every seat control.
• Test AC and heating components.

This is a five-minute walk around intended to reveal obvious problems with the car parked. Take the car for a test drive as well.

How To Test Drive a Used Car

For a full overview on how to test drive a car, check out Car Talk’s feature story on the subject. You have multiple objectives on a test drive. You want to uncover issues, sure. However, you also want to check if the car fits your body and drives the way you want it to. Things we would evaluate before the car moves include:

• How do you like the visibility out of the vehicle?
• Adjust the seats to the way you like them. Are you comfortable? Many Car Talk Community members discuss uncomfortable seats. Be sure you like them.
• If you are tall, does the car’s center console rub your right knee?
• Ask the owner to explain all of the vehicle controls to you.
• Try the audio system. Try pairing your phone. Once done, shut off the audio for your test drive.
• While the car is running but parked, turn the steering wheel all the way from one side to the other. Any binding, clunks, or surprises?

Moving slowly, turn the wheel all the way from side to side. Binding, clunking, or grinding indicates issues to look into further. While in the parking lot or side street, try the brakes. Be sure they work properly. Once you have a chance to drive the car, listen for squeaks, rattles, thumps, bangs, and any other sounds indicating issues. Hit a few minor road imperfections that are not monster potholes. How do you like the comfort?

During your test drive, accelerate briskly a few times. Does the vehicle respond properly? Are its shifts smooth? When you brake, does the car pull to the side at all? A car that pulls when braking should be avoided since that can be a pricey fix.

Highway test driving is key. Take the car up to the normal speed you drive on the highway. Is there any vibration? If so, it could be unbalanced tires, a tire defect, or it could be something more expensive to remedy. Does the car travel straight ahead, or does it want to pull to one side if you don’t hold it straight? If it pulls, it is likely out of alignment.

A test drive should confirm your happiness with the car you’ve chosen. If it does not, step back and re-evaluate.

Financing a Used Car

If you need to acquire an auto loan to purchase a used car, speak to your lender about how the transaction will take place. Private-party sellers are going to require that you provide a bank check or cashier's check. Your lender can outline the needed steps. Arrange your financing before you even begin to search for the car you wish to buy.

How To Pay For a Used Car

When it comes time to pay for the car, ensure that the person you are buying it from is the same person listed on the title. Ask to see the person’s driver’s license. Take an image of it with your phone. As the buyer, you are the one who should be given the car before you provide the money. Only pay for a car once you have the car's keys and a valid title in hand. If you are using a loan, confirm the title has been transferred and is in your lender's possession before you pay. As we have suggested above, don’t leave the payment method until the end. Ask the seller early on how they want to be paid.

How To Care For a Used Car You Just Bought

Once you take possession of your new-to-you car, get it to your state’s inspection location and ensure it passes. If you could not have the car you purchased inspected by a mechanic before you bought it, bring it to the shop now. Ask your mechanic to ensure it is safe to drive, has no identifiable mechanical problems, and have any maintenance that is due or overdue performed.

Create a list of the work you have done and what will be next on the maintenance schedule. Bookmark your calendar for upcoming maintenance and begin to budget for this expense. Your car’s maintenance schedule will be included in the owner's manual or warranty packet. If you don’t have a paper copy, you can find it online.

Buying a used car is easier than this comprehensive guide may make it seem. We’ve gone into great detail so that any shopper will have the information they need. Good luck!

Read more on Buying a Car here.