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Buying Cars from Private Sellers

Buying Cars from Private Sellers

Finding a privately owned used car for sale is easy. You see them parked in front of homes and near busy crossroads and sellers often list them in local shoppers and on websites. However, usually the only information readily available is the price and a list of features that the seller hopes will impress you. So, how do you make a wise decision when you're buying cars from independent sellers?

Interviewing Used Car Sellers

Your car's seller should be the person who drove AND maintained the car. If not, ask if you can speak with that particular person. The owner should be able to provide information as well as records for:

  • Past maintenance and repairs.
  • Oil and fluid changes.
  • Mandatory and recommended periodic services.
  • Tire purchases and rotations.
  • Modifications.
  • Proof of warranty information.
  • Annual safety and emissions inspections, if required by the state.
  • Completed recalls.

If the seller is unable to supply complete records, the dealers or automotive shops that performed the services should have them. These professionals can confirm the vehicle's maintenance history and supply records if you decide to buy the car.

Inspecting and Test Driving

With a glossy coat of wax and a sleek build, even a used car can be eye candy. However, when you buy from a private seller, you're buying that vehicle as is. If you later discover something wrong, the problem is yours. When buying cars that are used, three key steps can prove helpful:

  • Inspect it yourself with an objective used-car inspection checklist.
  • You can use a printed list or a phone app, but having specific criteria will keep you on task.
  • Have a reputable mechanic or repair shop inspect the vehicle.
  • If your state requires annual safety and emissions inspections, you might want to choose a state-certified facility for a presale inspection.
  • Test drive it.
  • While a top-notch stereo system is great, the test drive is about assessing the car's mechanics and functionality under the full gamut of driving conditions.

During the test drive, plan a route that will demonstrate the car's full performance abilities, including:

  • Braking.
  • Acceleration.
  • Visibility.
  • Noise level.
  • Comfort.

Assess how the car feels and handles, and note any sounds the car makes while you're driving. You'll want to watch for exhaust smoke or fumes, and check for interior, vent or air conditioning odors. Avoid distracting conversation with the seller so that you can focus on the car.

Buying Cars That Aren't Stolen, Flooded or Salvaged

A number of trusted databases record damage to vehicles by VIN. Performing VIN checks on these sites is equivalent to running a background check on the car to ensure it wasn't:

  • Stolen.
  • Totaled.
  • Salvaged.
  • Submerged.
  • Damages.
  • Illegally altered.

The National Motor Vehicle Title Information System (NMVTIS) is a Department of Justice database. It's available to anyone and tracks stolen, totaled, and salvaged vehicles. It also provides vehicle history to include odometer readings.

Negotiating a Fair Price When Buying Used Cars

When buying used cars, you may find that rock-bottom prices are just as concerning as high prices. That's why it's important to do your homework on what a car of that make and model is worth. Resources on this type of information include:

  • Kelley Blue Book.
  • Edmunds.
  • NADA Guides.
  • VMR Auto Guides.
  • Online used car dealership listings.

Once you have an estimate, you can adjust for:

  • Mileage: Consider not only low or high odometer readings but also impending mileage milestones, which are thresholds typically associated with:
    • Warranty limitations.
    • Drops in value.
    • Major maintenance services (e.g. timing belt changes).
  • Condition: Evaluate the true condition of the car's external, internal and mechanical features.
    • For example: A car with high highway mileage may actually be in better condition than one with lower mileage from stop-and-go city streets, for example.
  • Options: The car you're interested in may cost more if it's equipped with stock features like:
    • Leather seats.
    • Air conditioning.
    • All-wheel drive.
    • Moon roof.
    • Diesel engine.
  • Customization: While fancy aftermarket rims or elaborate stereo speakers are pricey to purchase and install, they are personalized items that may actually detract from the car's value.

Filing Paperwork for Buying Used Cars

Once you've negotiated the terms of your deal, you'll need a few important documents to complete the sale and transfer. Each state has its own set of requirements and title transfer procedures for buying used cars.

Generally, you will need these documents:

  • Certificate of Title.
  • Bill of Sale.
    • Whether a title is available or not, the seller must issue a bill of sale. Most states offer standard forms that sellers can download and complete.
  • Statement of Buyer's Agreement to Purchase.
    • This contract protects both the seller and the buyer and fully details the information listed on the bill of sale, as well as any other conditions of the sale, to include:
      • Deposits on the purchase.
      • Terms of payment for any remaining purchase price.
      • Conditional repairs, maintenance or inspections.
      • Conditions of delivery.
      • Any disclaimers or exceptions.

Staying Safe While Buying Cars From Private Sellers

Buying used cars from private sellers is less regulated than buying from a dealer, so exercise caution.

Here are a few tips to ensure your transaction is safe and fair:

  • If a seller isn't open to questions, the car may have problems.
  • If the seller's name doesn't match the vehicle's title, they'll need a valid power of attorney from the title holder to be able to sell the used car.
  • Insist upon the correct documents required by your state's department of motor vehicles and tax authority.
  • Don't carry large sums of cash for an initial meeting. and
  • Bring a friend/witness for any cash transactions.

If you keep your eyes open, you just might spot the perfect vehicle for the perfect price at the perfect time.

Next: Car Selling Scams