Important things to consider when buying from a private seller
Earlier in this guide we walked you through the steps of researching a vehicle and the things you need to do before and during your visit to the car dealership. In a private transaction, many of these steps still apply. So make sure you review that section of the guide. Other things you should seriously consider when buying a car from a private party include:
- Don’t rely on a private seller’s representation of the car and its condition.
Because you can never know if a seller is truly honest (though most are), you should always make sure you check out the car before you give a seller any money or commit to buying the car. That means:
- Make sure you get an inspection by a mechanic you trust to evaluate the car and make sure it doesn’t have problems or issues. It’s worth the price if it saves you thousands in repair bills down the road.
- Get an InstaVin Check (www.instavin.com), CarFax Vehicle History Report (www.carfax.com), or AutoCheck Vehicle History Report (www.AutoCheck.com) to check whether or not the car has been in an accident or salvaged (totaled) in the past or if it has other issues. You also want to make sure the make, model, and year matches the vehicle’s VIN (Vehicle Identification Number). Sometimes, unscrupulous sellers try to pass off one similar vehicle as another. To learn about VIN’s and what they mean to you, see the section on VIN’s in this guide by clicking here.
- Never buy a car from a private seller if they don’t have the title
If someone tells you that the title is lost or some other excuse, turn around and walk away. Sometimes, unscrupulous sellers try to sell a vehicle that belongs to someone else… or even worse try to sell a car that is stolen.
- Make sure that you get a clear title
A clear title means that there are no loans or liens on the vehicle. Make sure that you get a clear title from the person you are buying the car from at the same time as you give him the payment for the vehicle. Never accept any assurances that the seller will give you the title in the future.
- Make sure the title has the seller’s name on it
Check the seller’s identification and make sure that the title matches the seller’s ID. That way you’ll know you’re buying from the actual owner of the vehicle.
- Make sure that the VIN on the title matches the vehicle’s VIN
The Vehicle Identification Number (VIN) can typically be found on top of the dashboard and is visible in the front window of the car. Make sure that the number on the title matches the number on the car.
- Sign over the title when you give money to the seller
Make sure that you have the seller sign over the title to you immediately upon payment. Don’t give him or her any money until this is done.
- Don’t delay on registering the car with the DMV
Make sure you take the title to your state DMV office soon after taking possession of the vehicle. The state DMV will give you a new title and new registration. You will also pay the sales tax (and other fees) for the vehicle at this time.
- Write up a Bill of Sale and have the seller sign it
It’s always a good idea to write up a simple Bill of Sale, as proof of sale and purchase. The Bill of Sale doesn’t need to be complicated: Just describe the vehicle including the year, make, model, VIN and mileage. You should also note the sale price and that the cost of the car has been paid in full. Lastly, make sure you include your name and the seller’s name, signatures, addresses, and date of sale. Keep the bill of sale in the vehicle at least until you have registered it with your state DMV. You may still want to keep it with the records of the car just in case you ever need it.
- Make sure you check the value of the vehicle
You should always check the “blue book” value of the car you are buying before you buy it at www.kbb.com or www.nadaguides.com to make sure you aren’t overpaying. You should also negotiate on the price if the car has defects, high mileage, excessive wear, damage, non-working equipment, or other problems.
- Get your car covered on your insurance immediately
Make sure you contact your insurance company immediately to make sure your car is covered on your car insurance policy.
- Private sales of vehicles are “as is” sales
Keep in mind that when you buy a used car from a private seller that the car is sold “as-is” without any guarantees, warranties, or any right to return the vehicle. The “Lemon Laws” only protect new car buyers, not buyers of used cars. In addition, there are no laws giving car buyers any type of “grace” period or “cooling off” time. If you find a problem after the sale, the seller is in no way obligated to take the car back or pay for any repairs.
- Consider purchasing an after-sale warranty for repairs
There are many companies that offer after-sale warranties/repair insurance for a used car. These warranties protect you from the high cost of fixing problems with the car in the future. Compared to the cost of fixing a vehicle, these can be a good value.
Beware the “Curbstoner”
Curbstoners are unlicensed professional car sellers who typically pose as an individual selling his or her own private vehicle. Often, Curbstoners buy vehicles from private parties without actually signing the title (avoiding taxes and expensive dealer licensing requirements). They then resell that vehicle to a third party typically pretending that the vehicle is their own. They often lie about the vehicle and can really harm unsuspecting consumers. The simple way to find out if you are dealing with a Curbstoner is to ask to see his or her ID and see if it matches the name on the title of the vehicle they are selling. If not, you might want to look for another vehicle.
Each state has separate guidelines as to how many vehicles an individual can buy and sell within a 12-month period. Typically this is between four and six vehicles. If a person exceeds that limit they will be required to get a Car Dealer’s License.
States are concerned about Curbstoning because licensed dealers have specific rules and regulations they must be in compliance with. These rules and regulations help protect consumers and make sure all vehicle sales transactions are legitimate.
States are also concerned about Curbstoning because the state typically will not receive sales taxes for at least one side of the purchase/sales transaction.