By Anthony Santiago - Editor-in-Chief

August 14, 2022
how to buy a car from a private seller

How to Buy a Used Car From a Private Party

Finding Cars Sold by Private Sellers

The internet has changed everything. Today, it seems like there are more ways than ever to buy things online. You can use Amazon, eBay, Craigslist, Facebook Marketplace and even apps like Carvana.

By the way, I did purchase a car from Carvana and will be sharing my experience from start to finish.

But what about buying used vehicles from people you know? If you want to find out how easy it is to buy used cars from friends or relatives, we’ve got some tips to help you along the way.

How to Research Cars For Sale by Private Sellers

If you want to find a great deal on a used vehicle, it helps to do some research beforehand. Before buying a car, make sure you understand the process involved especially if you are buying it privately. This includes researching the car itself, determining whether it needs repairs, and finding out where to sell it. If you don’t plan ahead, you could end up paying too much for something you didn’t really care about.

The first step in researching a car for sale is figuring out the potential areas to address from current owners and researching on Google the service schedule. You will want to know if there are any impending major services or repairs to be made. This could be a reason the car is for sale. 

Once you’ve determined why someone wants to sell the car, you can start looking into the history. Find out how many miles it has been driven, how often it gets serviced, and whether it has ever had major problems.

You should also ask yourself some questions.

  • What are the features and options?
  • How old is it? Is it reliable?
  • Does it run well?

Find Out Private Party Price

Another important thing to consider when searching for a car for sale is price. Don’t pay too much for a vehicle just because it seems like a bargain. You will need to cross reference the current market price.

My go to resource is KBB.com. Focus on getting a fair price for the money based on the condition of the car. Note, my rule is that one-owner cars can command the highest price. 

If the car is in great condition, it's worth purchasing at full asking price so you avoid losing the deal to another buyer. 

The reason I prefer private party sellers is that dealerships charge hundreds of dollars in fees. Dealerships charge anywhere from $200-$1,000 per vehicle depending on where it’s located. They also add additional costs like taxes, registration, etc.

Finally, don’t forget to factor in sales tax. Many states require buyers to pay taxes on vehicles sold within their borders. I know when I registered the car, the local DMV required me to pay the sales tax. This is determined on the bill of sale and the amount written on the title.

Exploring the Marketplace

A recent study found that buyers are most likely to buy a used car based on what they see in person. In fact, the research showed that people are willing to pay $1,500 more for a car just because they saw one up close. This makes sense since they're able to visually inspect the car and make sure it runs well. If they don't like how the car looks, they won't purchase it.

If you want to buy a used car privately, here are some tips to keep in mind:

1. Do Your Research

Make sure you know what you’re getting into. If you’re buying a used car, check out reviews and ratings. Look at how long the car has been listed for sale? Does it look like someone is currently driving it? Is it clean inside and outside? How much work is needed to pass inspection or have it running to your satisfaction?  These types of questions can help you determine whether or not you’ll be able to trust the seller.

2. Be Prepared

You’ll probably spend most of your time negotiating price. Make sure you have everything ready ahead of time. Bring cash or a cashier's check to make the process easier. 

3. Research the Seller

Check the seller’s identity before you complete the transaction. A lot of people are selling vehicles without the proper paperwork. If the seller doesn’t have the title, don’t buy it. You could end up losing money. Also, check out to see if the seller has any other cars for sale. They might be a dealership but listing as a private owner. 

The buyer should make sure the vehicle has a clear title history. There are several ways to check this information. For example, you can use Carfax or AutoCheck.com. These sites provide detailed reports about the vehicle’s ownership history. They’ll tell you whether there have been any accidents or theft claims. You can also ask the seller to show you the original registration certificate. 

If you decide to purchase a used car, you want to make sure the vehicle is free of liens. This includes bank loans, insurance payments, tax bills, etc. Any outstanding debts will affect your ability to resell the car later. The private seller MUST have the title. If they do not, then they will need to settle any lien on the vehicle. 

The Test Drive

Once you’re familiar with the car, you can move onto the next step – inspecting it and taking it for a test drive. Take a close look at every part of the car. Look under the hood, check the tires, test the brakes, and see if anything looks loose or damaged. Make sure everything works properly, including lights, wipers, and turn signals.

Be sure to check the air conditioning and the heater. If the AC is warm, it might need a recharge, but there could also be a leak. Learn from my mistakes and be sure to check EVERYTHING.

Check the interior for stains and wear, and take note of any issues such as missing seats or door panels.

You should always look over the car carefully before signing anything. Look under the hood and inside the trunk. Check out the tires and the body for dents and scratches. Take note of any major issues. If something looks suspicious, stop the sale immediately.

Finally, ask yourself if you like the color, style, and overall appearance of the car.

Purchasing the Car with Motor Vehicle Bill of Sale

A bill of sale is required to register or transfer ownership in a motor vehicle. You'll need one if you buy a used car, sell a car, or trade cars.

The document includes important information like the make, model, year, color, and mileage of the vehicle. If you're buying a car, you'll need to know how many miles are left on the odometer.

You'll also need to sign the bill of sale. This ensures that the person selling the car actually owns it.

If you're selling a car, you'll hand the bill of sale to the buyer along with the keys. They'll take possession of the vehicle and pay you for it.

Register the Vehicle

Vehicle registration is required if you live in an area where it’s required. If you don’t, you must pay the fee online. Paying the fee online makes registering easier and faster. You won’t find any paper forms or stamps at your local post office.

Your locality will provide you with the necessary forms and instructions. And once you register your vehicle, you’ll receive a confirmation email.

Install License Plates

After you register the car, you will obtain your new license plates. Install your plates and be aware of local laws. Just recently any license plate frames that obscure the state are illegal in NY and NJ. 

The state of California requires that every vehicle must display valid registration tags. This includes cars, trucks, motorcycles, motor homes, trailers and even boats. If you don't have the proper license plate on your vehicle, it could lead to fines and possible jail time.

Final Thoughts

In conclusion, buying a used car from a private seller can save you thousands of dollars compared to buying a similar vehicle from a dealership. However, it does require a bit of extra effort on your part. So before you go out and buy a preowned vehicle, make sure you know exactly what you want and where you plan on driving it.

You'll also want to check out the condition of the vehicle carefully. A clean title history report is essential, as well as a clear inspection report. Make sure that the odometer has been checked and that the engine runs smoothly. Also look over the interior thoroughly; if anything seems amiss, ask the owner to explain it to you. Finally, drive the vehicle around a bit and test its brakes. If you notice any problems, you'll be able to tell right away whether or not it's safe to purchase.

Once you've found the perfect vehicle, you'll need to decide which financing option works best for you. There are two main types of loans available: cash sales and lease/purchase deals.

With a cash sale, you pay for the car outright and receive a bill of sale. This type of payment is usually ideal for buyers who prefer to avoid monthly payments. I recommend that you purchase the car outright to avoid any interest. 

Buying a car from a private party can be rewarding if you do your research and homework. Good luck!

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Anthony Santiago - Editor-in-Chief

About the author

I am a passionate car enthusiast who likes to help people save money and avoid headaches when it comes to cars. I believe that everyone can find the right car at the right price. I share my tips and experience so you can learn quickly and maximize your next SUV, truck or car purchase.

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