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Buying a used car from a private seller 

Buying a used car from a private seller 

Buying a used car from a private seller isn’t the same as going through a dealership. You can browse used cars online, but you must check the condition and ensure the listing is legitimate before buying. If everything checks out, you’ll be ready to explore your financing options and finalize the purchase. Find out what steps to take and how to protect yourself when buying a car from an individual instead of a dealership. 

Where to buy a used car from a private seller?

The internet has made finding pre-owned cars for sale easier than ever. You can search classified ads and marketplaces online for cars nearby and around the country. Go over the most popular sites for online car sales to see which is right for you.   

Buying used cars from classified ads, Craigslist, and other online classified ad sites have basic tools for searching for cars and messaging owners. If you find something you like, you can arrange a meetup with the owner and go for a test drive. 

You’ll work directly with the seller on these sites, and there aren’t safeguards in place. You can find good used cars for sale, but you may come across scams, too.  

Other online marketplaces for cars

Online marketplaces have also popped up, giving you more options for buying a used car from a private seller. Facebook Marketplace, eBay Motors, and Autotrader are popular with sellers and buyers, but Autotrader offers the most protections. 

Buying used cars on Autotrader

Autotrader’s Private Seller Exchange protects buyers by verifying identities, performing vehicle history checks, and ensuring the sellers are the registered owners. You can also obtain a free AutoCheck report if a car grabs your interest.

Autotrader can connect you with lenders that provide used car financing if you’re ready to buy. Plus, it’ll forward the pay-off balance to the seller’s bank if there’s an existing loan on the car.  

Know the disadvantages of buying from a private seller

You were drawn to buying a car from a private seller due to lower prices and other benefits. Still, there are some disadvantages, too. Knowing what to look for can help you stay safe when buying a used car from a private seller.

Risks of buying from a private seller

Car dealerships must follow the law when selling cars. The secondhand market isn’t regulated, so there are some risks. Go over the risks, and then find out how to protect yourself by following the best practices for a private car purchase. 

Hidden damage

There are countless horror stories of people who were duped into buying pre-owned cars with hidden damage. Shortly after the sale, the cars broke down, costing the new owners tons of money in repairs.

Some private sellers simply didn’t realize their cars had significant issues. But others may have just wanted to make the sale, so they didn’t disclose any issues.

You’ll have trouble getting your money back unless you prove that the seller intentionally misled you. Even with proof, a small claims court will probably be your only option. Then, you’ll have to hope the person has the money to pay the claim if you win the case.  

Identity theft

Some people list cars they don’t have any interest in selling. In reality, they post used car ads to lure victims. Once they find a mark, they ask for personal information they don’t need to sell the car. 

If a seller asks for more than your name and phone number, back out of the deal. That’s a sign that the seller wants to steal your identity. The seller will disappear after getting your information, and you won’t get the car. 

Financial theft 

Scammers also set up fake car ads to steal people’s money. These fraudsters try to get people to buy cars sight unseen. They have the buyers wire money or send gift cards and then disappear. The money is hard to track, so the buyers usually don’t get it back. 

Fake mileage

Let’s say you’re looking at two used cars. They’re the same year, make, and model, but one has 70,000 miles while the other has 40,000 miles. Even though everything else is the same, you’d pay quite a bit more for the lower mileage car.

Fraudsters know this, too, and they’ve found a way to increase profits by rolling back the odometers on cars before selling them. The NHTSA estimates buyers purchase around 450,000 cars with false odometer readings each year. Those buyers spend thousands of extra dollars on their cars. 

Car theft

Movies and TV shows make you think that car thieves have one of three agendas: sell the car for parts, go joyriding, or use the vehicle to commit other crimes. In the real world, thieves also sell stolen cars to make quick cash. 

They do this through a process called car cloning. After getting the car, they steal a VIN number from another vehicle. They use it to make fake VIN tags and other documents, creating a clone of the original car. 

Thieves typically sell the cars out of state to make the theft harder to detect. Still, there’s a good chance that law enforcement will eventually realize you’re driving a stolen car. When that happens, your car will be impounded, but you’ll still be on the hook for your loan payments. 

No warranty coverage

Sometimes, you’ll find a great deal on a pre-owned car that’s still under the manufacturer’s warranty, but that’s rare. Most of these used cars are sold without warranties and aren’t covered under Lemon Laws.

Title washing

State agencies issue branded titles when cars have major damage or other issues that make them unsafe to drive. Common types of branded titles include salvage, flood/water damage, lemon, and rebuilt/reconstructed titles. Cars with branded titles can be dangerous to drive and are less valuable than cars with clean titles.

If you see a car with a branded title, you should walk away. Unfortunately, some sellers don’t make that easy to do because they wash the titles. Washed titles look clean, and buyers don’t realize the problem until the car sales go through. 

Get a pre-purchase inspection

Secondhand cars are typically sold “as-is” when purchased from private sellers. If you end up with a lemon, you’re unlikely to get a refund. The same is true if the car has many issues and needs expensive repairs.  

You can protect yourself and your bank account by getting the car inspected and discussing potential future issues with the mechanic. Pre-purchase inspections usually cost $100-$200 and can save you money in the long run. 

Finding a mechanic 

Even if the private seller recently had the car inspected, you should still have a mechanic take a look. Ideally, you’ll use a mechanic who specializes in the brand you want to buy. If that’s not an option, you can use your local mechanic or choose one online based on reviews and reputation. 

If the seller won’t let you take the car to the mechanic, you have several options. 

First, you can ask the seller to accompany you to the mechanic’s shop. Second, you can use a mobile inspection service. If the seller won’t agree, you have to wonder if they’re hiding something. 

Reviewing the pre-purchase inspection report 

Your mechanic will use a car inspection checklist to check the car’s mechanical, safety, and cosmetic condition. Then, you’ll get a report with the findings. The best-case scenario is that the mechanic determines the car is problem-free and road-ready. 

It’s also possible that the mechanic finds some minor problems that can be repaired. These problems shouldn’t cause long-term issues if they’re fixed. Most minor repairs are affordable and can be done quickly. 

Finally, the mechanic may find that the car has significant issues and shouldn’t be driven until it receives extensive repairs. If that happens, it’s best to walk away unless the seller pays for the repairs. 

Calculating the real cost of ownership 

Your pre-purchase inspection report will let you know how much you must spend on the car now. Next, ask the mechanic about future maintenance costs. Your mechanic can provide a maintenance schedule with the costs so you know the real cost of ownership.  

Examine the vehicle history report

“One owner – grandma only drove it to church once a week.” Private sellers love making that claim, but you can get the truth by obtaining a vehicle history report from carVertical or another service. 

These reports pull data from the DMV, insurance companies, and other agencies and include the car’s:

  • Accident history
  • Usage 
  • Title status
  • Mileage 
  • Number of previous owners 

Some marketplaces and sellers provide these reports free of charge. Otherwise, you’ll need to pay a small fee to get the report. You can purchase a single report or save by buying reports in bundles. 

Use a tool to uncover hidden car flaws

Pre-owned cars can have clean vehicle history reports and still have flaws. Go the extra mile by using tools for spotting hidden damage that might not be in the report. OBD2 scanners and accident detectors are helpful when buying a used car from a private seller.  

Basic OBD2 scanners perform diagnostic tests on cars. You can also get features like odometer checks if you spend a little extra money on your scanner. Keep this scanner handy after buying the car to monitor its health. 

You also want to see if the car was in an accident that didn’t appear in the vehicle history report. The Paint Spy Accident Detector checks for body damage that isn’t visible. You’ll also discover if the car has hidden rust or was repainted.  

Private car sale negotiation 

You know you can negotiate car sales at a dealership, but what about during a private sale? Some private sellers stick to the listed price, but many are willing to negotiate. These negotiation tips for purchasing pre-owned cars from owners can help you get a deal. 

Get the car’s resale value 

First, you need to know how much the car is worth so you can negotiate the price. Kelley Blue Book is a fantastic resource for valuing used cars. If you don’t know the VIN, you can find the value by inputting the following:

  • Year
  • Make
  • Model
  • Mileage 
  • Zip code 
  • Options/Features 
  • Color 
  • Condition

You’ll see a private sale price range after providing the information. Use the low end of the range when negotiating the price.  

Deduct the cost of repairs 

Did you find a used car that needs repairs? If the repairs are minor, you can still go through with the sale, but you shouldn’t pay full price. Negotiate to get the seller to lower the price so you can repair the car.  

Set your price range

You don’t want to get caught on your heels during the negotiation, so know your price range upfront. After setting the maximum amount you’ll pay, think about what you want to offer. A good starting point is 5-10% under the asking price

Paying for a car purchased from a private seller

If you don’t have the cash to pay for the car, you’ll need to finance it. Used car financing is different when buying from a private seller. You’ll need to secure the loan instead of having a dealership handle it for you. 

Private-party auto loans 

Some lenders offer private-party car loans to finance used vehicles. Like traditional auto loans, these are secured. Still, lenders take on extra risk when it’s a private sale, so they usually have higher interest rates and shorter terms. 

How to get a private-party car loan

Without a dealership handling the details, you’ll need to provide all the required information to the lender, such as the following:

  • Vin number
  • Year, make, and model
  • Mileage 
  • Copy of the registration 
  • Copy of the title or title status
  • Pay-off amount for the owner’s existing loan 
  • Bill of sale 

If approved, the lender will use the funds to pay off the remaining balance and forward the rest to the seller. 

Personal Loans 

If you qualify, you can take out a personal loan to pay for a used car. These are unsecured loans, so you’ll need a higher credit score to get approved. After approval, you must send the money to the seller and pay off the existing loan, if there is one.  


Can you get auto loans when buying from a private seller?

Yes. You can obtain a private-party auto loan from a bank, credit union, or another financial institution. 

Is buying from a private seller worth it?

Yes. You can get a good deal when buying from a private seller. It’s worth it as long as you get an inspection, review the vehicle inspection report, and get a fair price. 

What is the main disadvantage of buying a car from a private seller? 

The uncertain vehicle history is the biggest concern when buying from a private seller. Follow the best practices for a private used car purchase to learn about the vehicle’s history.

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