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The Smart Way to Buy a Car from a Private Party

Buying a used car can be a very smart move, regardless of what your credit score might be. You can get a great price, especially now that the market has settled down a bit and the supply chain isn't as bottlenecked as in the past couple of years.

Buying a used car from a private seller is one of the best ways to get your next car, especially with the numerous internet sites that make it easy for you to search for the exact year, make, and model you're on the hunt for. What's more, you'll typically pay less to a private seller than you would to a dealership due to a lower asking price. But how exactly do you go about it? Here are the best guidelines to buy a used car from a private party

Use Reputable Channels for Used Car Ads

There are a ton of ways to find a used car online, but not all of them are created equal. Sites like Facebook Marketplace, Craigslist, eBay Motors, and Autotrader can help you find a good used car, and you can search by locale, year, make, and model without much trouble. But some have better inventory than others, and they can even send you alerts based on your selections. Keep in mind that you have to read the ads carefully and shop the seller's reputation, not just for the vehicle you want. If they have poor feedback on eBay or questionable practices as a seller on Facebook Marketplace, steer clear. Autotrader has both dealers and private sellers, and you should be able to tell the difference if your read carefully.

You can go the classified ad route, as well, but that's used far less these days than the internet. The upside is that you may find a great deal, as a result, and you may even get a hard-to-find vehicle. The downside is that there are no photos and very little information other than the year, make, and model. There's also no way to vet the seller from the printed ad, another risk you probably shouldn't take.

The last route might actually be one of the best. If you're more flexible on your choice of vehicle, you can look to friends and family to see if anyone is selling a car they no longer need or want. You have the advantage of first, knowing the seller and second, probably getting a sweet deal as a family member will probably give you a hefty discount off the market price.

How to Do Your Research

Let's say you found the car you want to buy, what now? Should you just make an offer? Not when thousands of dollars are potentially on the table. You might feel rushed because the vehicle you want might be one that's much sought after. But keep in mind that, unless it's a friend or family member, you don't know the seller. Also, remember that when it comes to your state's lemon laws, they protect you from having to keep a defective vehicle sold to you by dealerships rather than from private sellers.

Here are some important questions to ask about the vehicle up for sale:

  • How many owners have there been?
  • Does the car have a clean title? If so, is it in the name of the seller?
  • If there is still a loan on the vehicle, how much remains and who is the lender?
  • Does the seller have a CarFax report that shows maintenance and accident records?
  • Has the car had any major mechanical repairs? Does the seller have records?
  • Does the seller have car's service records which reflect regular maintenance?
  • Is there a valid, transferable warranty still active?
  • What is the current odometer reading?

Obtain a Vehicle History Report

If the seller does not have a CarFax report or another type of vehicle history report, it would be wise to purchase one for yourself. The cost is negligible compared to the cost of a car that's defective. All you need is the VIN number from the seller, and if he or she is unwilling to provide it, then look elsewhere. If you don't go with CarFax, other good options include Bumper, Kelley Blue Book, and AutoCheck, with a single report typically costing between $20 and $50.

Although the car's history report doesn't reveal everything, it can provide key information about the car's ownership, accidents, repairs, odometer readings, title history, and lien information. If any of the information is inconsistent with what you've been told by the seller, it's a good sign that you should walk away. Also, take the time to look at the National Highway Traffic Safety Administration (NHTSA) for recalls of the specific model you are looking for.

Ask to Meet, Inspect, and Test Drive

Before you decide to buy, you need to, as they say, kick the tires. That means physically viewing and driving the car, as well as meeting the seller. Establish a meeting spot where you feel safe and where there's minimal traffic so you can test drive the vehicle in good conditions. Take a look at every part of the vehicle that's readily accessible.

Key points to check on the vehicle:

  • Condition of the vehicle's paint and interior. Look in the door frames for rust and get on your hands and knees to look under the car for corrosion, and oil/fluid leaks.
  • Operation of the lights, turn signals, wipers, washer fluid jets, doors, and windows.
  • Test the car's audio, climate system, heated/ventilated seats, seat adjustment, and in-car technology including the infotainment screen condition.
  • When driving the car, test the smoothness of the throttle, the transmission's shifting, and the responsiveness of the brakes. When you turn the steering wheel, there should be no drama. Make sure there are no errant noises from any of the aforementioned systems, including the engine.
  • Use every control in the vehicle and make sure the buttons and switches work. If there are some that don't, make sure that none of them detract from the safe operation of the vehicle and that you're willing to live with it or repair it yourself if the owner isn't going to take care of it prior to selling.
  • Drive the car in both city and highway conditions if possible. It's important to see how the vehicle behaves in stop-and-go conditions, as well as at higher speeds.
  • Test things that often get overlooked like the operation of smart cruise control, blind spot monitors, tire pressure monitors, sunroof/moonroof, and the condition and opening/closing of the liftgate/tailgate/trunk/hood latch.
  • Open the hood and check the visible condition of the engine.
  • Check the operation of the key fobs/remotes.
  • If any of this is not to your liking, prepare to walk away from the sale.

Start Negotiations

Let's assume that you are now convinced that the car is in good condition and checks out. Everything in the ad and the car history report checks out when compared to what the seller has told you. You've determined the value of the car based on Kelley Blue Book values, as well as private party selling prices. It's also a good idea to look at what the same year, make, model, mileage, and condition vehicle is going for on other websites.

If the price seems fair and you're willing to pay it, then the transaction should be easy. If the price is on the high side and/or more than you'd like to pay, then start negotiating. Don't offer a ridiculously lowballed price that will insult the seller, but make it low enough that you'd be willing to come up. Establish the price that you're willing to pay and do your best not to deviate from your budget.

Ask the seller for a contract that protects both of you. There are templates on the internet that can be printed out. Get two signed originals with names/addresses, the vehicle information (including the VIN) and the agreed purchase price. If you don't have the money with you, then confirm with them that you're committed to buying the car and will get them the funds. Pay with cash or a bank check to keep things on the up-and-up, and finalize the transaction.

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