Sometimes you can get a great car at a great price by buying it from a private individual instead of a dealer—but that good deal might come with risk. Read on to learn how you can protect yourself when purchasing a used car from a private seller.
Buying a Used Car “As Is”
One of the biggest risks involved with buying a used car from a private individual is the fact that in most instances, you won’t be protected against defects. Unless the seller made specific promises about the car in the purchase agreement—or the manufacturer warranty or service plan covers the car (you’ll need to check the terms)—you’ll take the vehicle in the current condition, or "as is." In most cases, if something goes wrong, you won’t have any recourse.
Unlike dealers, private sellers don’t sell the car with a buyer's guide (a written disclosure that states whether the car comes with a warranty or "as is"). However, a seller can’t lie to you. If the seller makes certain guarantees to you, get it in writing. If it turns out the information is false, a consumer attorney can advise you about any potential recourse.
(Find out more about buyer’s guides in Lemon Laws and Your Vehicle Warranty.)
Scrutinizing the Advertisement
In today’s digital world, it’s likely that you've found a promising vehicle on a website. If that's the case, you’ll probably want to do some preliminary investigation before committing yourself to an in-person inspection. For instance, you ought to consider the following questions:
- Do the pictures appear to be of the actual vehicle or are they the original manufacturer's pictures?
- Does the advertisement include details such as the condition, transmission type, and mileage?
- Does the seller have multiple ads?
These and other such questions should help you avoid a practice commonly referred to as "curbstoning." Curbstoning comes in many shapes and sizes, but the purpose is always the same: to get around regulations or pull a fast one on the buyer. For instance, the seller could be a dealer posing as a private seller, which can be problematic because a dealer is subject to greater restrictions than a private seller. Another form of curbstoning involves switching the seller's identity. In other words, the person selling you the car might not be the individual on the car’s title.
Researching the Vehicle
Before contacting the seller, it’s a good idea to research the make, year and model of the car you’d like to buy. Here are a few things you’ll likely want to know:
- the average price for a similar vehicle
- any potential recall issues (try doing a search on www.safercar.gov), and
- common defects for that car.
This information should help you determine the amount of your offer—or help you decide whether the better course of action would be to look for another car.
Inspecting the Car
You’ll want to take as many notes as you can on the condition of the car because you’ll need the information to perform follow-up research. For instance, you’ll likely take down the following:
- the odometer reading and VIN (check for signs of tampering)
- signs of repairs or body work (fresh paint, new upholstery), and
- oil or water leaks.
Also, you might want to ask the seller the following questions:
- Why are you selling the car?
- What repairs have been done?
- Does the car need further work?
- Has the car been in an accident?
- Is the car under a manufacturer's warranty or service plan?
You’ll want to take a test drive and, if you can, have the vehicle inspected by a mechanic. The technician can provide you with a written inspection report and an estimate for any necessary repairs.
Also, you should be able to obtain a vehicle history report from your state's bureau or department of motor vehicles. Such reports contain information about the car's prior owners, accident and theft history, and maintenance and repair records.
Documenting the Sale
Putting your agreement in writing is important. You’ll want to document the purchase price, any promises the seller made about the car (such as its condition), and other relevant terms. Additionally, if the seller still owes money on a car loan, you’ll want proof that the loan is paid off. Finally, you’ll need to complete the transfer documents required by your local bureau or department of motor vehicles.
(For consumer resources, see Consumer Protection Laws.)
Questions for Your Attorney
- What documents do I need to close the deal?
- What is required to change ownership?
- How can I make sure that the owner paid off any car loans?