If you need a new vehicle and want to purchase a used car, buying a car from a private seller can be an attractive option. You won’t be paying for any of the additional costs and fees you’d pay at a dealership, and an individual won’t be thinking about making a profit for the company — an individual selling a privately owned vehicle is generally going to want to sell the car at a fair price, quickly and without too much hassle.

It’s also never been easier to find a used car — the internet means purchasers can often find the exact vehicle they are looking for, even from a private seller. While technology has made it easier to find the right used car from a private seller, it has also made scamming an unsuspecting purchaser easier as well, particularly when it comes time to pay.

When you buy a car from a private seller, you’re also going to be foregoing some protections that you’d typically have if you purchased from a dealership, so it’s important to do all of your homework before you buy a car from a private seller.

Price and condition

If you’re considering buying a car from a private seller, keep in mind that a lot of the work that typically falls to a dealership is now your responsibility. From determining if the price quoted is fair, to securing financing, and doing the research to verify a car’s ownership history to see if it was in any accidents, all of the legwork in a private sale falls to the purchaser. It’s a good idea to use a checklist, especially if it’s your first time buying a car from a private seller.

Check a reputable site to get a rough idea of what a used car similar to the make, model, year, mileage, and condition of the one you have your eye on should cost. Kelley Blue Book is an established and trusted resource for information on used vehicles, as is Edmunds. This will give you a ballpark estimate that should help you determine if the price being asked by the private seller is reasonable.

Private sellers are not going to offer financing for a used car — they will want cash up front. This is another reason you should first check the price you’ve been quoted; in addition to making sure it’s a fair price, you’ll need to have the cash available to pay for it.

The condition of the car is going to have an impact on the price — and how happy you’ll be owning the car. There are no “lemon laws” to fall back on in a private sale, so it’s critical you take steps to ensure the car is in good, safe condition before you buy it, or you might risk getting stuck with costly repairs.

VIN, title, and other documentation

As early in the process as possible, ask for the vehicle’s VIN (Vehicle Identification Number) from the private seller. Using the VIN, you can order a vehicle history report from a service such as Carfax or AutoCheck, which will let you know the car’s owner history, if the car was ever in an accident, subject to a recall or has experienced an airbag deployment.

A private seller must be able to present the title of the car being sold. Check the title to verify that the person selling the car — ask to see a driver’s license — is indeed the owner. Check the VIN against the number on the title; it must match exactly.

Check the title of the car closely. In addition to matching the VIN, the owner’s name should be listed on the title, not a bank or other financial institution. If an owner shows you a title that does list a bank as the lien holder and states that he or she has just paid off the vehicle, presenting you with a lien payoff statement, call the financial institution listed and verify that the loan has been paid in full. If it has not, the person selling the car doesn’t own it yet and isn’t legally able to sell you the car.

A title will also alert you if the car has had major work done. Watch for terms such as “rebuilt” or “salvage” on a title; these can indicate that the car at one time had severe damage and was repaired. This can cause reliability problems or mean expensive repairs. If you live in an area that has recently experienced a natural disaster such as flooding, it’s particularly important to be on the lookout for these terms if you’re buying a car from a private seller.

Other documentation that might be required are things such as a bill of sale and vehicle emissions test results. Requirements can vary based on the state and jurisdiction you live in; if you have questions about transferring the ownership of a vehicle purchased through a private sale, check with your local Department of Motor Vehicles.

It should go without saying, but if the person selling the vehicle cannot produce a title, do not buy the car. If the owner says the title has been lost, ask the owner to apply for a duplicate title and don’t move forward with the sale until one is produced.

Test drive and inspection

Don’t fall in love with a gorgeous paint job. When you go to test drive the vehicle, check to make sure the car is insured. If you’re driving and get in an accident during the test drive, if the person who owns the car doesn’t have insurance, you could be held liable for any injuries or damage.

During the test drive, make note of the odometer reading, and test to make sure all lights (brakes, turn signals, headlights, etc.) work. See how the car performs on the highway as well as neighborhood roads if possible — you don’t want to buy a car for a highway commute and then find out it rattles at any speed over 50 mph.

Unless you’re really good with cars and know exactly what to look for under the hood, it’s best to have a professional mechanic look it over. Most autobody shops will perform inspections for a flat rate; it’s money that is well-spent if they find something major that will need repair.

If everything checks out and you’ve decided to go ahead with the purchase, make sure to contact your insurance company so that you’re covered as soon as you get behind the wheel of your “new-to-you” car.

When purchasing any car, including one from a private seller, it’s a great time to reevaluate your car insurance needs. Compare how your current car insurance company ranks against the insurers that other consumers have rated as the best car insurance.

Comparing rates for your new vehicle can be a great way to save on your car insurance. Try QuoteWizard to quickly compare car insurance rates from multiple companies.

Checklist for how to buy a car from a private seller

Before buying a car from a private seller, make sure you’ve accomplished the following steps:

• Verify the car’s asking price is fair market value
• Check the car’s condition
• Order a vehicle history report using the VIN
• Verify the private seller is listed on the title
• Watch for terms such as “rebuilt” or “salvage” on a title
• Test drive the vehicle, ideally on the highway and neighborhood roads
• Have a professional mechanic look it over
• Contact your car insurance company

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.