Essentials of buying a used car from a private party

Cars have become a lot more reliable and safer over the years. As such, buying a used car is often of high quality at tremendous savings – when comparing to a new car. But savings should never mean buying a risky car that keeps you in the repair shop or encounter other problems such rolled back or disconnected odometer, or salvaged history. So given the risks associated with buying used cars, why do people still why used cars? Here are some reasons:

A used truck – SUV from Mercedes
A used truck – SUV from Mercedes
  • New cars depreciate in value quickly. So when the owner sells, the savings are passed to the new buyer.
  • There is a large supply of used cars in high-quality

These advantages do not necessarily mean all used cars are without problems. In fact, buying a used car is always riskier than buying a new car. If you are buying the car from a used dealer, you may less chance of troubles than buying from private owner. When a used car dealer sells a car or truck, the car or truck is checked for problems. The problems ought to be fixed before the car is sold. Plus, the used car dealer offers some warranty on what he is selling. If you buy a car from a private owner, the car is not necessarily trouble free. As such, consider the following points to avoid common mistakes and consider what is important in buying a used car.

We assume here you already have taken care of car financing (i.e., you already are approved for a used car loan or you are buying with cash).

Finding a used car

You not only can find a used car for sale on a street, parking lot, or drive-way but also in ads in newspapers and number of internet sites. The classifieds in newspapers and on websites is usually categorized by the type of vehicle but websites offer you the flexibility of searching by other criteria to narrow your search. For instance, listing by type of vehicle may consist of:

  • Cars
  • SUVs / vans
  • Pickup trucks
  • Motorcycles
A variety of used cars on a lot.
The graphic shows used cars from brands such as auto Toyota, Bmw (station wagon and sedan), Honda, and Nissan.

As newspapers take listing of the cars for sale from dealers and private owners, the listings are often mixed from both sellers. Consequently, finding is a car from a particular seller (dealer or private owners) is not very convenient. A website addresses these and other shortcomings of newspaper classified sections. A website lets you search by make, model, price range, and even location criteria. With just a few clicks, you will find potentially a number of cars matching your criteria. If you see fewer or many results, consider revising your search.

A quick tip

Take a second opinion on what you choose to buy. Consumer’s magazines and consumer rating websites often rate all kinds of cars. A car that you want to purchase may also be included in those ratings. The idea is: don’t buy a car that is rated as used cars to avoid.

As you search online or in the newspaper, try nothing the sellers you want to contact. It is recommended to find more than one car for considering for purchase because the car you pick as the one you really want could be already sold. So by having your eyes on more than one car, you are likely to move to the next step.

Inquiring about the car

You should call or email the seller to ask any questions you have regarding the car. For instance, you could ask:

  • Ask for the car maintenance records.
  • Ask how the car was used? Was it used primarily on highway, city, hills, etc.?
  • Is the car driven mostly by adults or younger drivers? If you are buying from an adult or older driver you are likely to find the car is driven by someone who has been responsible. The same level of responsibility may not be expected from a younger driver.
  • Is the seller first-owner? If you buy a car from fourth-owner, you may not find answers to all of your questions.
  • Ask if the car has any salvage history. A salvaged history car has low resale value.
  • Ask if the car has any accidents. A car involved in an accident is generally not expected to maintain its value compared to an identical car with no accident.
  • Ask about the description of the car’s condition.
  • Ask if the car mileage is actual.
  • Ask if there are any paint jobs.
  • Ask if the car needs any repairs or other scheduled maintenance.
  • Ask any other question you may have.

Important note

Ask for a VIN number to check out the car’s history. You should do this before you purchase the car. A car history reports can reveal important information such as accidents, flood damage, and so on. This information can be obtained for a small fee from CarFax ( or a dealer.

The car description and the graphics (if available) may answer some of the theses questions but you should ask others before you go for a test drive. If you determine the seller’s answers are satisfactory to your purchase preferences, you are ready to ask for a test drive or car inspection. For this, you will need to make an appointment and agree on a location to see the car.

Inspecting the car

As you are buying the car from a private owner, it is your responsibility to check the car for existing problems. As you are buying a car as is, there is no warranty. When a car has no warranty, the seller has no obligation to fix the problem on the purchased car. If you are not familiar with the mechanical system of the car, consider taking a trusted mechanic with you. Or, first see the car and test drive it. If you like the car, then you can take the car to your mechanic.

A quick tip

Before you buy, make sure the car is not stolen or being sold without the actual owner’s consent. You can easily verify this is not case by asking the seller for a driving license and the car registration card. The name on the license and on the car registration should match otherwise you need to investigate this matter further or just leave without buying.

As part of thoroughly inspecting the car, remember to make notes of what is not working. If you are not a mechanic, you may find only obvious and visible problems. Nonetheless, they are problems that you should make yourself aware of. Try changing the seat’s position even if it is in a comfortable position. Doing so will tell you whether or not the seat moves. If the seat does not move, note this on a piece of paper. Note other problems on the paper as part of your inspection. This report will be handy when you negotiate on the price or when you take it to the mechanic to get an idea of the seriousness of the problem.

Go for test-drive, preferably in all road settings, for example on highway, small roads. Look at the car condition – make sure everything is in working or acceptable condition. Here are some questions to ask yourself to judge the car

  1. Do the windows open and close?
  2. Do all locks work? Try using the key on all locks.
  3. Do the side mirrors adjust to your driving preference
  4. Do the seats adjust to your preferable setting?
  5. Is the car clean?
  6. Is the model and side of the car suitable to your needs?
  7. Does the car have any visible damage?
  8. Is the car exterior recently painted?
  9. Does the car bumper look newer than the rest of the car exterior? If this is the case, it is because the bumper was repainted – because the car was in accident.
  10. Is the there any sign of mileage tempering?
  11. Is the car stolen? Verify driving license and registration of the seller.
Be sure to know the odometer reading. Make sure the seats adjust to your driving preferences
Be sure to know the odometer reading.
Make sure the seats adjust to your driving preferences
Make sure all doors open and close Don’t forget to take a look at the roof!
Make sure all doors open and close
Don’t forget to take a look at the roof!

By thoroughly inspecting the car, you will have a better idea of whether to buy or avoid the purchase. If you find the AC is not working, you know this need to be repaired. Note any other items that are not working and use them to negotiate on the asking price (see below). If you find any unusual problems such as overheating or engine noise, check with a mechanic before you purchase.

If the car passes your inspection list, you are ready to purchase!

Making the purchase

After you have inspected the car, you will know whether or not you will buy it. Use your inspection report to negotiate on the seller's asking price.

If you decide to buy the car, consider having your trusted mechanic look at the car. With a mechanic recommending you to buy a car, you have a good reason to feel confident that the car is not riddled with problems.

The mechanic can also give you a good estimate on repairs needed immediately or in the near future. Consider the repairs costs to negotiate on the purchase price. So if the seller's asking price is #3200 and your mechanic says the car needs $400 in repairs, you should detect some or all of the repair costs from the asking price. Keep in mind if the seller's asking price is already reduced substantially to $3200 (perhaps the seller does not know if it costs $500 or $1000 to fix the car), the seller may not agree to reducing it further. In any case, if the seller does not agree to a lower price, at least you will know what repairs are needed by going to a mechanic.

A quick tip

Remember to check the current book value of the car. You can do so for free by going to or to get a second opinion on the purchase price. Obviously, if you are paying more than the book value (retail or consumer/private party), you want to avoid the deal.

Once you and the seller have agreed on a price, you need to decide how you will pay for your car. Needless to say the seller would prefer to sell the car as quickly as possible and this may not happen if you don’t have your financing in order. So make sure your money is ready or will be ready before someone else takes the car. In some cases, a seller can accept a deposit to hold the car for you for a certain period of time. For instance, for $100 the seller may give you two days to come up with the rest of the money. If you bring the rest of the money as you promise, the seller will sell you the car otherwise, you may loose your deposit. If you make deposit, make sure you get a receipt and be sure that the seller and you agree to the exact terms of the deposit.

If this is a cash transaction, get a bill of sale. A bill of sale will establish that you have bought the car and the seller has sold the car for a certain purchase price. When registering the car, a bill of sale may reduce your taxes if the purchase price is less than the market value of the car. So if you purchase the car for $4000 and the car is really worth $5200, it makes sense to get a bill of sale so you don’t pay taxes on $5200 when you paid only $4000.

Besides the bill of sale, review and take all the necessary documents related to the purchase from the seller before you pay for the purchase. If the title is delayed for some reason (i.e., the car has a lien that is not cleared until it is paid, which may not happen until you pay the seller), don’t pay in advance because the seller may not give you the car. To minimize the risk in these situations, it is best to have the title in your hand before you pay any money. Look at the title to make sure it matches the VIN number on the car and the title is not for salvaged cars.

Posted on 4/29/2008
by Raj Singh