How to Buy a Car From a Private Seller

Buying a car from a private seller can stretch your money further, because private sellers often have more room to negotiate than a dealership does. You will need to do more of the work yourself, though: checking the car, the paperwork and the title before you hand over any money. The exact steps and fees depend on your state, so confirm the details with your state motor vehicle agency before you buy.

• The vehicle's title (sometimes called a pink slip), signed by the seller
• A Bill of Sale signed by both buyer and seller, if the seller is not the person named on the title
• A record of the odometer mileage, if the vehicle is less than 10 years old
• A vehicle history report, which you can buy from services such as Carfax, AutoCheck or instaVIN
• A mechanic's inspection, which may cost roughly $100 to $200
• Cash or a money order from your bank, or an approved auto loan
• Money for sales tax, title and registration fees

1. Set a budget before you shop, and work out whether you will pay cash or need a loan. Not every lender offers loans for private seller purchases, so ask before you get serious about a car.
2. Shop listings on sites such as Autotrader, Marketplace or Craigslist, and compare asking prices for similar makes and models using Kelley Blue Book or Edmunds. A price that looks far too low may be a warning sign.
3. Contact the seller and ask how they used the car, why they are selling, and whether it has been in any accidents. Ask to see the service history for routine maintenance and repairs.
4. Ask for the vehicle identification number (VIN) or licence plate number and run a vehicle history report. Check it for accident history, damage, open recalls, title history, lien history and service history, and compare it with what the seller told you.
5. Check the National Highway Traffic Safety Administration for any recalls the owner has not fixed.
6. Arrange to meet the seller in a public place during daylight, and take another person with you if you can.
7. Look over the car yourself, checking the lights, heat, air conditioning, windows, locks and signals. Check the doors and ignition locks for tampering, and look for signs of break-ins such as tool marks or chipped glass.
8. Check for an etched VIN on the windows, and make sure those numbers match the VIN on the title.
9. Take a test drive, including some time at highway speed. Listen for strange noises, test the steering, notice how the suspension handles bumps, and test the brakes. The seller may want to ride with you.
10. Ask to have the car inspected by a mechanic you choose. You may agree to buy on condition that repairs are done, or ask for a lower price based on the work needed.
11. Verify the seller's identity against the title. Ask to see their driver's licence or ID card and check that the name matches the name on the title, and that the title, registration and seller's ID all agree.
12. Inspect the title itself. Look for alterations such as erasures, white-outs, scrawl marks or damage, because any change can void the title. Check that the VIN on the title matches the VIN on the car, and that the mileage on the title is not higher than the reading on the odometer.
13. Check with your state motor vehicle agency for liens on the vehicle. If there is a lien, ask the seller for a lien release from the lender.
14. Confirm you have the latest title document issued for the car. If the owner ordered a duplicate title, the original is no longer valid.
15. Run the VIN through the National Insurance Crime Bureau's VINCheck to make sure the car has not been reported stolen and has not been in a flood.
16. Negotiate the price, then draw up a Bill of Sale recording the transaction and the purchase price. This matters especially if you pay in cash, and it can stop you being taxed on the full market value rather than what you actually paid.
17. Pay the seller and have them sign the title over to you the same day. If the seller still owes a lender, you may need to go to the lender with your payment and have them sign over the title.
18. Register the title in your name at your state motor vehicle agency. In California, buyers have 10 days after the purchase to transfer ownership, and sellers have 5 days to report the transfer. In Florida, you must apply within 30 calendar days to avoid a late transfer penalty fee. Check your own state's deadline.

• Private sales do not come with the protections you get from a licensed dealer. There is no Lemon Law for used cars in Florida, and private sales generally are not regulated the way dealerships are, so if something goes wrong you may have no recourse.
• A private seller cannot guarantee the purchase, and payment services such as PayPal or Venmo do not guarantee used car sales either. If you need a guarantee, buy through a dealership.
• Watch for title washing, where a vehicle with a salvage title from a flood, fire or collision is rebuilt and re-registered in another state to hide the salvage marking.
• Watch for fake escrow scams, where you are asked to place money in an escrow account and the seller promises to ship the car. You may never receive the car, or receive a badly damaged one.
• The best protection against scams is to buy only from people you can meet in person, and to pay by cash or a money order from your bank.
• The purchase price does not include sales tax, tag or title fees. Expect to pay those when you transfer ownership.
• In Florida, licence plates stay with the seller, not the vehicle, and the seller must remove the plate when the car is sold.
• If you borrowed money to buy the car, the title will be issued showing a lien. Once the loan is paid off, the lien holder must mark the lien satisfied and send a Satisfaction of Lien to the department.
• If you are buying the car for a company, an officer signs their own name, adds their official title, and prints the company name where the buyer's name goes.
• Sign the title with a pen you know will not run out. If the ink does run out, do not retrace the signature, because that can void the title. Start a new signature next to it without overlapping, or ask the DMV representative whether you need to sign again.

Do I need a Bill of Sale? It is a good idea to draw one up as a record of the transaction, particularly when you pay in cash. If the seller is not the person named on the title, you will need a Bill of Sale signed by both the seller and the person whose name appears on the title.

How do I check for liens on the car? Do not rely only on the lien information printed on the title, because liens can be listed that no longer exist, and active liens may not be listed at all. If there is a lien, ask the seller for a lien release.

What if the odometer reading does not match the title? The mileage on the title should be less than, or the same as, the reading on the car's odometer. If the title shows more miles than the odometer, that suggests the odometer may have been rolled back, so treat it as a warning sign.

Can I get a loan to buy from a private seller? Yes, you can get a car loan for a private seller purchase just as you would for a dealership purchase, but not all lenders offer them. Ask your lender or credit union before you start shopping.

What happens if the seller does not have the title? If the title has been lost, stolen or damaged, the seller can complete an application for a replacement or transfer of title. If the seller does not have a valid title, check with your local motor vehicle service centre for instructions before you pay anything.