Buying a Car from a Private Seller

Buying a Car from a Private Seller

It’s no secret – buying a car from a private seller is one of the best ways to get the lowest prices for a used car. A private seller typically is not a business or anyone operating from a business – they are individuals just like you and me. You’re almost guaranteed to need cash to make these purchases unless you can get approved from a bank or credit union to finance the purchase. There are no “guaranteed auto financing” tricks here.
But, is it worth it? Teen Finance Tips will give you the information you need to make that decision yourself. Buying a car for the first time is a big step into adulthood or in anyone’s life for that matter. Get educated before you get stuck with a lemon. Learn how to buy a car from a private seller from the experts at Teen Finance Tips.

Advantages to Buying a Car From a Private Seller

Usually you’ll consider buying a car from a private seller to avoid all those pesky fees, to get a better deal on car, or even because the used car dealerships near you just don’t have exactly what you want. There are quite a few advantages to buying a car from a private seller, but keep in mind for every advantage there is usually a disadvantage you need to consider as well.
The advantages of buying a car from a private seller are:

  • Price: It’s simple – the lower price of the car. This is typically what attracts most people to this kind of purchase. Most used car buyers with decent to good credit are very conscious of their money and budgets. If you’re not savvy with your budget, learn how to budget so you can put yourself in a stronger position to buy a used car.
  • Less Fees: You never have to pay a “dealer fee” or “documentation fees” that most dealers charge. They like to hide it or tack it on at the end after you’ve already agreed to buy the car. This is a trick all of them do, don’t let them lie and they don’t, to add anywhere from $500 to $1,000 onto the price of the car. Since a private party is not a dealer they have no overhead cost and no reason to upcharge the sale.
  • Even Ground: You won’t be getting a sales pitch. Most of these people selling cars are not typically out to cheat you on your money and often have little to no negotiating experience. This actually gives you the advantage to barter the price of the car lower so you can get an even better deal.
  • Time: This is one thing that most people overlook. When you’re buying a car from a private seller you have as much time as you need to get the car. When you go to purchase with a dealer their job is to get you in the car and make the sale. They will hound you, harass you, and pester you until you agree to the sale. They are usually pretty good at seeing if a car buyer is interested or not.

See? There are a few good advantages to buying a used car from a private seller. Are you sold on that flashy car down the road yet? Don’t rush to buy it. Just like we showed you the advantages, there are disadvantages as well. Remember when we said there are usually at least as many disadvantages to advantages? Well, we’re not wrong.

Disadvantages to Buying a Car From a Private Seller

When you purchase a used car through a dealer you have quite a few safety nets that come with the usually higher price of the vehicle. These come in the way of warranties, in-house financing, lemon law protections, and so on. Buying a car is a big major purchase and one that you can be stuck paying for, for years – at least 5 on a “normal” auto loan. It’s best to understand what disadvantages you have when buying a car from a private seller.
The disadvantages of buying a car from a private seller are:

  • Harder to Find Financing: Most, if not all, used cars sales with a private seller are with cash upfront. You normally don’t see a lot of people financing a loan for a car from a private seller. These cars typically are only a few thousand, if they are higher you’ll want to inquire with the seller to make sure you’re not taking over their loan.
  • No “Right to Cancel”: In many states a used car buyer has the right to cancel a sale within a few days of the purchase. This allows them to actually drive the car home, to the grocery store, to work, and so on to “test” out the car. It’s not meant to be a test but really it’s your few day look into how the car works. With a private seller they are all sold as-is and that can really hurt you if you don’t have a mechanic look into it.
  • No Lemon Law Protections: A lemon law is designed to protect used car buyers from buying a defective, or broken, used car. This is a common law that most used car buyers do not know of and it’s hidden quite a bit by scummy dealers. Your purchase is not protected by these laws if you buy from a private seller.
  • Usually Need Repairs: These cars are usually not the “gold standard” when it comes to used cars. Many will need repairs at the time of purchase or rather soon after. We highly suggest you bring your own mechanic and DO NOT trust the mechanic of the private seller – they may even be bought off to provide you with an inaccurate report.
  • Need a Higher Credit Score: This one dovetails with the “harder to find financing” disadvantage. Due to the nature of not being able to take advantage of in-house financing with a dealer you will need a pretty good credit score, usually 620+. If you’re not sure how to improve your credit there are many tips and tricks that you can do to improve or build your credit to improve approval odds.

There are probably even more disadvantages of buying a used car from a private seller, however, these are the most “glaring” and ones you need to be aware of. When you buy a car from a private seller you’re taking a big risk in trusting that the seller is not misleading you. If your money is already tight and don’t have to worry about credit  – buying a cheaper used car from a private seller can be beneficial.

The Dos and Don’ts of Buying a Car from a Private Seller

To put things simply, here is a car buying checklist for buying a car from a private seller:

  • You should review the “fair market value” of the used car from research sites like: Kelley Blue Book, True Car, The Car Connection, and others.
  • Verify the mileage of the car.
  • Make sure to grab any service records from the seller.
  • Check the vehicle registration and verify all of the owner’s information lines up.
  • Try to only deal with sellers local to you and stay far away from out of state purchases.
  • Make sure you grab the VIN on the car and make sure it matches all paperwork, don’t forget to run a VIN check for history records.
  • If possible, verify if any warranties are still on the car.
  • Make sure you take someone with you for safety or their car knowledge so they can provide feedback or protection.
  • Make sure you fully review the car, inside and out. A quick tip is to look at the underside of the car for any body rust.
  • Make sure you take the car for a test drive and hear it run, listen for “weird” noises.
  • Ask as many questions as you can to make you feel comfortable like:
    • Why are you selling the car?
    • Has it been in an accident?
    • Any parts swapped out?
    • Are you the only owner?


  • Do not rely on the seller’s mechanic or “word” that the car is in great condition.
  • Do not show up with the cash in hand and use a check or money order if possible for electronic trail.
  • Do not let the seller pressure you or try to rush you into judgement.
  • Do not give them any money until you have the signed title and keys in your hand.
  • Do not buy any car with an out of state title without due diligence.
  • Do not buy a car from a seller who’s name is not on the title of the car.
  • Do not buy a car with a salvage title.
  • Do not buy a car from the south if you’re up north, they have a bad habit of sending flood damage cars to the north to sell at “fair market value” even though it’s damaged.

Private Car Sale Paperwork

The most tedious part of any car sale, whether you’re at a dealer or private seller, is the paperwork involved. The perks of going through a dealership is that they handle all of the paperwork for you. To make sure the car is fully in your name you’ll need the following documents: the car title, the bill of sale, and in some states emission documents.
The car title tells the state, and others, who the true owner of the car is. If the private seller still has a lien on the car (a loan) it is an immediate red flag and you should be wary. Technically, by law, the seller has no right to sell you the car because it is the property of the finance company they purchased through, not them. The finance company can take it back from you at any moment until the loan is fully repaid.
Be cautious for titles that are salvaged, rebuilt, or a factory buyback. These are all indicators that the car has had “issues” at some point or has been rebuilt after a total loss. If the seller doesn’t have the title then don’t buy the car. They will need to apply for a duplicate title before you even consider buying the car. When you purchase the vehicle you’ll need the seller to sign and date it along with your signature. If there are multiple names on the title make sure you get their names too. A seller cannot sell the car without all parties knowing the car is being sold. If they refuse or are unavailable to sign then don’t buy the car.
The bill of sale will identify the specifics of the car like year, make, model, VIN, price, date, and so on. This is important as it will verify the purchase, by you, of the car with all the necessary information the state will need to process.
The emissions documents, not required in every state, will check for smog and bad emissions from your vehicle. The private seller should already have this documentation on hand when they sell the car, if the state requires it. In some states they require the seller to have these tests done within a certain time frame before they can sell the car.

Don’t Let a Private Seller Cheat You

As you can see, buying a car can be a stressful process with all of these things to keep track of, paperwork to do, and just the scare of being cheated on your hard earned money. It’s all part of life. You should now know enough to make an educated decision for how you can buy a car from a private seller. Just keep in mind our private seller used car checklist along with the advantages and disadvantages and you should be all set.