We’ve shared our tips for buying a used car, but we never discussed all of the risks involved with buying a used car from a private seller.
While it’s possible to get a great deal from a private seller, unfortunately it’s a rare event. As with many high-reward circumstances, it also involves a lot of risk.
Private Seller vs. Dealership
The first major decision you need to make when selecting and purchasing a new used vehicle is whether you will be buying from a private seller or a dealership. A private seller is an individual looking to sell their vehicle to another individual for the maximum value they could get. A dealership buys and sells hundreds or thousands of cars every year and must follow all state and federal rules and regulations.
While doing business with a dealer such as Auto Simple is the safest and easiest way to purchase a used car, buying from a private seller can save you money (if you’re lucky). But be aware of the potential risks before you invest the time and energy into buying from a private seller.
Private Seller Risks
Although there are some good advantages, such as potentially better deals, there are many reasons why you might want to avoid private sellers entirely.
- Lack of Consumer Protection – The state and federal laws and regulations that apply to dealerships aren’t applicable when buying from a private seller. When you buy a car from a private seller, you are buying it “as is,” which means that any problems with the car are now your problems. Private sellers aren’t covered by the FTC’s Used Car Rule, which means they don’t have to post a Buyers Guide the way dealers do. You also won’t get any warranties on the vehicle, unless the manufacturer’s warranty is still in effect and you successfully transfer ownership. This is something to consider, since you will have to contact the appropriate division of the manufacturing company to update their records.
- More Footwork – As the old proverb goes, “Time is money.” Consider all of the time you will spend on Craigslist and other websites, researching the cars, contacting the owners, ordering vehicle reports, discussing meeting times, finding transportation, scheduling inspections, and transferring all of the paperwork. Unless you get really lucky, you will find this process extremely frustrating and time-consuming.
- More Paperwork – Both you and the seller are responsible for all the paperwork. This means transferring the title and/or bill of sale, registration, and any related fees and taxes. Often, you will need to make the trip to your local Department of Motor Vehicles (DMV). And we all know how fun that can be.
- Vehicle History Reports and Inspections – Many times, a private seller will not have a vehicle history report to show you and might refuse to pay for one. This means you will have to spend the money to get a vehicle history report on CARFAX or a similar website by looking up the Vehicle Identification Number (VIN). Even if they have a CARFAX or similar report, it’s highly recommended that you conduct your own vehicle inspection, which will set you back around $100.
- Worse Negotiations – Sometimes negotiations are easier, sometimes they’re harder. It really depends on who you are working with. Be aware of dealers who pose as private sellers and use suspect tactics to close the deal. This happens a lot on Craigslist. Never trust a dealer disguising themselves as a private seller. They are obviously trying to deceive you, regardless of if they have good or bad intentions. If you have any strange suspicions, it’s best to walk away before you get in too deep.
Finally, beware of cars that are being sold for an extremely low price. As the saying goes, “If it’s too good to be true, then it probably is.” Sometimes the car being offered is a lemon or a fraud. There may be things that are wrong with the car and the owner just wants to get rid of it.
How to Buy a Used Car from a Private Seller
If you do decide to buy from a private seller, keep in mind all of the extra work involved. Since private sellers are not subject to the same strict laws and regulations that dealerships are, the risk of fraudulent practices significantly rises.
Here are some things you should do to ensure you’re dealing with a trustworthy seller:
- Right off the bat, ask them if they are the owner. You want to get this out of the way and the best way to do so is by asking. Ask a little bit about their time with the car, how long they’ve owned the vehicle, where they purchased it from, etc. This is where you should be able to catch any tell-tale signs, such as “selling for a friend” or “just bought it recently.”
- Ask the owner about vehicle history. Don’t be afraid to call and ask about the car. If they are car flipping, they probably won’t have maintenance records. If they say they have no records, ask them where they get their maintenance and repairs done and then call the business and ask for them. Here, you will also be able to tell if the name of the person you are speaking with matches the name on the records. If they don’t know details about the car off the top of their head, you may be dealing with a disguised trader.
- Look up the phone number of the person you are speaking with. If the number comes back as a pay-as-you-go phone or in relation to other vehicle sales, walk away.
- Double-check the address. Be wary of anyone wishing to meet in a place other than their home. You want to make sure that the seller’s address matches the address on the car title and registration. If they have a reason for not meeting at home, consider driving by to make sure it is a real address.
- Test-drive the car on the street and highway. You will want to heighten you senses while test-driving the car. Pay close attention to any sounds, sights, smells, or feelings you have while driving, turning, and braking on both street and highway. Test all of the electrical controls: windows, radio, locking system, etc. Make sure all of the lights work and that the vehicle drives and brakes straight. This should only take about ten or fifteen minutes.
- Get a car inspection. It is always a good idea to have the car inspected when buying from a private seller. It will cost around $100 for an inspection from an ASE-certified mechanic, but will save you from buying a potential lemon.
- If you have suspicions, walk away. You are under no obligation to buy the car. Ask a lot of questions. Use your gut instincts and listen when they are telling you that something is fishy. If you’ve been lied to once, you’ll probably get lied to again. If you don’t build trust, both with dealers and personal sellers, you may be in for a rude surprise.
If you are buying from a private seller, make sure the title and registration has been successfully transferred before handing over the money. It’s also a good idea to check if there are any past-due registration fees.
Phew, that’s a lot isn’t it? If you don’t have the time, energy, or personality for the private car buying process, we don’t blame you. Buying and selling at a dealership is A LOT easier and more secure.
Shop our online inventory and schedule a test drive on our private track. After all questions are answered and the paperwork is signed, you will receive the keys and copies of all the documents. It’s that easy.
In fact, you can leave the Auto Simple lot with a new pre-owned vehicle for as low as $500 down!
Auto Simple wants you to find a car you love at a price you can afford. We carry a large selection of hand-picked, Certified Pre-Owned vehicles, all of which come with a 6 month/6,000-mile powertrain warranty. We also own a private track for test driving!
With locations in Cleveland, Chattanooga, Dayton, and a new store in Dalton, GA, we make it easy to walk away with your dream car.
If you have any questions, don’t hesitate to speak with one of our Online Specialists or give us a call:
Chattanooga, TN – (423) 551-3600
Cleveland, TN – (423) 476-4600
Dayton, TN – (423) 775-4600
Dalton, GA – (706) 217-CARS (2277)