Buying a vehicle can be a stressful process. It can be even more stressful when you are buying a car from a private seller if you don’t know what you are doing or what to look out for. Here are some tips to use when you are buying a car from a private seller.
Why Would You Want to Buy a Car From a Private Seller
We’ve all been on Facebook Marketplace, Craigslist (whoa I’m old), or in the newspaper (this was my parent’s place, not mine) looking for a new vehicle.
It’s inevitable. Your car will break down, you will outgrow it, it will no longer fit your needs, etc. You will have to buy another vehicle at some point. In fact, on average, we buy a replacement car once every six years.
So why not just go to a dealership? After all, they have the prices posted (usually) and you know that you are getting a reliable vehicle (but not always).
You may want to consider buying from an individual private seller for a few reasons.
- There should be no extra fees incurred that a dealership would otherwise tack on.
- You will not have to wait for the vehicle to be delivered.
- You can have a wider variety of vehicles to choose from.
- Ones with really high mileage that a dealership wouldn’t sell.
- Vehicles with mechanical or cosmetic issues that a dealership wouldn’t want.
- Collectors’ vehicles or really old vehicles.
- Potentially more bargaining power with a private seller.
- Usually a lower price because a private seller doesn’t have the added business expenses that a dealership would have.
However, there are some major disadvantages to buying a car from a private seller.
- There will be no warranty.
- A mechanic would likely not have inspected it.
- It’s a really uncomfortable situation negotiating with someone about their own personal vehicle.
- They may not have the CARFAX report to go with the vehicle.
These are all the things that you should take into account when you are buying a car from a private seller.
Steps to Buying a Car From a Private Seller
Here are the steps that you will need to take if you purchase a vehicle from a private seller:
Step 0: Before anything else, you need to know your budget, the vehicle you are looking for, and the mileage that you want on that vehicle. DO THIS BEFORE YOU START SHOPPING!
Here is the list of the things that you need to know BEFORE you start shopping for a vehicle.
Step 1: Figure out how you are going to pay for it.
If you are going to pay cash for it, that is easy enough. Just get the cash. But if you are going to need to finance the vehicle, go to your local bank or credit union and have them start a credit application for you. It’s okay if you don’t know the specific vehicle at this time. The bank or credit union will give you guidelines on what they will approve (max mileage, max price, oldest model year, etc.)
If you are unsure of how much to spend on a vehicle, here is a guide to help you out. 🙂
Step 2: Start shopping. Know how much you are willing to spend. Know what you are looking for. And never be afraid to walk away from the deal if it doesn’t work out in your favor.
Step 3: Purchase the car from the private seller.
You will hand them the money and they will give you a signed bill of sale (you can just print it out on the internet).
If they have the title then they will sign that over to you as well (in most states). If they have the title and there is no lien on the vehicle (meaning that they don’t owe any money on it), skip to Step 5.
Step 4: The seller of the vehicle will take the money to their bank and pay off any remainder of the vehicle and get the title. Once they get the title, they will sign it over to you and you can go about licensing it.
Step 5: You license the vehicle. This will vary in each state, county, and even city. Check with your local jurisdiction to see what documents you need and how to go about licensing your new car.
Step 6: Drive off into the sunset because you’re done!
Final Thoughts
Car shopping can be stressful. I get it. I have purchased several cars and each one has had it’s own stress attached to it.
But don’t fret too much. I am here for you! I’ll help to give you the tools that you need to be successful at all things personal finance related. 🙂
You can do this!
Until next time!
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