back to articles | January 25, 2023 | Moses Mwangi

Categories: Auto Loans & Financing Types of Car Loans

How to Buy a Used Car from a Private Party

What are the benefits of purchasing a used car from a private party? Buying a used vehicle in the private market allows you to get hard-to-find, discounted, and unique car models. It also ensures you have more car options than those found at a dealership.


What are the benefits of purchasing a used car from a private party? Buying a used vehicle in the private market allows you to get hard-to-find, discounted, and unique car models. It also ensures you have more car options than those found at a dealership.

However, the process of buying used vehicles from private sellers is not as straightforward as most people assume. You may need to apply some serious considerations and patience to find a great deal. Here is a simple guide that will help you effectively purchase a used car from a private party.

Necessary steps to purchasing a used car from a private seller

1. Make a list of necessary used car requirements first

It would help if you prepared what you need first before buying a used vehicle from a private seller. One thing that should top your list is your budget. Also, a list of the features you need the car to have and your state's requirements will help to ease the process.

The list will ensure that you can get to your targeted car faster. For instance, you can find that some states need you to have car insurance after a car purchase, while others need it before the purchase. Also, creating a budget will help you develop a targeted car search that will make work easier.

2. Conduct research on used vehicles for sale by private parties

The research that you should carry out should be on the vehicle and the seller. It will help you determine the trustworthiness of the seller and the usability of the car. Make sure you research and compare each vehicle:

  • Value
  • Vehicle description
  • Mileage

The comparison will help you narrow down the cars you should see in person. It will also help eliminate untrustworthy sellers in the private market.

3. Contact seller

Once you narrow down to the vehicles that meet your specifications, contact the seller. Make sure to ask the following:

  • Reason for selling
  • Parts of the vehicle that are not original
  • Whether you can access the service records
  • The previous owner of the car
  • Whether the seller has a car loan on the vehicle
  • Whether the seller has the car's title if there is no loan
  • Whether the vehicle has any warranty
  • The problems that the car has had
  • Verify the car's vehicle identification number, mileage, year, model, and make.

4. Get the history report of the car

If the seller provides you with the VIN, get the vehicle history report. You can purchase vehicle history report from AutoCheck or Carfax for less than $50. The report will give you a clear picture of the car's history, including

  • Lien information
  • Title History
  • Number of previous owners
  • Odometer's readings
  • An account of prior accident repairs

The history report will help you match the information provided by the seller and your findings. It will ensure that you can pinpoint any red flags. You can also use the VIN on the National Insurance Crime Bureau.

In the National Insurance Crime Bureau, you can find information on whether the car has a salvage title. A salvage title means an insurance company deems the vehicle to be a total loss. At the bureau, you can also find information on whether there is a report of the car ever being stolen.

5. Conduct a test drive

A test drive on a used car will help you to get an overall feel of the suspension, brakes, transmission, and engine. Pay attention to any noises, operational issues, and the driving system. Also, inform someone where you will conduct the test drive for safety purposes.

After the test drive, you can ask the seller whether a mechanic can inspect the car. The inspection will help determine whether the vehicle has a clean bill of health and whether you should make an offer.

6. Have your trusted mechanic inspect the car

A thorough examination of the car's mechanicals, interior, and exterior is vital when purchasing a used car. You can ask a trusted mechanic to examine whether the vehicle is in excellent working condition.

The mechanic will help you establish whether there is a need for any repairs. You can ask them to check the following:

  • Suspension
  • Frame
  • Tires
  • Glass
  • Radiator
  • Brakes
  • Lights
  • Fluids
  • Belts
  • Hoses
  • Computerized engine evaluation
  • Filters
  • Exterior surface
  • Body condition
  • Battery
  • Wipers

7. Negotiate a fair price

Once you find a car that meets all your needs, proceed to get a fair price. One main benefit of buying a car from private sellers than dealerships is that they allow room for negotiations. If you negotiate well, you will have a chance to reduce the asking price. Also, consult with your mechanic to see whether there is a chance of reducing the overall cost.

8. Complete the sale

Once you reach a fair price, you can complete the sale. Some of the things that you will need include:

  • Bill of sales: The bill of sales should contain every sale detail, including the seller's contacts and the mileage and price of the car. It should have all terms of sale and the date of sale.
  • Collect the car's title: The title will help prove the seller's legal vehicle ownership. Use the seller's ID to confirm whether all the information matches.

Pay for the car

If the documents are correct and you agree with the terms of the sale, proceed to make payments. You can either pay cash or source a loan. A personal or private-party auto loan can help you finance the purchase if you cannot afford to pay cash.

A private-party auto loan will require you to use the car as collateral, while a personal loan will not need any security. The unsecured personal loan will be more expensive than the private-party auto loan because it is riskier. Thus, the private-party auto loan will give you a better way to finance a car purchase from a private seller.

10. Take ownership of the car

You will need to meet with the seller at the DMV to transfer the vehicle's ownership. Ensure that you have all the documents required by your state. The documents may include insurance proof. Also, ensure that the seller has all the necessary documents. This final step will ensure that any paperwork for title and registration is complete.

Final thoughts

Buying a used vehicle from a private seller will accrue several benefits, including a lower price than a dealership. However, the process of purchase will need you to conduct due diligence. The research will ensure you buy a car from a trusted source and one that will meet your requirements.