Going to the auto dealer isn’t the only way to buy a used car. Many car buyers purchase used vehicles from individuals, also known as private parties.

Keep in mind that buying a car from an individual is much different from shopping for one at a dealer. Consider these important factors.

The differences between a private party and a dealer

A private party is an individual who owns a car and is selling it. These sellers typically advertise the sale online, on sites such as Craigslist, on Auto Trader, or in local newspapers. There are a few key differences between individual sellers and auto dealers:

  • Because individual sellers don’t have to worry about overhead costs, the price of the vehicle may be lower than at a dealership.
  • Unlike dealers, private parties don’t offer warranties on the vehicle.
  • When buying from an individual, you must take responsibility for getting a car inspection, arranging for financing, and handling the title transfer.

What to know before you buy from a private party

Because you take on more responsibility when buying a used vehicle, carefully research the car make and model. You need to know about standard features, performance, and possible safety issues, including recalls, as well as comparable prices for used vehicles from other private-seller listings.

Once you find a listing for a car you like, contact the seller by phone or email and prepare a list of questions, such as:

  • What’s the condition of the vehicle?
  • What’s the mileage?
  • Has the car ever been in any accidents?
  • Why is the car being sold?
  • What features does the car have?

For safety reasons, consider meeting the seller in a public place and bringing someone with you to look at the vehicle. Test drive the car, and examine it carefully, including the engine, the interior, and the tires. If you’re serious about buying, a car inspection can be a good way to get a handle on the quality of the car.

Financing a car from a private party

Once you’ve decided on a private party car sale, determine how you’ll pay for it. Most individual sellers require cash or a cashier’s check. If you don’t have the cash or money in a checking account, used car loan options are available for private sales. It’s a good idea to arrange for financing in advance, so you’re ready to pay if you make an offer on the vehicle.

Transferring the title, liens, and other processing

When buying a car from a private party, you’ll need to take care of a few other details that an auto dealer typically handles. First, make sure there are no liens against the car; if there are, the seller must pay them. You can conduct a vehicle history report using a vehicle history service online, which will provide information on liens against the vehicle, accident history, and other information.

Once you’ve made the transaction, the seller will need to transfer the title to you. Require the seller to fill out a bill of sale, complete the title document, and submit it to the DMV. Keep in mind that states have different laws and processes. Check with your state’s Department of Motor Vehicles about the laws and processes in your state when buying a car.

Are you ready to purchase a car from a private party?

If you’re willing to do more of the research, inspections, and paperwork yourself, a private party sale might be a good option for you.

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