How to buy a car from a private party - UPDATE

[Evergreen State Sue]

We think we found a good used car.  We were just walking by a church parking lot and saw the For Sale sign.  As we were peeking in the car, a man walked up to talk to us about it.  He is selling it for a friend.  We took a test drive and have made arrangements to have it looked at by a mechanic tomorrow.  We checked the VIN and the report is clean - one owner, no accidents.  We sort of made an agreement on the price, but according to Kelley Blue Book, that price is about $600 more than Blue Book.  I thought maybe if the car checks out we can split the difference and pay $300 less that we originally said we would.  Is that reasonable?

 

How do you pay a private party?  We are talking about $4,000-$5,000.  Do I just take out cash?  In what denominations?  Is there a safer way for both parties?  We don't know the owner's name now, and I wanted to get to the bank and be prepared.  I would think cash would be preferred and helpful in the final negotiations.  We've never bought a car through a private party so any advice would be appreciated.  Thanks.

 

UPDATE:  Thanks for all of your suggestions.  The transaction went smoothly.  The sellers accepted $300 less than our original agreement, and were glad we had cash.  We made the transaction in our local police department's parking lot. So far, we're very happy with the car and the deal.  :hurray:

[Joyofsixreboot]

Agree on price. Have them sign title. Make sure they HAVE the title. Plate and insure your car. We only buy private party. No problems. I have found you can dicker them down on price if you have cash! Ex. If they are asking $5000 I say " I have cash if you'll take $4000 today." They counter offer etc and we usually meet abou $4350. I only do this if I'm perfectly willing to walk away.

[gardenmom5]

we've usually done cash - in $100 denominations. (there is a limit to how much you can get from an ATM.)

one we met with to look at the car, drive it, agreed upon price - and got a cashier's check from our well-known local credit union.  we gave him that the next day when we picked up the car.  we took it to our mechanic afterwards.  (great condition.)

 

 you can talk to the seller about changing the price this late in the game - but be prepared for him to say "no" and walk unless you pay the agreed upon price.

 

- after looking at this last car, we could see what a great deal it was.  (I checked out the used price - dealer and private -  from a couple sources before we saw it).  we would have gladly paid his asking price.  (he was lower than a dealer would have charged, but much higher than a dealer would have given him as a trade-in)  BUT - we asked him, how much did he want for it?  his response was below the posted price.  (we figure he was expecting to negotiate and padded the number)   Done.

 

as has been said, make sure they have the title, and their name is on it. and they sign it.  you then go to the DMV to transfer title.

 

we always have an idea of how much we are willing to pay for a car before we ever go see it.  

[plansrme]

I have sold cars privately, and buyers have always produced cash.  I write up a two- or three-sentence bill of sale, with copies for both of us, and sign over title in the buyer's presence.

 

As for the price being over KBB's price, I don't know where KBB and Edmunds get their prices, but they've never been particularly accurate for my neck of the woods.  I have both bought and sold new and used cars for a good bit more than their reports say I should.  I've had people offer book value for my cars and have turned them down to sell the car for my asking price.  My cars have always sold within a weekend, so it's not like I'm hanging onto them for months.  

[Annie G]

Our credit union lets members use one of their small offices to handle these transactions. That way members can get their money and not have to leave the building with it. Or if they're the selling party, it's still nice to be able to deposit the cashier's check or cash without having to be out. 

 

 

[PrincessMommy]

We also like to have our mechanic look it over before buying, if possible.  Some people don't want to do it and it is an extra hassle, but it does help a bit. 

 

Also, for the title - make sure it doesn't have a lien on it.  There should be some kind of box the indicate if there's a loan and who the loan is to (bank usually)... it should say "no lien" in the box...otherwise they cannot sell the car.

 

 

[zoobie]

Selling for a friend? That could be a red flag,

 

We have only sold cars, but we met in a bank lot (which was right next to a police department outpost). This was several years ago. Our local police departments are encouraging people to use them as meeting places for craigslist and other private sales after a several armed robberies and murders. I would have a mechanic check it out before buying.

[gardenmom5]

We also like to have our mechanic look it over before buying, if possible.  Some people don't want to do it and it is an extra hassle, but it does help a bit. 

 

Also, for the title - make sure it doesn't have a lien on it.  There should be some kind of box the indicate if there's a loan and who the loan is to (bank usually)... it should say "no lien" in the box...otherwise they cannot sell the car.

 

 

also

make sure it is a clean title. 

I'm finding cars out there that have been declared totaled by an insurance company.  (a car being totaled is because it would cost more to fix than it is worth.  sometimes it's just body damage, but mechanics are sound. but you need to know that.)

[milovany]

In Washington, Sue, once the sale is done, you have to report the purchase at a DOL office and pay the sales tax there (so be ready for that extra chunk of change in addition to the sales price).  You have something like 10-14 days after the purchase to do this.  They will also get you new plates and tabs if needed (which you also pay for right then). Oh, and as I recall, there's one form the seller has to sign that has to be notarized IF the car is older (or is it newer?) than a certain year (and I apologize, but I can't remember the details; you can check the DOL website).  We just went through this process in Washington last October. 

 

ETA - I found the relevant link at the DOL website for you, here. 

[Evergreen State Sue]

Very helpful, everyone.  Thank you!

[Liz CA]

Cashier's check is another option if you do not want to carry cash, however, at this point you will have needed to agree on the price and have it checked out by a mechanic prior to purchase. This type of check is as good as cash for the seller since the amount on it is guaranteed by the bank.

 

We are looking for another car right now because we did not have the car checked prior to purchase. It was an out of town transaction - we were busy, weekend, no mechanic nearby - and we regretted it almost immediately.

 

Unless you or dh are mechanics, definitely run it through a pre-purchase check.

[milovany]

Sue, I should have mentioned .... if you haven't already had the vehicle checked out, Firestone offers an inspection for this type of thing (purchasing a car) for about $10.  It's a great deal and was very thorough.  We got ours done in Covington last October; they have many locations in Washington. 

[redsquirrel]

I have always bought cars privately from individuals and it has always been a really good experience. If I got a weird vibe or someone wasn't nice etc then I just didn't pursue the deal any further. No big deal.  I always take the car to be checked by my mechanic and I am very open about that. I have a great mechanic and I ask if they think it is a fair price. They have always been very good about giving me a thumbs up or down. 

 

I pay cash or with a cashier's check, they sign it over, I take the paperwork to the DMV, (somewhere in there I call my insurance agent, lol), I give the paperwork to the DMV, they give me new plates, I go back to the person with the car and I put the plates on the car and I drive away in my new car.

 

The only time I have been flat out lied to and someone tried to cheat me was the one time we bought a new car. That was a terrible experience and I will never do it again. I told dh from now on it is used cars from nice people only. The BEST car I bought was being sold in a church parking lot, lol. She was the church organist and parked the car in the lot with a for sale sign. I loved that car. The people I bought my first mini-van from gave us toys for my kids. They were getting rid of the mini-van because their kids were getting older and one had gone to college. When I got the van they had put some nice toys and books inside for us. I know, they were just as happy to get rid of them, but it wasn't junk, it was some nice things.

 

Twice I got weird pushy car sellers, one was def sketchy and I backed off right away. He wanted me to make a decision really quickly, and didn't want me to take it to a mechanic. Yeah, right, lol. The second was trying to sell me his daughters college car (he bought it new for her and now wanted to sell it). He refused to believe that my mechanic found so  much wrong with the car that fixing it was more than he was trying to sell it for! He kept telling me he would come down in price...um, no. A car in need of  5,000$ in repairs is not going to sell for 3,000$ and you can't argue me into buying your car! But both were easily handled with a polite "No, I am not interested in the car any longer, goodbye."

[clementine]

Clean title is a MUST.  Also, research for your state - in our state the license plates stay with the car, but in other states the current owner must remove them.  Have them write up a bill of sale & each of you get a copy.  

[MarinesWife]

We did recently. We took it to our mechanic with the owner. Once our mechanic gave us the okay we exchanged money for title and proof of recent smog (law in Ca). We didn't hand over the money until we had the title filled out and in hand. We gave him money, he handed us the keys. Appointment time at DMVs around here is ridiculous so we used a service to take care of registration.

[pehp]

We pay by cashier's check, make sure the title is clean, take it to the mechanic for a once-over, run the VIN to check for any accidents it has been in and meet at the Dept of Motor Vehicles to finalize the transaction.  HTH!