You’ve decided to ditch the dealership and try buying a car from a private seller. This is a great way to get more car for your money (dealerships buy low and sell high).
We’ll teach you how to buy a car in a private sale, safely, securely, and fast.
You’ve set your budget and done your research; now it’s time to go shopping. Most people shop online, and for good reason: it’s where most vehicles are listed.
Most private sellers post their vehicles on online listing sites. Search cars for sale on one or more of the following platforms, using their built-in filtering functions to narrow vehicles by location, make, model, year, price, or other factors important to you.
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Facebook Marketplace |
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Craigslist |
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eBay Motors |
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PrivateAuto |
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Cars.com |
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CarGurus |
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Bring a Trailer |
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Hemmings |
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Cars and Bids |
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Local online classifieds |
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*PrivateAuto is a sister company to DealNow and is powered by DealNow’s transactional technology.
Pro tip: Set alerts on multiple platforms to receive notifications when new listings matching your criteria are posted.
Depending on your location and which platforms you choose to search on, you may find yourself with a ton of listings matching your criteria. Whether you end up with many listings or just a few to sort through, protect yourself with in-depth due diligence. Here are some best practices that will serve you well.
Because most scammers operate under an alias, you’re trying to determine whether you’re dealing with a person’s actual identity or a catfisher. Look at the seller’s profile.
If a platform provides seller identity verification (PrivateAuto does), check whether they’re verified. If a platform allows seller reviews or feedback, look at whether they’ve received any positive feedback.
On a social media platform such as Facebook Marketplace, look at their social media history and whether you have common friends.
Look out for the following red flags:
For ultimate protection, invite the seller to close the transaction on DealNow. Our identity verification and optional title check will deter scammers.
The listing should include specifics about the car’s condition, history, and features. Honest sellers disclose flaws and provide a detailed maintenance history. Look out for vague descriptions and excessive capitalization or exclamation points.
Listing photos should include the exterior (all sides), interior, engine bay, and any damage. High-quality photos convey professionalism and a real desire to sell. Look out for listings that use stock images or contain few, low-quality images.
Compare prices to Kelley Blue Book, NADA guides, and similar local listings. Look for listings that align with market value. Vehicles priced significantly below market value are often scams or have serious undisclosed problems.
A vehicle history report is so worth it when buying from a stranger. It covers maintenance history, accident history, ownership history, service records, and more. Ask the seller for the vehicle’s VIN (some sites make the VIN visible in the listing), and use providers such as Carfax and AutoCheck to run a report.
If you’re shopping on PrivateAuto, you can order an AutoCheck report from your dashboard in the PrivateAuto app. DealNow also includes an optional vehicle history report as part of our transactional workflow.
When you’ve narrowed your focus down to a car (or two, or three), you may want to reach out to the seller. Doing so can help you get a better sense of the seller’s legitimacy (many scammers are cagey and evasive) and give you more confidence to move on to the next step.
Different platforms provide different means of contact between buyers and sellers. For example, Facebook Marketplace shoppers use Facebook Messenger to communicate; Craigslist allows you to email a seller through the platform. On many platforms, sellers include their phone numbers and encourage you to call them.
For your safety, it’s best to use platforms that offer in-app messaging (PrivateAuto being one of them) so your details aren’t revealed to scammers.
When you contact the seller, you may want to ask them some questions to learn more. Here are some good ones to get you started:
Trustworthy sellers should be happy to confirm details from the listing, provide clear answers to your questions, disclose flaws, review maintenance records, and agree to pre-purchase inspections.
Avoid sellers who provide vague answers, dodge questions, don’t know about the vehicle, and won’t agree to a professional inspection.
Once you’ve found a promising car and checked its history, it’s time for an in-person inspection.
When meeting a stranger to buy a car:
Worried about meetings with strangers? Not only does DealNow’s in-app messaging simplify setting up a test drive, but the seller is verified, so you know who you’re meeting. We also eliminate all the back-and-forth hassle with a simple scheduler: you select a time from the seller’s preset availability, and both of you get a notification that the test drive has been set.
Before the test drive, do a thorough visual inspection:
The car should generally look like it did in photographs. Note features that don’t work or cosmetic damage that wasn’t photographed or described.
During the test drive:
The car should meet expectations for its model year and mileage. If you’re looking for something cheap, you might need to be a bit forgiving, but all major systems should work as described.
Even if you’re mechanically savvy, a professional inspector will notice things you might miss. Their thorough inspection gives you peace of mind that you’re making the right choice (or helps you dodge a lemon). Never let the seller choose an inspector unless you’ve validated the company’s legitimacy. Some scammers will partner with a friend to trick you into buying a bad car.
When you bring your transaction onto DealNow, you can schedule a professional inspection from your dealroom with a couple of clicks. A Lemon Squad inspector will show up to your test drive. No multi-party coordination, no hassle.
If you’re happy with the car, the seller, and the price, it’s time to finish things up. Your vehicle closing starts with you and the seller signing a bill of sale. This document is required in 16 states—but you should complete one no matter where you live. To understand why it’s so important, we need to talk briefly about the catch-22 of trust between strangers.
Unless you’re buying a clunker, a used car purchase involves a sizable amount of money. Most likely, you’re buying from a stranger. Inherent in the situation is a catch-22: neither party wants to make the first move and be taken advantage of.
Both parties want to protect themselves from fraud. It’s a standoff.
A bill of sale creates a legally binding document, signed and countersigned by both parties. Should either party try any funny business, the counterparty would prevail in a court of law. This creates a basis of security by which the buyer (you) feels comfortable sending payment to the seller.
You could print two copies of the official bill of sale for your state, bring them to the closing, and then you and the seller sign and countersign both copies. You each take one home for your records.
In the unlikely event you’re dealing with a truly malevolent seller, a paper bill of sale is flimsy. Conceivably, the seller could get your money, then confiscate both copies of the bill of sale and hightail it out of there. You’re left with no funds, no car, and no legal recourse.
Here’s another reason not to do a paper bill of sale: a scammer may use an alias, and may even have a false ID to back it up. All legal protections evaporate if you don’t have the person’s legal name and signature on the document.
DealNow makes the bill of sale easy and secure. Each of you (buyer and seller) electronically signs the bill of sale in our mobile app. You and the seller will each get a notification that the other has signed, and you’ll each retain a copy in your DealNow dashboard.
Because DealNow verifies the seller’s identity, you know you have their legal name and signature on the document. If you’ve included our optional title check service (one-click order from your DealNow dashboard), you’ve already cross-referenced with DMV records to ensure you’re dealing with the legal owner of the vehicle. And, you’ve verified that the title is clean. It’s the most ironclad way to do a private-party purchase.
Beyond overcoming the catch-22 situation described above, a bill of sale memorializes the terms of the sale. This record protects both parties in the event the other party ever wants to dispute any of the terms of the sale.
Most states have custom bills of sale; most include fields to memorialize the following important details of the transaction:
Once the seller has signed the bill of sale, you have a green light to pay for the car—if you can figure out how to safely get the money to the seller. It just so happens that there aren’t a lot of great ways to transfer large sums between strangers. Incumbent payment methods incur one or more of the following costs:
Let’s compare the different ways you can exchange funds, then we’ll show you why DealNow is the preferred solution for private-party transactions.
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Escrow services |
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If only there were a payment method that combined all of the following advantages and had no downsides:
In case you haven’t figured it out, DealNow is all that and more, with no downsides. That’s because we designed it to solve all the shortcomings of other payment methods.
After you’ve paid, it’s time for the seller to sign over the title to you and give you the keys. Together, you and the seller will complete the following sequence:
Note: Some states require notarization of the title transfer process.
After the deal is done, the seller removes the license plates (except in California and Minnesota, where plates stay with the vehicle).
Congrats, you’re the new owner. Your work is almost done.
You now own the vehicle, but the government doesn’t know that until you finalize a few steps with your local DMV (or equivalent vehicle registry agency).
Before you head to the DMV, get insurance coverage (remember that you can compare quotes and get a policy from your DealNow dashboard).
Here’s what you’ll handle at the DMV:
Now you own the car, have a state vehicle registration, and auto insurance. Congratulations on your new-to-you car!
If you’d like to shrink the number of steps while staying safe and lowering costs, try DealNow. Here’s the process:
If you can manage it without draining all your resources, it’s better to pay cash upfront for a car. You’ll save a bundle that would otherwise go to interest payments, and your long-term net worth will thank you.
If you can’t swing cash upfront, there’s no shame in taking out a loan. Many people need a car ASAP and don’t have the savings to absorb the entire purchase. If you have a great credit score, you’ll get a competitive interest rate if you use a reputable lender.
Even though we’re big fans of paying cash, we don’t judge if you need to get financing for your car. In fact, we’ve integrated a financing option that saves you a ton of time. Instead of shopping for loans for hours, you can apply within the DealNow app for a competitive loan with market interest rates. When approved, the third-party lender funds your DealNow account so you’re ready to pull the trigger.
Just because you have $10,000 in savings doesn’t mean you should go buy a $10,000 car. You need to calculate all vehicle-related expenses, plus all other household needs, to know what you can afford. Here’s a rundown on the expenses associated with buying a used car:
Once you understand all vehicle-related expenses, make two calculations:
Pro tip: Keep total monthly vehicle expenses under 10% of your gross income.
Once you know your budget, you can narrow in on makes and models that satisfy your needs and your wallet. The following factors will help you find the right car for you and your life circumstances:
If you spend a bit of time on research and thinking through your needs, you’ll get a car that you enjoy. Don’t rush into a purchase and wind up with something you regret.
Before meeting a seller, use Kelley Blue Book or NADA Guides to determine a fair price range for the vehicle based on the following:
If the seller’s asking price is outside of the suggested fair market value provided by these tools, you could ask a seller for a discount and provide the valuation results as a justification.
There are two ways to buy a car for your friend.
Both ways end with your friend legally owning the car.
When buying a car from a private-party seller in Florida, you will need to complete the following documents and steps:
The buyer and seller should complete the transaction at a Department of Motor Vehicles office so all paperwork is correctly processed and to protect both parties involved in the sale.
The safest payment method when buying a car is DealNow. Unlike physical cash (which can be stolen) or checks (which take too long), DealNow facilitates instant, verified transfers of any amount directly between buyer and seller.
DealNow’s platform secures transactions by:
With DealNow, you get the immediacy of cash with bank-level security. Funds are held in FDIC-insured accounts with easy offboarding to your regular bank.
Most states require the buyer of a car to pay sales tax on the purchase, whether you pay with physical cash, DealNow, or any other payment method. Besides sales tax, there aren’t any other tax implications when buying a car.
Here’s what you need to know about tax implications for vehicle purchases in a general sense.
No gift taxes: Even gifting the car to someone later does not generally incur gift taxes unless it’s a very expensive luxury vehicle. Individual state rules differ.
A bank transfer is secure, but once your money is sent, it’s out of your control. That’s why we recommend using a bill of sale, doing your research, and getting a professional vehicle inspection. Don’t pull the trigger until you’re totally confident in your purchase.
If you’ve found a used car and are ready to buy it, an escrow service can secure the transaction. Unfortunately, traditional escrow services are expensive and slow.
DealNow gives you escrow-like security in the palm of your hand. Where an escrow company charges hefty fees, DealNow only charges a small, flat fee.
Buying a car from a private seller isn’t just faster—it’s often cheaper too. Here’s why:
Bottom line? Private sales let you stretch your car-buying dollar further.
DealNow is the easiest way to close your own vehicle deal, anytime. It’s the safe and simple way to avoid fraud, sign documents, and instantly transact, all in one app.
