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How to Buy a Car from a Private Seller and Avoid a Lemon

Posted By Guest Contributor On 04/03/2012 @ 2:01 pm In Cars | 12 Comments

This post is from Elle at Couple Money [3].

Last summer my husband and I had a beautiful baby girl and everything changed (for the better). In preparation for her arrival, we’ve created a baby fund, changed the guest room into her nursery, and increased our life insurance coverage should something happen to use. We still have some items on our to do list that we need to complete this year to give us some peace of mind.

One item on our list that we hope to cross off in the next few weeks is buying a family car. Our current cars have served us well over the years. However, neither one of them can accommodate everybody (plus baby gear) comfortably. We were planning on buying another car before the baby arrived, but postponed it to take care of more directly baby related financial goals. Now we’re ready to go with our car replacement fund [4] full and we’re looking for a deal!

Casting a Wide Net for Our Car Hunt

We’re looking everywhere to find a reliable car and deal from asking our friends and family to look at their network for anyone selling their cars, checking out the inventory at the local dealerships, and scouring craigslist and ads in our area for private sales that may give us a steal.

We’ve bought cars using those methods before and have done a decent job finding deals. While our family and friends feel comfortable buying used cars from dealerships or from a trusted friends, many of them are skeptical about buying a car from a private seller. They worry that too many lemons are out there and they don’t want to get stuck with one.

While it is possible for someone to grab a lemon from a private seller, you can become a savvy buyer who buys a peach of a car and save thousands of dollars in the process. I share what has worked for us along with tips from others who had success with buying a car.

Know What Car You Want

When you have the money saved and you’re ready to shop, take a moment to narrow down what makes and models you’re looking for. Don’t just say you want a car with good gas mileage or body style. come up with a list of no more than 3 makes and models you want to purchase.

There are a ton of ads on Craigslist and with the local paper. It’s all too easy to miss out on fantastic bargains because you’re looking at ads on cars you don’t really want. Save yourself from getting a headache and have 3 models in mind.

Another reason you want to be specific is that you’ll become an expert in the car you want fairly quickly. You know what is a fair price and what isn’t based on the others you’ve seen and/or reviewed. You can quickly spot possible deals by checking out the ads and you’ll know who to call and who to skip.  If you’re pressed for time yet you still want to shop on Craigslist, there are free services that can send you emails when cars that meet your criteria show up.

Create your list based on your personal taste and from reliable sources like Consumer Reports who provide yearly lists on the most reliable used cars on the road. This will help you reduce your chances of getting a car that will eat your wallet with car repairs.

Sorting Through the Car Ads

In general, the more information a seller shares on the ad, the better it is for you. Hopefully besides sharing pictures and the basic information (year, make/model, and mileage), the seller saves time on both sides by giving more background on the car. If not, you may have to call and ask some questions.

When reviewing car ads, don’t get too hung up on the year, rather double check the mileage, which can give you an idea of the wear and tear on the car. I’ve seen a difference of tens of thousands of miles on cars from the same year on craigslist.

Questions to Ask the Seller on the Phone

Before you waste your time and gas money, give the seller a call and ask some questions to help you avoid buying a lemon.

  • Are you the original owner? If not, how long have you owned the car?
  • Why are you selling this car? You may find that you’re in a stronger bargainning position than you thought.
  • Has the car ever been in an accident? Big or small, you want to know.
  • How many miles does the car have (if they didn’t put it in the ad)? If the seller’s car has higher than average mileage, ask why.
  • Do you have maintenance records? You want to know if they’ve taken care of their car.
  • Did you smoke in the car? Smoking damages the interior over time and if you have respiratory problems, you can avoid getting into a car that can aggravate it.

You’re not looking for perfect answers per se, you’re trying to get an idea of how attentive this owner was with their car and whether or not it’ll be a good fit for you.

Getting a Deal on a Car  from a Private Seller

Now’s the fun part – it’s time to go and start test driving the vehicles you’ve marked as deals. Here are a few things to keep in mind during the home stretch of the car hunt.

  • Contact seller to schedule a time to come over to inspect and do a test drive.
  • Write to the VIN number. Look up the VIN# with CarFax to make sure the vehicle’s history is clean.
  • Get an expert opinion. If you’re not a car mechanic, ask the owner if you can take it over to a local shop. Besides catching potential big problems, your mechanic’s report may give you a way to negotiate a lower price to cover minor repairs.
  • Compare options and make an offer. Review the price against Kelly Blue Book and other resources. If you still want to purchase the car, contact the seller and make a fair offer.
  • Buy and transfer. If the seller accepts your offer (or counter offer if you negotiated a bit more),  visit your state’s DMV site to see what you need to complete transfer of ownership. To pay the private seller and get the title notarized, we met them at our bank.

As you can see it can take a bit of time, but it can be well worth the effort.

I’d love to hear from you about your car hunts. How many of you are purchasing a car this year? What big features are are you looking for? any specific models you’d like to buy?

(Photo: kevinco2011 [5])

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[3] Couple Money: http://couplemoney.com

[4] our car replacement fund: http://couplemoney.com/cars-and-road-trips/buying-a-car-with-cash-guide/

[5] kevinco2011: http://www.flickr.com/photos/kevinco2011/6783446996/sizes/m/in/photostream/

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