When it comes to buying your next vehicle, options can range from traditional dealers all the way to a fully online order that’s delivered to your front door. Buying a car from a private seller can also be a great option to get a good deal, but it takes a bit more consideration than buying from an established business.

1. Lock in vehicle financing

Whether you are purchasing from a traditional dealer or from a private party, walking in with vehicle financing you were preapproved for ahead of time is key to saving money. Apply to at least three different lenders that offer private-party auto loans. This way, you can compare potential rates and terms and walk into the buying process with a firm grasp of how much you can afford.

2. Search for cars

Now that you know what you can afford to purchase, it is time to begin looking for your vehicle. You won’t be going into a dealership and will instead be looking for the vehicle online using sites like Craigslist or Facebook Marketplace or searching ads in your local classifieds. Look out for specifics on each vehicle’s mileage and history. It is also wise to do some research on the vehicle model itself to be sure no recalls have occurred.

3. Gather information on the vehicle

Once you find the vehicle, you can then reach out to the seller. Ask any remaining questions missing from the ad.

Be sure to ask for a copy of the vehicle history report, which uses the vehicle identification number (VIN) to find past owners, title history, damages, accidents and repairs. The vehicle history report will disclose the latest available mileage reading on the car, which should be close to what the odometer reads when you go for a test drive.

Wait to plan a vehicle test drive until after your questions are answered.

4. Meet the seller and check out the vehicle

Take a good look at the interior and exterior of the vehicle before you start your test drive. Be sure to test the following features during your test drive:

  • Technology, electronics, Bluetooth and speaker systems
  • Headlights, high-beams and signals
  • Your comfort level in the cabin of the vehicle: Do the seats, mirrors, headrests, cup holders, etc., adjust to your liking?
  • Sight lines: Are there significant blind spots for the driver?
  • Acceleration, handling, and braking, both at highway speeds and on city streets
  • Gagues and control panels: Are you comfortable with your how speed, fuel levels and efficiency, gear display and other instruments appear? Is it reasonably easy to adjust the heating, air, windshield wipers and stereo?
Stay safe when you meet the seller

Arrange to meet in a public place, such as a busy parking lot.

  • If at all possible, schedule your meeting while the sun is still up. If this can’t be done, plan to meet in a very well-lit area.
  • Bring a friend or family member with you.
  • Avoid carrying large amounts of cash to your meetup. Instead, if you decide to purchase the vehicle, consider getting a money order or cashier’s check from your bank.

5. Take a test drive

When test-driving the vehicle, try and get out onto the road to see how the vehicle handles at higher speeds. Check the brakes and pay close attention to the sound of the engine as you increase the speed.

6. Get the vehicle inspected

Following your experience driving the vehicle, it is wise to have it inspected by a professional. Ask the owner if the vehicle can be taken to your mechanic. You can have the mechanic look under the hood and confirm that there aren’t any hidden vehicle issues. An engine oil analysis may also be worth the effort. If the owner has any qualms with this request, it is best to walk away — they may be trying to hide a problem with the vehicle.

7. Make an offer and close the deal

Once you know the vehicle is in good condition and are sure you want to purchase it, it is time to make an offer. While you should use their posted asking price as a jumping-off point, use any vehicle issues you found in the inspection process as leverage for a better deal. Check Kelley Blue Book to see what the vehicle’s typical selling price is. Remember that your greatest power in negotiating is the ability to walk away from the deal.

8. Do your paperwork and register the car

Once you have purchased the vehicle, you will need to sort out the paperwork. This part of the process is handled by a dealer if they are involved, but when buying from a private seller, you will need to take responsibility. Check with your state’s DMV office to know which documents you will need.

Typically, you will want:

  • The car title with seller and buyer signatures
  • Paperwork verifying the vehicle’s VIN and odometer reading
  • Any warranty paperwork, if this applies
  • A bill of sale specifying the legal transfer of ownership
  • A lien release, if the vehicle was financed
  • Maintenance records, if available

Don’t forget to register the vehicle in your state once it is in your possession; you will usually have a grace period from the date of sale to do so. This can be done at a DMV office.

Risks of buying from a private seller

While buying a vehicle from a private seller does save you money, it is also a likely place to run into vehicle scams. Look out for common scams like curbstoning (an illegal scheme where someone falsely poses as a vehicle’s private owner), fake advertisements or even identity theft. Online transactions like those on Facebook Marketplace can be particularly risky for buyers, so proceed with caution.

Scams can be avoided as long as you look out for common red flags. Do not buy from a seller who seems too pushy. While there is emotion attached to vehicle sales, trust your instinct. Finally, you also should never purchase a vehicle sight unseen and avoid wire transfers.

The bottom line

Buying a vehicle from a private seller is a great way to save money. But it does come with additional risk, so be sure to complete an in-depth vehicle inspection and walk away at the first sight of anything suspicious.