Woman driving a used car

Buying a Used Car from a Private Seller

Updated December 1, 2020 . AmFam Team

Are you ready for a new set of wheels and deciding between a dealer or a private seller? Here are the things you need to know when purchasing privately.

So, you’re ready for a new set of wheels? How exciting!

There’s something to be said for the experience of bringing home a shiny “new” car. If that’s what you’re after, buying from a dealer is probably your best option. But, purchasing a car from a private seller can be a great idea, too. It will likely be less expensive — but the rewards can extend beyond money saved on the purchase price.

If you’re wondering, “should I buy a car from a private seller?” you’ll want to review the owner’s service documents and get familiar with the title transfer process in your state. Perhaps most importantly, you’ll also want to thoroughly review the Carfax or VIN report prior to making a decision.

Before you get out your checkbook or apply for financing, there’s a lot to think about. Take a look at our tips to help you through the process of buying a car from a private seller — and good luck!


What to Know About Buying a Car From a Private Seller

A car from a private seller will probably come with some noticeable wear-and-tear. But what you really need to verify when buying a vehicle from a private seller is that they're the actual owner of the car, and that the car's worth buying.

Compare the information on the seller's driver's license with the details on all paperwork they'll provide you by running a VIN check. With one, you'll also get news on the history of the car, and a status on whether or not the car's owned outright by the seller or if there's a lien on the car by a financing company. 

Here are some things to consider when purchasing a car from a private seller:

The car’s past

A used car had a “life” before you, and it’s important to understand what the car has been through. It’s up to you to gather information and do your research — especially if you’re considering purchasing a used car from a private seller.

Start by asking the owner some general questions about usage and mileage. You may learn something key about the vehicle’s history that will help inform your decision on whether to buy or to continue shopping.

Inspect the VIN

If everything sounds good, it’s time to do some fact-checking. Ask the owner for the vehicle identification number (VIN) and compare that to the VIN posted on the driver's side dashboard plaque near the windshield.
Once you have verified the VIN, enter it in the free VINCheck database (Opens in a new tab) on the National Insurance Crime Bureau (NICB) website to make sure the car wasn’t stolen or reported as salvage.

You’ll also want to purchase a car history report to get a record of accident damage, recalls and any title problems. Here's more information on what to look for and how to interpret car history reports.

Learn about the car’s maintenance history

It’s also important to make sure that the car has had maintenance performed at regular intervals, and that any necessary repairs or recalls on the car have been completed. You'll also want to check that the car was brought in for oil changes — every 5,000 miles for most cars.

A used car that has not had timely maintenance could be a risk for problems later on, even if it passes its state emissions inspection. If you’re buying a used car from a private seller, be sure to ask the owner for copies of the maintenance records. The car history report should also have maintenance checkup dates and details.

A reputable dealer typically provides some information about the car’s past for you. For instance, the dealer will offer a list of all the services that were performed on your vehicle at any franchise in the U.S. Better still, some used car from a dealerships may also be certified pre-owned (CPO) authorized, which usually guarantees the car has had regular maintenance performed, and that it has never been in a serious accident or had a major repair. CPO-endorsed cars usually come with a limited warranty, too.

The manufacturer’s guarantee

A warranty can provide the peace of mind that your car will keep running for at least a certain amount of time. But you don’t necessarily have to buy your car from a dealer to be protected under one.

The warranties provided by the manufacturer when a car is new are transferable to the next owner, regardless of whether the car is sold by an individual private seller or a dealer. Depending on how new the car is that you are purchasing, you may still have some of the new car warranty remaining.

If a warranty is important to you, purchasing a CPO vehicle may be the way to go. CPO cars always come with an additional warranty, although the specifics vary between automakers. The warranty is the primary reason CPO cars cost more than non-CPO cars, that extra peace of mind may be worth the additional cost.

What to Do Before Buying a Car from a Private Seller

As much as this car may be the make and model you’ve been looking for — be certain that the details check out before signing on the dotted line. If the seller’s claiming that tires were purchased last year, inspect the receipt and then compare the make and model of the tires to those on the car.

When it comes to what to do when buying a car from a private seller, it’s important to stick to the facts to be sure you’re making the right move. Here are other key points to take into account before buying a privately sold vehicle.

Gather the appropriate paperwork

Verify that both you and the seller have the right paperwork on hand for buying a used car from a private seller — if you want to avoid extra trips back and forth. Be sure you've got hard copies of the following documents handy before making the purchase:

  • Your driver’s license
  • A blank bill of sale that conforms with your state’s DMV requirements
  • The seller’s emissions documents
  • Proof of your auto insurance — a digital copy will work too

A few notes about the title

If the seller owes money on the car, you’ll need to coordinate the purchase with their bank in order to secure the title. If you unwittingly buy with an active financing lien on the car, the bank may be forced take the car from you if you avoid this step, should the seller not pay off their loan.

Visually verify that the title is in the current seller’s name and compare the name on the title with the seller’s driver’s license. If the car’s been paid off, verify no financing company is listed on the title as the lien holder of the car. If the owner’s still making payments, call the bank financing the loan to discuss next steps.

Look carefully at the title status and compare this against the title status in vehicle history report you’ve ordered. They should match.

Take it for a test drive

Getting behind the wheel is where the fun starts, but again — exercise caution here. Be sure to get written permission to drive their vehicle, first and foremost. Next up, put the car through its paces. Explore acceleration, braking and handling, etc.

After testing it works properly, turn the stereo off so you can listen for engine issues or other signs of trouble. Test the heat, AC and defrosting systems. Look under the car before you head out for signs of leaking and be sure to follow up on any concerns with your mechanic.

Have it inspected by a mechanic

One of the most important minor investments you can make when purchasing a car from a private seller is to have it inspected by a mechanic. Before heading out on your test drive, make an appointment with a trusted mechanic and have them run engine diagnostics on the car. This quick test can inventory the car’s internal systems and alert you to many types of issues.

The mechanic should also perform a multi-point inspection, similar to one that a used car dealer would perform on a new arrival. They’ll get you a report and don't forget to ask for an expert opinion on whether the car’s worth the price.

Get a title transfer when ready to purchase

If you’ve only purchased a car from a dealer in the past, the transfer of the car’s title is something that happens in the background. But after buying a used car from a private seller, you’ll be responsible for this job. After completing, signing and dating both copies of the bill of sale you've brought with, it's time to manage the title. 

Transferring a car title usually occurs in two steps. The first step is performed by the seller, and the second one is on you, the buyer. The seller’s job is to sign over the title to you, but they may need to turn the title over to the DMV first, depending on state laws where you're buying the car.

There’s usually a release of ownership area on the title where the seller will print and sign their name. Because each state has its own rules, be sure you’re checking in with the DMV on the exact process to ensure you’re getting it right.

Protect Your Car with American Family Insurance

Whichever option you choose, your American Family agent (Opens in a new tab) will be there to support you and help you find the right insurance to protect your new or used vehicle. Learn more about our car insurance options and how to select the best coverage for your used car.

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    What if I don’t have car insurance?

    The dealership is required by law to insure their cars, which means they should have a blanket policy that pays for damage if a customer is driving the vehicle. So, whether you personally have car insurance or not, the dealer’s insurance should be considered the primary coverage in the event you need to file a claim.

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    What if I have my own car insurance?

    Same answer as above — if you’re test-driving a car, it’s typically the dealership’s responsibility to cover any damages. However, having your own car insurance is always a good idea because there are some instances a dealership could hold you liable (you’ll find out more on that below).

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    Can the dealer hold me liable for damages?

    All of that being said, while you may be covered under a dealership’s insurance, it doesn’t mean you’ll always get off the hook. Depending on the cause of the accident (reckless driving for example) the dealer might hold you liable for damages. While the dealership may initially pay to repair the car, they could subrogate and try to collect from you or your insurer if you caused an accident during the test drive.

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    What if I sign a waiver?

    There are some dealerships who will ask that you sign a “loaner/demo” agreement before handing over the keys for a test drive. This usually happens when you’ll be driving for an extended time or if the salesperson isn’t present on the test drive. Signing the waiver means you’re accepting liability to pay for the cost of repairs if you cause damage to the vehicle during the test drive.

    Of course, be sure to check with your agent to verify that your personal car insurance policy will cover you in instances like this.

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    What if I’m test-driving a car for sale by a private party?

    Though cars that are sold on the private market are typically covered by standard personal auto insurance, the best thing to do to protect yourself is ask them to call their agent and ensure you’re covered to drive the car.

    You could also ask the owner of the vehicle to sign a statement that gives you permission to drive the car and stating the car is insured. It never hurts to be extra careful in instances like these.

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    What do I need to test-drive a car?

    Requirements to test drive a car may vary by dealership and state, but typically you’ll just need to have a valid driver’s license on hand to take it for a spin.

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    How to Prevent Distracted Driving

    Sending a text, eating your burrito, applying makeup — what do all of these tasks have in common?

    They’re all everyday examples of distracted driving.

    As a driver, it’s your responsibility to focus on the road to keep you, your passengers, and other people on the road safe from accidents. We’ve put a spotlight on some risky driving behaviors that we hope can help influence you to keep your focus on the road.

    What is Distracted Driving?

    Distracted driving is when the driver is doing something that takes their attention away from the task of driving. Any time your eyes and/or mind are taken away from the road, you’re technically distracted, which means an increase in the risk of an accident.

    Not all driving distractions are created equal. As you can imagine, some forms of distraction aren’t as dangerous as others. For example, hands-free telephone conversations — although not recommended — isn’t as deadly as other modes of conversation while driving.

    The Deadliest Driving Distraction: Texting and Driving

    It should come as no surprise to you that texting is the most common distraction while driving as well as the most dangerous. It’s so deadly in fact, that it gets its very own section.

    It’s easy for us all to see the dangers of texting while driving, but even with that knowledge, so many of us fall into the temptation of sending off a fast text message while behind the wheel. But even a quick text can have horrible consequences.

    Just think, when you look at your phone, your focus is on the screen, not the road; one hand is off the wheel to hold your device, and your mind drifts to the message instead of the task at hand: driving safely.

    Why texting is distracting

    To put it into perspective, if you’re traveling at 55 MPH and you take your eyes off the road and onto your phone, you’ve traveled about 100 yards – the length of a football field! That’s quite a distance to cover driving “blind.”

    The National Safety Council reports that one out of every four car accidents in the United States is caused by a distracted driver who was texting. They also reported that texting and driving is six times more likely to cause an accident than driving while intoxicated.

    Let these driving facts be a wake-up call to the extreme dangers of texting while driving.

    Is it Illegal to Use Your Phone While Driving?

    The truth is that it depends on which state you live in. As of 2020, the Governors Highway Safety Association reports that there is a hand-held cell phone use ban in 22 states, with 48 states banning text messaging for all drivers. Find out the distracted driving laws for your state to ensure you’re following the rules of the road in your state.

    It’s always important to know our state laws, and in your state there may very well be no law preventing you from texting while driving. However, for your safety as well as those in your car, and for anyone else sharing the roads with you, it’s best to stick with a firm “no phone use while driving” mentality.

    Types of Distracted Driving

    The first step to preventing distracted driving is understanding what it is. In a nutshell, anything that occupies your attention while driving is a distraction. Here are a few notable distractors that should be eliminated while behind the wheel.

    Checking your GPS

    When it comes to directions, we’ve come a long way from the world of fold-up maps. Today, everyone has a built-in navigation system in the palm of their hands: the smartphone. The only problem is that just one quick glance at your phone’s screen is all it takes for a costly mistake behind the wheel.

    Your best bet is to leave your phone in your pocket or purse when driving. But if you must use your phone for directions, enable the voice feature so that you don’t have to look at the screen for every turn.

    Sifting through your music device

    Trying to find the right song for your road trip is just as dangerous as texting and driving. Your best bet is to pick a playlist prior to getting into your vehicle. Or listen to the radio. The key here is to keep your eyes on the road and not on your music device.

    Checking social media

    Instagram, Snapchat, Facebook, Twitter, you name it – all of them bide for our constant attention. Don’t fall prey to this when you’re driving. That post, tweet, or message can wait. Avoid checking social media when behind the wheel.

    Eating behind the wheel

    You may be a pro at eating your burrito on the go, but ingesting your lunch while driving is a big no-no. All it takes is one wayward waffle fry to take your attention from the road to your lap. And it’s not just the mess that distracts; it’s the smell, taste, you name it – that makes eating one of the most distracting things you can do while driving.

    Other types of distracted driving

    There are a few more forms of distracted driving that could cause an accident. If you’re in the driver’s seat, try to avoid these altogether:

    • Taking selfies
    • Talking on the phone
    • Drinking coffee or another beverage
    • Putting on makeup
    • Using an app
    • Loud music

    Top 5 Ways to Prevent Distracted Driving

    There are easy ways to prevent distracted driving. Try using making these five simple changes distracted driving safety tips to have a safer driving experience.

    Use a text-blocking app

    There are many apps available that block texts while driving. Several apps exist with different features, ranging from ones that completely block any incoming or outgoing texts while going a certain speed, to apps that will send a message saying you’re unavailable to respond to an incoming text. Here’s a list from DMV.org with great suggestions for apps to fight distracted driving.

    Have a passenger navigate for you

    If you’re driving with a passenger (of an appropriate age), hand the directions to them. Even a not-so-great navigator in the passenger seat is better than the person behind the wheel being responsible for both driving and navigating. If you’re driving by yourself, take the time to look at the directions before you set off. Then turn the volume up and let the AI lead the way.

    Make music selection easy

    Make multiple playlists that you can choose from before starting the car. If you really need to change it up, either pull over or wait for a red light. Set your presets to stations you already know you like. Hitting one button is better than cranking the dial until you find music you like.

    Don’t text while driving

    If you’re behind the wheel, just put the phone away. Social media can wait. It’s not going anywhere — that we can promise. Are the notifications too tempting? Turn them off! No comment or new tweet is worth the risk.

    Eat at home or while stopped

    If you’re in a rush and want to keep things moving, consider the hazards of driving while eating behind the wheel. Hopefully you can recognize that the risks outweigh the temptation, and you can wait until you get to your destination to eat.

     

    How Does Distracted Driving Affect Insurance?

    For starters, getting into an at-fault accident will almost always make your insurance premium go up, simply because your insurance company now deems you a higher-risk driver. Distracted driving is no exception. Even if you avoid an accident but you get a ticket for distracted driving, you’re susceptible to those increases in insurance.

    Why does distracted driving increase insurance? For starters, you may be getting a discount for having a clean driving record. But if you get a ticket, such as for texting while driving, you may no longer be eligible for that discount, and you’ll notice an increase in your premium. Another reason your insurance might go up goes back to being a higher risk. If you’re guilty of distracted driving, an insurance company will consider you a high-risk driver (meaning you’re more likely to file a claim due to an accident) and they’ll set your premiums higher.

    Many of the discounts that insurance companies give out revolve around rewarding drivers for having no claims and a good driving record in general. Don’t let distracted driving take away those perks!

    Protect Yourself From Distracted Drivers on the Road

    Avoiding distracting driving behaviors is a great way to be safe on the road, and car insurance is a great way to stay protected from the unexpected. With American Family you can customize your car coverage to meet your unique needs. Talk to your agent today to find the right coverage for you.

    The Insurance Information Institute claims driving while interacting with a mobile device can increase the odds of a crash by as much as 3.5 times, compared to the risks that a sober, alert and attentive driver faces. Teens are more susceptible to collisions, even when speaking hands-free on a mobile phone. Let’s explore the many ways you can help prevent distracted driving accidents.