Buying a car from a private seller can feel like a mystery if you're used to dealerships. However, private sales are becoming more common. Used car sales reached 16.8 million units in 2024, up 4.3% from the year before.[1] With the right information, you can approach the process with confidence. Understanding what to expect may help you avoid common mistakes and find a fair deal.

Advantages and Disadvantages of Buying from a Private Seller 

Buying from a private seller has its pros and cons. Below are a few to consider.

Advantages: 

  • Dealerships buy cars at wholesale prices and sell them at retail. In a private sale, sellers often ask for more than a dealer would pay but less than a dealer would charge. That can give you room to negotiate while still offering the seller a better deal.
  • When dealing with private sellers, time can be to the buyer's advantage. The seller may want to close the deal quickly, which might afford you a good deal. 
  • When buying from a dealership, you buy from a business. There are profits and commissions to consider, which may make them less likely to budge on their bottom line. A private seller, on the other hand, is often just looking to make a fair sale, which can lead to easier negotiation.
  • A private seller might have the entire service history available, including information not normally found on a vehicle history report. The seller may also be more likely to discuss the car's individual quirks, such as a noise during operation or a sticky side mirror.

Disadvantages: 

  • If the buyer isn't aware of common mechanical issues to look for when buying a used car, they might end up with a lemon. A vehicle inspection is crucial to discovering defects that might require costly repairs later. These defects aren't always easy to spot, which makes it imperative to hire a mechanic. 
  • There are no warranties or extended service plans with a private sale. There's also no protection under the Federal Trade Commission's Used Car Rule when buying from a private seller, meaning all repairs are your responsibility.[2]
  • Unlike dealerships, private sellers aren't regulated. This means that it's hard to seek recourse if you buy a car as is from a private seller.
  • Transferring the title and car registration is your responsibility.

Negotiation Tips 

Once you've settled on a vehicle to purchase, it's time to make an offer. Some ways to negotiate a good deal include:

  • If you plan to finance the car, arrange a loan before making an offer. Private sellers usually expect full payment at the time of sale, so having funds ready can make the transaction smoother.
  • Know the market value. Use reliable sources such as Kelley Blue Book® to determine the maximum value and negotiate from there. 
  • Have other cars in line. Let the seller know that you still have other cars to look at. If they sweeten the deal, their car might be the last stop.  
  • Offer a lower amount than you're willing to pay. This negotiation tactic may work for both private sellers and dealerships. For example, if you're willing to pay $4,000, offer $3,500 and work up to your maximum. 

Documents Needed to Conclude a Car Sale with a Private Seller

A few documents are required from the seller before the car can be registered in your name. These are: 

  • A release of liability form and record of the odometer reading 
  • A completed smog test, required in some states
  • The car title
  • A bill of sale, complete with the Vehicle Identification Number (VIN)

Once you have the documents, apply to register the car in your name immediately. If the title lists a financial institution as the owner, the vehicle is financed, and there is a lien on it. Ask the seller for a payoff document. Also, ensure the car is listed on your insurance before driving off. 

Financing Options when You Buy from a Private Seller

Private sellers will likely not offer financing options, so the buyer must approach a financial institution if they don't have the total amount available. Options to consider include:

Private Party Auto Loan 

While some financial institutions don't offer auto loans on private sales, some do in the form of private party auto loans. Factors that affect the loan include the car's age, mileage, and condition. 

Personal Loan 

A personal loan can also suffice if the car doesn't qualify for a private party auto loan or your bank doesn't offer that type of loan. However, the interest rates may be higher than a private party auto loan because personal loans are unsecured, meaning they aren’t backed by the car as collateral.

Common Scams when Buying from Private Sellers

Verify the seller’s legitimacy before purchasing a used car, as scams are common. Career criminals are known to fabricate scams when it comes to selling used cars. Some of these include: 

Title Scams

A well-known way fraudsters aim to scam buyers is through title scams. There are three main ways to commit title fraud: 

  • Title washing: This practice involves counterfeiting or altering the title details in some way, whether it’s removing the salvaged status or simply registering the car in a state that doesn’t require salvage information.
  • VIN fraud: VIN fraud can happen in different ways. The fraudster can swap the VIN number with another car, alter the VIN information, or fabricate a new VIN number. This can conceal car theft, prior accidents, and whether you’re buying a cloned car.
  • Title hopping: Registering a car in your name requires you to pay certain fees and taxes. Some sellers who want to bypass the fees and taxes simply wait for a new buyer and only attend to the transfer after the sale. 

Gift Card Scams

Some scammers may ask for gift cards instead of traditional payment. They might request the card numbers and PINs upfront, promising to meet later with the vehicle. Once they have the information, they disappear. You are left without the car or your money. Gift cards are hard to trace, which makes them a common tool for fraud.

Stolen Vehicle Scam

In some cases, you may take ownership of the car and later discover something is wrong during registration, such as the vehicle being reported stolen. The seller may have used fake documents and provided false contact details. Since most private sales are paid for in cash, once the sale is complete, they cannot be located. You could lose both the car and the money you paid.

Wire Transfer Scam

A fraudulent seller may ask you to transfer money to them through a wire transfer before the deal is concluded as a condition of the car's release. However, before the transaction is concluded, the seller disappears, and you’re out of pocket. Wire transfers are popular because the money is untraceable once the other party withdraws it. 

Urgent or Must-Sell-Now Scam

In this scam, the fraudster has a car for sale, and the deal seems too good to be true. For example, it's a rush sale in a divorce or emigration sale. There might be photos and a description; however, these might be lifted from another ad. For the buyer to get in on the deal, they must pay a deposit to secure the purchase. Once the deposit is paid, the seller disappears. 

Curbstoning

With curbstoning, the meeting place is public, such as in a public parking lot. The car is dressed up to hide any flaws, and the seller disappears without revealing whether there are major defects. The buyer can also be left with incorrect or incomplete documents and, on further inquiry, find out that the car is a salvaged wreck or stolen. 

Ways to Reduce the Risk of Getting Scammed when Buying from a Private Seller

Being well-prepared can help you avoid scams and make a confident purchase. Taking the time to research both the car and the seller will give you a clearer picture of what you're buying.

  • Verify the seller's identity. Ask for their full name, phone number, and address, then look them up online. Be cautious if they refuse to share this information.
  • Check the vehicle history. Use the VIN to get a report from Carfax or AutoCheck. This may reveal past accidents, title issues, or if the car was reported stolen.
  • Compare prices. Look up the car's fair market value on sites like  Kelley Blue Book®. If the price is significantly lower than similar models, it could be a red flag.
  • Inspect the car in person. Meet at a safe location and examine the vehicle closely. Check for signs of damage, mismatched paint, or anything that seems off.
  • Take it for a test drive. Watch for unusual sounds and test all features, including lights, windows, and brakes. If possible, drive on different types of roads to see how it handles.
  • Get a pre-purchase inspection. Hiring a trusted mechanic to check under the hood can help uncover hidden issues before you commit.
  • Review all paperwork carefully. Make sure the seller provides a valid title, bill of sale, and any necessary state-required documents like a smog test certification.

Doing your homework before making a purchase may help you buy with confidence and avoid costly mistakes.

Final Thoughts 

Buying a car from a private seller doesn't have to be a daunting experience. Do your due diligence on the car and the seller to ensure a legitimate sale agreement. When done right, a private car sale can land you a great car at a reasonable price. When you've found a car that meets your needs and ticks all your boxes through a private seller, discuss your finance options with your PNC Bank representative. We offer private party auto loans in many of our local branches. Visit your nearest branch for more details.