How to Pay for a Private-Party Car

PrivateAuto Pay empowers instant, fee-free payments of any amount. It's like Venmo for large transactions. Before we get into how amazing it is, let’s look at why other avenues are less than awesome.

Incumbent payment options involve one or more of the following undesirable qualities:

1. Risky
2. Untenable for large transactions (volume limits on transfers)
3. Inconvenient
4. Slow

These factors introduce a lot of friction to the private-party transaction. You don't need that.

Buying a car with cash can save you a lot of money that would go to interest had you chosen to finance the vehicle. We're big fans of paying cash for a car.

Physical cash can be a bit sketchy, though, especially where large sums are involved. If you're a cash buyer, meetups with strangers can feel unsafe when you’re toting fat stacks of bills.

Here are some drawbacks to physical cash transactions:


PrivateAuto Pay allows you to pay cash—digitally. Actual dollars from your account to the seller’s, instantly.

No security worries, no counterfeit concerns, no transfer fees, and no limitations on transaction size. A few taps on your phone screen sends any amount instantly and securely.

PrivateAuto Pay keeps what's best about cash and pairs it with 21st century convenience and security. Out with stacks of grubby bills, in with smooth digital payments.

Just fund your PrivateAuto Pay account from your bank account (checking or savings). When you meet up for the test drive and approve the vehicle, you and the seller will sign the bill of sale in the PrivateAuto app and you’ll be prompted to initiate payment. When you approve payment, cash will instantaneously move from your PrivateAuto Pay account to the sellers. Done.

PrivateAuto Pay is the safe, convenient, fast way to pay cash for a car.

Many buyers prefer a cashier's check for payment when buying a used car. A cashier’s check seems more certain than a personal check for transferring funds. However, unless you’re standing in front of the issuing bank during business hours and they verify the funds, the seller—if they're smart—won't see it as foolproof. Criminals have forged counterfeit cashier's checks to con sellers.

To be absolutely sure your cashier’s check is valid, some sellers wait for it to clear their bank before releasing the title. This puts pressure on you to pay a large sum while trusting the seller to sign over the car later. It also means meeting twice, which is cumbersome.

Other sellers will insist on meeting you at your bank so the bank can verify the authenticity of the cashier’s check. While this works, it’s inconvenient and time-consuming.

With PrivateAuto Pay, funds instantly appear in the seller’s account, meaning you can get the deal done and be on your way. Plus, you get to skip the inconvenience (and limited banker’s hours) imposed by a cashier’s check.

Peer-to-peer money sharing apps like Venmo and CashApp are handy for splitting bills and sending money to your friends and family. But when it comes to larger payments, they fall short. With weekly sending limits of around $5,000, these apps won't work for buying a $20,000 Honda Civic, to say nothing of a $50,000 Jeep Wrangler.

PrivateAuto Pay offers a better solution. You can securely send and receive any amount fee-free and instantaneously, 24/7/365. As convenient as Venmo, without the limitations on transfer size.

For large transactions, many buyers opt to pay for a car by bank transfer. The advantage is that funds are guaranteed by the banks involved, making it a relatively safe payment option.

Wire transfers may be fairly secure, but they’re cumbersome to navigate.

Bank transfers require coordination between the buyer, seller, and two banks. If initiated outside banking hours, transfers can take days to complete. The seller must provide their banking details to the buyer, opening themselves to potential financial harm.

PrivateAuto Pay enables instant transfers between buyer and seller accounts, anytime, 24/7. No exchange of financial info. No reliance on outside institutions. No coordination needed. And no waiting.

For fast and seamless cash payments, PrivateAuto Pay is the new way to transfer funds instantly between bank accounts.

Credit cards are a lousy way to pay for a private-party car. Here’s why:

PrivateAuto Pay is our native payment gateway that gives you escrow-like safeguards and ultimate convenience and security. Here's how it works:

PrivateAuto pay is pure magic. It’s so much better than other payment methods that there’s really no comparison.

Good news: we’ve now made PrivateAuto Pay available for users of other platforms such as Craigslist and eBay Motors. You can fast-track a transaction using our DealNow bridge product, which allows you to start a deal anywhere and conclude it with PrivateAuto.

If you’ve already found a car that you want to buy—even if it’s not listed for sale on PrivateAuto—you can enjoy the power and convenience of PrivateAuto’s transactional infrastructure to get the deal done. Our DealNow fast-track solution allows you to skip the initial shopping and negotiation process and go straight to the transaction.

Whether your dream car is listed on Facebook Marketplace, is being sold by a friend of a friend, or is being auctioned on a site such as Bring a Trailer, you can invite the seller to DealNow and enjoy unparalleled security and convenience.

DealNow uses PrivateAuto Pay for payments and offers all the same conveniences, along with a fast-tracked dealflow.
Here's the DealNow transaction flow:

1. Invite the seller to DealNow via a custom link.
2. Enjoy identity verification, in-app messaging, and a test drive scheduling feature (none of which require you to exchange contact info).
3. Meet the seller and test drive and inspect the car.
4. You and the seller go together through a step-by-step transaction process in which you each confirm relevant details right in the PrivateAuto mobile app. From mileage to the VIN to the condition of the vehicle, we help you both prevent any errors.
5. You and the seller each electronically sign an official bill of sale. This is stored in your PrivateAuto account as a legal record you can refer to down the road.
6. We prompt you to initiate payment after the seller is legally bound to the transaction from e-signing the bill of sale.
7. The seller gets a notification of funds received.
8. The seller signs over the car title and hands over the keys.

DealNow is so smooth, so safe, and so fast that you’ll never want to buy a car without it. No matter where you find your car—from eBay Motors to Autotrader to your neighbor next door—DealNow will help you get the deal done, quickly, safely, and conveniently.

PrivateAuto offers integrated financing with affordable auto loan rates. It all happens seamlessly within the PrivateAuto ecosystem. After a credit score check and approval, qualified buyers can have funds transferred into their PrivateAuto Pay account via a balance transfer between financial institutions.

Once financing is secured, you can instantly send money from your PrivateAuto Pay account to the seller after finding the right used car. There's no need to coordinate with lenders or manage loan paperwork.

Here are some key advantages:


Apply for used car financing through PrivateAuto today!

Unfortunately, when purchasing a car privately, fraud is a concern. Criminals use a variety of methods, such as faked vehicle history, odometer tampering, or title scams.

PrivateAuto offers vehicle history reports with all premium listings, and also has identity verification. These measures cut down significantly on fraudsters—but it always pays to be vigilant.

Don't let a seller rush you into accepting a high price or paying without verifying the details and test driving. If a seller gives you a high-pressure "act now or lose out" ultimatum, it's best to walk away. If the car is priced fairly, there will be other listings available without undue seller pressure.

The key is taking your time—inspecting the car, verifying the vehicle identification number and comparing it against that entered on the title, test driving carefully, and not paying until you're confident about going through with the transaction.

PrivateAuto helps by letting you schedule test drives securely and make payments only when terms are met. With a little patience, you can find the right car and avoid car-buying scams.

When you meet the seller to do the deal, they will transfer the title to you. You’ll then need to complete the title transfer process at the Department of Motor Vehicles (DMV) or your state’s equivalent agency.

A bill of sale is required in some states, but it is a good idea to sign one regardless, as it gives you written evidence of the transaction and the agreed-upon sale amount in case there’s a dispute later on.

PrivateAuto automates the bill of sale by giving you an official bill of sale for your state. You and the seller sign it inside their PrivateAuto mobile app, and it stays there in your account for reference. If there’s ever a question of the sale’s legitimacy, you have this document to back you up.

To learn more, read our complete guide to the bill of sale and why it matters.

Most states require the seller to remove their license plates before turning the car over to you, so you’ll be driving without plates. You should check with your local DMV to see what they advise.

In general, here’s what to know about driving your new-to-you vehicle home after the purchase. Individual states can vary in their requirements.

1. In most states, you can legally drive a newly purchased vehicle home without temporary tags or registration, provided you have a bill of sale and title transfer paperwork with you. However, be sure to check your state's DMV regulations before hitting the road.
2. Some states do give temporary registration tags that let you drive for a short period before receiving permanent plates in mail. For example, in California you can get a temporary operating permit to drive for 90 days after a private party purchase. Check with your local DMV on options.
3. If registering the car immediately, some DMV offices can provide same-day temporary permits after processing the title transfer paperwork.
4. If you already have auto insurance, contact your provider to add the new car to your policy before driving it. If not, you'll need to purchase a new policy. Insurance is required to drive legally.
5. Keep documentation like the bill of sale, title paperwork, and insurance card with you when first driving the car. Also be prepared to explain the situation if pulled over before receiving plates.

You might find our state-by-state guide to license plates a handy resource. It covers what happens with license plates when a used car is sold, and you can learn more about the requirements of your state.

Buying a car from a private seller (as opposed to a dealer) may take a few extra steps. It’s worth it: you get more vehicle for your money when you forgo the middleman markups and documentation fees associated with dealerships.

While individual states can have different nuances, here are the most common items you need to handle after you buy a used car from a private seller:


1. When you purchase the car, the seller should provide you with the signed title. Review it to make sure their name is listed and they signed it over to you.
2. Before driving off, contact your insurance company to add the car to your policy. You typically need valid insurance in your name to drive legally. Make sure you have proof of insurance.
3. Head to the DMV as soon as possible to transfer the title to your name and register the car. Bring the title, bill of sale, ID, and insurance documents. Pay any required sales taxes and registration fees.
4. The DMV will provide you with new registration documents and license plates for the car in your name. These are required to legally drive the car.
5. All states except California and Minnesota: the seller will remove the license plates and you’ll need to get new plates from the DMV.
6. Consider having the car inspected for safety and emissions testing if required in your state. The DMV can provide guidance.
7. Notify your insurance company that the car is now registered in your name. Provide them the new VIN, plates, and registration.

Buying a car is sort of like starting a relationship. You’ll be spending a lot of time together. Start things off right by handling all the details associated with buying a car from a private seller.

Check your specific state laws to ensure you get all mandatory paperwork when buying privately. This documentation is crucial to legalizing the ownership transfer.

Here are some documents that are typically needed:

PrivateAuto is the world’s only transactional automotive marketplace that provides the infrastructure and tools to transact securely. Other so-called “marketplaces” are just “meetingplaces”; they connect a buyer and a seller, but don’t support the transaction.

PrivateAuto is far and above the best car-buying app, but what if you don’t find the car you want? Maybe your perfect vehicle is listed on Craigslist, Facebook Marketplace, or CarGurus.

No problem. Find a car on another platform, then hop over to PrivateAuto to conclude the deal securely and quickly. Our DealNow fast-track solution gives you PrivateAuto's seamless transaction support. Built-in tools like verified identities, legally binding documents, and lightning fast payments with no limits on the amount you can transfer.

So if your dream car pops up somewhere else, no problem! Use DealNow to wrap up the deal conveniently and safely. PrivateAuto's first-of-its-kind transactional tools enable smooth purchases regardless of where you discover the ideal set of wheels.

Unless you live in a state without it, you’ll need to pay sales tax on your vehicle purchase. Other than that, there aren’t a lot of tax implications when buying a car—whether you pay cash or choose to finance it.

Here’s what you need to know about tax implications for vehicle purchases in a general sense. Always do your research on your state’s requirements, as they may vary.