When you buy a used car, you're generally purchasing it on an "as-is" basis, but what happens if the seller gives you their word that the car is in perfect working order — and it isn't? Here's what you need to know if you bought a bad used car from a private seller.

Used Cars Are Sold "As-Is"

The first thing you should be made aware of if you've purchased a used car is that used cars are sold on an "as-is" basis. That means, regardless of just about anything the seller does or says, there's little legal recourse even if a used car that was sold as "excellent" turns out to be a lemon. Rare exceptions to the as-is clause apply if the seller offered some sort of warranty on your purchase.

Used car dealerships occasionally offer warranties, too. However, if you purchased from a private seller, you may not have any legal path to take.

Common Problems With Private Car Sellers

The most common issues buyers run into when purchasing from private car sellers include:

  • Ending up with a "lemon," which is a faulty car.
  • Being misled about a vehicle's quality or performance.
  • Finding out that the seller has a lien on the title.

To help you understand what options you have, let's walk through each of these common scenarios in detail.

The Seller Made Misleading Statements

If you buy a lemon from a dealer, you're entitled to compensation under the Federal Trade Commission (FTC)'s Used Car Rule. However, this regulation — like most that apply to dealers — doesn't apply to private car sellers.

If a private seller made misleading statements that persuaded you to buy the car, you may quality for compensation or a refund in Small Claims Court. Of course, in the court of law, it can be tough to prove what a seller actually said. It will likely be declared hearsay, and it will be dismissed.

Even with proof of misleading statements, like the used car's listing, things like "it runs great" are subjective and won't hold up, even if the car broke down shortly after you purchased it. Ultimately, used cars that don't have warranties simply don't come with any guarantees. In the eyes of the law, a used car buyer is accepting the vehicle as-is, with very little weight given to what the seller tells them about it.

Bought a Bad Used Car From a Private Seller: What's Next?

The Seller Didn't Have a Free and Clear Title

Different laws will empower you to file a claim if the seller still owed money on the car and didn't tell you about it or the seller didn't have the right to sell the car (that is, they aren't the registered owner). This constitutes fraud and potentially wire fraud if the seller made these claims using the internet or telephone communications.

In other words, if there are liens on the title or the seller didn't hold the title at the time of the sale and you're now unable to register the car and/or facing the risk of repossession, all of these things give you possible legal recourse.

Other Circumstances and Issues

Unfortunately, if your situation doesn't fit any of the above descriptors, you have little legal protection. Private sellers simply don't have to comply with most laws that impact dealerships. They're completely exempt from most laws that govern auto dealers, meaning they don't have to include a "buyer's guide" or other disclosures.

However, that doesn't mean you should give up if you run into issues. You can still reach out to the seller and work to resolve the problem.

How to Get a Refund or Compensation

If you feel that you were truly misled and persuaded to purchase the vehicle based on false statements, you do have the option of pursuing compensation or a refund, but you first have to ask yourself:

  • When did the problem appear? How long has it been since you purchased the car?
  • Did the seller make false claims prior to you agreeing to purchase it? Did they make these claims verbally to you, in writing, or in advertisements?
  • Was the seller intentionally dishonest in an attempt to sell you the vehicle?

The burden of proof falls on the buyer in these situations, and you'll need to prove that the false statements persuaded you to purchase the vehicle. You also need to prove how the vehicle is different from what the seller told you, and you need to prove a substantial difference. Finally, you need to demonstrate how these differences led to you losing money and how much money you lost.

As you may have guessed, proving false statements isn't easy and most people will conclude that the legal fees just aren't worth it. However, there are instances where specific laws offer added protection, like if:

  • The seller deliberately changed the odometer and misrepresented the car's mileage.
  • The seller didn't have the right to sell the car (stole it, owes money on it, and so on).
  • The seller misrepresented the vehicle's age, condition, or history (salvaged title, for instance).

The above examples show the type of gross misrepresentation that may hold up in court if you have the proper proof. Comparatively small things, though, like transmission failure or engine problems, likely won't get you far since it's tough to prove that: (1) these problems did exist, (2) that the seller was aware of them, and (3) that the seller intentionally hid them from you.

Invest in the Right Used Car

Purchasing a used car can be daunting. After all, you don't want to end up making a mistake that could cost you down the line. It's important that you do your research into any used car you're considering, understanding the year, make, and model and inspecting the car yourself to see its condition and how it drives.

Being misled by a private seller is disheartening, to say the least. That's why at PrivateAuto we offer tools and resources to help buyers like you make smart investments with confidence. From ready-to-sign state documents to identity verification, secure messaging, and more, PrivateAuto will help make your next used car purchase a breeze. Interested in browsing our listings? Get started today.