Private Seller Lied About The Car: What Are My Rights?

When you buy a used car from a private seller, 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.
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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 qualify for compensation or a refund in Small Claims Court. Of course, in the Supreme 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. Buyers should be cautious when relying on information provided by the seller, as it may not always be accurate.

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.

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.

When a vehicle is sold, the title is transferred from seller to buyer. This process is typically handled by a dealership, but can also be done by an individual. In some cases, however, the title may not be properly transferred. This can happen if there are liens on the vehicle or if the seller did not actually hold the title at the time of sale.
In other words, if there are liens on the car 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 some legal issue. You can still reach out to the seller and work to resolve the problem.

Bought a Car From Private Seller—What Are My Rights?

Buying a car from a private seller can be a great way to get a good deal on your next vehicle. However, it is important to know your rights as a buyer before you make any purchase.

If you bought a car from a private seller, you have very few legal protections. In most states, there is no requirement that private sellers disclose any information about the vehicle's history or condition. As a result, it's important to do your due diligence before making any purchase.

Get the car inspected by a qualified mechanic, and make sure to get a copy of any repair records if available. It's also a good idea to run a background check on the car’s VIN number to see if it has been in any accidents or had any other significant issues.

In most states, there is a “cooling off” period after you purchase a car from a private seller. The cooling-off period gives consumers time to reflect on their purchase and make sure that it is something that they truly want. In many cases, the cooling-off period lasts for three days. This means that, if you have buyer's remorse, you are able to cancel the sale within that time frame.

During this time, you can have the car inspected by a mechanic to make sure that it is in good condition. If you find any problems with the car, you can back out of the sale and recover your down payment.

While private sellers are not required to provide a warranty on their vehicles, this does not mean that they cannot sell the vehicle with a warranty. If you, however, buy a car from a private seller that didn’t provide a warranty, that means that if something goes wrong with the car, you will be responsible for the repairs.

Keep in mind that even if you do find out that the car has serious problems, you may not be able to get your money back from the seller. In most cases, private sales are final, so it's important to be sure that you're comfortable with the purchase before signing on the dotted line.

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.

Refund Laws For Private Sales

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 (maybe they sold a car with a salvage title, for instance, without telling you that the title was salvage).

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.

It's important to remember that you have the same rights when buying from a private seller online as you do when buying in person. This means that you should always get a Bill of Sale, and if you have any doubts about the vehicle, you should seriously consider a vehicle history check.

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. Browse used vehicles for sale.

Experience the PrivateAuto Advantage

Avoid scams, keep personal information private, and guarantee funds with PrivateAuto. Fast, convenient car transactions. Get started today.

FAQ On Private Party Car Sales

Does California lemon law apply to private sales?

California's lemon law does not apply to private sales. The law is designed to protect consumers who purchase vehicles from a licensed car dealer, and it does not cover transactions between individuals. This means that if you purchase a car from a friend or family member, you will not be covered by the lemon law.

California’s lemon law specifically provides that only people who buy warrantied vehicles from a dealer can benefit from the lemon law. In other words, the lemon law does not apply to a used vehicle purchased from a private seller even if the used vehicle was purchased while a manufacturer’s warranty was still in effect.

Is there a lemon law in Illinois for used cars?

Does NYS lemon law apply to private sales?

Does Iowa’s lemon law apply to private sales?

Does Michigan lemon law apply to private sales?

Is it illegal to sell a car without disclosing problems?

Can you sue someone for lying about a car?

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