10 Steps to Buy a Used Car From a Private Seller

Buy a used car privately to save thousands compared to dealer pricing. Follow these 10 steps to land your dream used car at thousands below dealer prices:
Let’s get into it!

One: Determine Your Budget

When buying a used car from a private seller, the very first step is deciding your maximum budget. This includes factoring in all expenses.

1. Research current market prices for the makes/models you want. Resources like Kelley Blue Book offer fair value data.
2. If paying cash, tally up your savings and decide the total out-of-pocket max.
3. If you’re planning to finance the car, calculate what your monthly payment will be. Our auto loan calculator can help with this.
4. Factor in ancillary costs like insurance, fuel, and maintenance. Add to your total budget.
5. Include estimated sales tax on the vehicle purchase price in your state.
6. Consider must-have features vs. nice-to-have add-ons. Balance needs and wants within your budget.

Need financing? We’re here to make it easier. No more coordinating between a bank and the seller. Everything happens seamlessly in the PrivateAuto ecosystem.

Here’s how it works:

1. Apply for competitive financing through the PrivateAuto app and get approved by our FDIC-insured lending partner.
2. The lender funds your PrivateAuto Pay account.
3. You buy the car and pay the seller instantly via PrivateAuto Pay.
4. You make car payments to the lender.

It’s so smooth, you’ll wonder why this wasn’t available all along.

Two: Decide Which Vehicle You Want

If you’re in the market for a vehicle, you probably have some idea of what type, make, and model you want. If not, this is a good time to do some research and consideration.

Start by evaluating your lifestyle and transportation requirements. Consider factors like your daily commute, family size, cargo space needs, and any specific features like air conditioning or a heated steering wheel or capabilities that are important to you.
Research different types of cars to find the one that best suits your needs. Options range from sedans and SUVs to trucks and minivans. You should also factor in things like fuel efficiency, safety features, and the type of terrain you typically encounter.
Think about your hobbies, interests, and activities that may require specific features. For example, if you enjoy outdoor adventures, you might prioritize a vehicle with off-road capabilities like a Wrangler or a Grand Cherokee.
Once you have a specific make and model in mind, take time to research pricing and understand your target vehicle’s fair market value. Look at mileage, condition, features, and location to get a sense of the market value range. Having a baseline for pricing helps you spot good deals and avoid getting ripped off.

Three: Shop Used Vehicles for Sale By Owner

Now that you know what type of vehicle you’re looking for, it’s time to find it.

1. Browse used cars for sale on PrivateAuto or other vehicle listing sites.
2. Set filters for the vehicle type you want and the price point that matches your budget.
3. Make offers on vehicles that match your criteria (next step).

If you're open to buying a car from out of state, PrivateAuto enables you to broaden your search and potentially find a better deal or a rare model—like a Dodge Demon—that may not be available in your immediate area.

Four: Make Offers and Contact Sellers

Once you've found your dream car, you can seamlessly contact the seller and make an offer right in the PrivateAuto app.

Negotiate the Best Price

When buying a used car from a private seller, negotiating a fair purchase price is key:

If you feel it’s justified, you can make an initial offer below asking price, citing specifics like mileage, wear and tear, or needed repairs to justify the lower offer. Refer to your budget and market research for pricing.
If your offer is rejected, exchange counteroffers with the seller until you reach an agreement both parties feel good about. But never be rude or pushy.
For financing, share your pre-approval terms with the seller so they feel confident you are a serious buyer with secure funding.
Be willing to walk away if you and the seller can't reach a deal within your research budget. There are other cars out there.

Contact the Seller

PrivateAuto empowers you to contact sellers and negotiate deals seamlessly within our secure app:

Send your offer amount and explain why it's fair via in-app messaging. You won’t give out your contact info, and you can choose to deal with verified sellers only to avoid fraudsters.
Sellers can accept, decline, or counter your offer, keeping all negotiations conveniently in one place.

PrivateAuto takes the stress out of contacting sellers and negotiating your best deal.

Five: Get a Vehicle History Report

While a vehicle history report is not mandatory, it can certainly give you peace of mind. It covers ownership history and maintenance records and demonstrates how well the seller cared for their car.

PrivateAuto provides a vehicle history report for all premium listings.

Here are some reasons a vehicle history report gives you peace of mind. You know how well the car has been cared for, which gives you visibility into any accidents or insurance claims. It should also include service records, major repairs, and other work.

Six: Test Drive the Car

Unless you’re buying a car remotely, you’re going to want to test drive it. PrivateAuto lets you arrange the test drive without giving out your contact info.

1. Our handy in-app scheduler allows you and the buyer to conveniently arrange the ideal time and public meetup spot. No hassle or compromise on your schedule.
2. You control the entire process securely through the app. We enable you to connect with verified sellers only, so you can feel confident meeting them for a test drive.
3. Our platform empowers you to engage sellers on your terms for a smooth sale. We handle scheduling and verification seamlessly while protecting your privacy.

Seven: Have the Car Inspected

It’s a good idea to get a mechanical inspection on any used car you buy.

You can inspect it yourself at the time of the test drive if you have the skills. Or, you can have it inspected by a reliable mechanic.

Learn more about pre-purchase inspection, or order a professional inspection here.

Eigth: Handle the Paperwork

Finalizing the sale of your car requires some important paperwork for a smooth ownership transfer. Don't let the documents slow you down—with PrivateAuto, the process is simple, secure, and 100% digital.

Create a Bill of Sale

Many states require a bill of sale, but you should do one regardless. A bill of sale protects you by memorializing the terms of the sale, the vehicle VIN, selling price, mileage and the names and signatures of both parties.

PrivateAuto makes it easy with an official bill of sale right in our app, tailored to your state. You and the seller review the details, then digitally sign the bill of sale after inspecting the vehicle. No printing or scanning, simply sign electronically in the app.

With PrivateAuto's seamless bill of sale process, you can sell your car with confidence, security, and legal protection.

Confirm the Odometer Reading

For vehicles under 10 years old, federal law mandates that the seller must provide you a written odometer disclosure statement. This statement must be on a form that is approved by your state’s Department of Motor Vehicles (DMV) or equivalent motor vehicle registry agency.

The seller should never round up or estimate when filling out this document. Both you and the seller will need to sign this at the time of sale.

The seller should never round up or estimate when filling out this document. Both you and the seller will need to sign this at the time of sale.

Nine: Pay for the Car

What if there was a smooth, digital way to send money instantly with no transfer fees? A digital transfer that is as instant as the blink of an eye?

Say goodbye to waiting for paper checks to clear and every other awkward payment method. It's time for an easy, seamless way for you to pay for a car.

What is PrivateAuto Pay?

PrivateAuto Pay is PrivateAuto’s built-in banking integration that enables instant, secure, and fee-free funds transfers up to $1M. It’s a dream come true for both car buyers and sellers.

Your PrivateAuto Pay account is actually a bank account that you own, accessed via your PrivateAuto profile.
Easily move money between your PrivateAuto Pay account and your external bank account via a balance transfer.
Send up to $1 million instantly from your account into the seller's PrivateAuto Pay account.
Instant payments arrive any time of day, every day of the year.
No exchange of contact information or banking info.
Secure encryption protects your data from hackers.
Conclude the entire transaction when you meet the buyer for a test drive.
Pay for a car from a remote seller and forgo costly and inconvenient escrow services.

OK, so PrivateAuto Pay is great and all, but it’s a service for users of PrivateAuto’s transactional marketplace. What if you're buying a car on another website, such as CarGurus?

Enter our DealNow fast-track solution, created to give you access to PrivateAuto’s extraordinary transaction capabilities. Even if—especially if—you didn't find your car on PrivateAuto.

DealNow Is the Answer

PrivateAuto allows you to search for used cars, communicate with sellers, complete purchases, and handle financing all in one place. But we know you may find a great car listed for sale elsewhere, like Facebook Marketplace or Craigslist.

That’s why we created DealNow. You get to skip the listing process altogether and go straight to closing the transaction with the power of PrivateAuto Pay. Here’s how it works:

1. Invite the seller to DealNow via a custom link.
2. Enjoy identity verification, in-app messaging, and our test drive scheduling feature (none of which require you to exchange contact info).
3. Meet the seller, and drive 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 Vehicle Identification Number (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. You will then be prompted to initiate payment.
7. The seller will get a notification of funds received and confirm receipt of payment.
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 seller—from eBay Motors to Autotrader to the friend of a friend—DealNow will help you get the deal done.

Ten: Title Transfer and Registration

Finalizing your used car purchase requires signing some key documents. Being prepared with the right paperwork ensures a smooth transaction.

Transfer the Title

The seller must sign the title over to you to legally transfer ownership. Double check that the VIN, make, model, year, and mileage on the title match the actual vehicle. This prevents title fraud.

Register the Vehicle at the DMV

Bring documentation like the signed title, bill of sale, current auto insurance, and your ID to the DMV. There, you will need to pay any state registration fees and sales taxes.

The DMV will enter your ownership into their records and provide registration documentation in your name.

Get New License Plates

After registering, most states issue new plates to you with your registration sticker or tag. This associates the plates with you for renewals.

Exceptions are California and Minnesota—plates stay with the car in those two states. Your local DMV will provide you with temporary plates to drive before your permanent plates arrive by mail.

How to Buy a Car Through PrivateAuto

You’ll love how smooth and secure the car buying process is when you use the PrivateAuto mobile app.

1. Browse used cars for sale by owner. Filter by location, vehicle type, or other criteria.
2. Make offers on vehicles you like (PrivateAuto lets you offer less than the asking price).
3. Message the seller with any questions without giving your contact info.
4. Schedule the test drive while keeping your personal details private.
5. Electronically sign the bill of sale along with the seller.
6. Instantly send payment and take ownership of the car when the seller signs the title and gives you the keys.
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Looking to sell your car? Create a listing on PrivateAuto and connect with interested buyers today!

Buying a Used Car FAQ

How many miles should you buy on a used car?

When buying a used car, you naturally want to get the lowest possible mileage for your budget.

Here are some general guidelines on acceptable mileage based on the age of the vehicle:

- 1 to 3 years old: look for less than 36,000 miles.
- 4 to 6 years old: ideally, less than 60,000 miles.
- 7 to 10 years old: try to find under 100,000 miles.
- 11 to 15 years old: below 150,000 miles is good.

Miles alone don't tell the whole story. Be sure to get a vehicle history report to check for accidents, ownership history, service records, and title issues.

Inspect the car thoroughly yourself and consider having a mechanic do an inspection. Look for signs of excess wear, damage, or needed repairs. Test drive to assess performance.

A higher mileage car that has been well-maintained and cared for can be a better value than a lower mileage car that has been neglected. The condition and maintenance history, along with mileage, should determine if the price is right.

The make, model, and type of vehicle also impact expected mileage. For example, trucks and full-size SUVs often remain usable with higher miles than compact cars. Focus more on the car's overall condition than mileage alone when evaluating used vehicles.

How to transfer the vehicle title?

When I buy a car from a private seller, can I drive it home?

What to do after you buy a car from a private seller?

What is the best place to buy a car from a private seller?

What are the tax implications of buying a car in cash?

Does PrivateAuto offer payment plans?

How does PrivateAuto vet buyers and sellers?

Does PrivateAuto provide the necessary paperwork for a successful transfer of ownership?

What is the safest way to transfer money when buying a vehicle privately?