Checklist When Buying a Car From Private Party
When you buy a used car from a private party, there are some precautions you need to take.Assuming you've already inspected the vehicle and received a clean Carfax or Autocheck report, the next thing you want to do is make sure the title is clean.
Have the seller sign a Bill of Sale stating they are the lawful owner of the vehicle and that it's free from all liens and encumbrances.
Here's a sample Bill of Sale you can print out and sign.
Click Here for Printable Version
Car Bill of Sale |
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I, (name:)_______________________________ of (address:)______________________________________________, hereby certify that I am the lawful owner of this vehicle: Year ________ Make ______________________ Model _______________________ VIN#__________________________________________ and have the authority to sell it. I hereby acknowledge the receipt of $___________ in the form of _____________, from (Buyer's name:)_______________________, as full payment for the purchase of the said vehicle, which is sold "AS IS". I hereby state that the mileage of the vehicle at the time of sale is ______________. I do hereby grant, sell and transfer full ownership of this vehicle to the buyer. I certify that this vehicle, at the time of sale, is free from all encumbrances, taxes, fees and liens except as those specified on the Title or listed below; and that, I (Seller) will defend and be held fully responsible for such lawful claims and demands with respect to the vehicle, if any. Buyer accepts full liability for the vehicle, damages, and any third party liability incurred from the vehicle use from the date of sale. If applicable, Seller agrees to make arrangements for the reasonable delivery of vehicle title from lien holder to buyer immediately.
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Don't pay cash for the vehicle. A bank draft is a much better alternative as it provides a paper trail and you can stop payment if the car turns out to be stolen.
Always get a hold of the car title first and check the registration before handing any money to the seller.
On the title, it's important the seller signs in the correct place using their correct name (check their driver's license). One mistake here can result in big headaches later.
The vast majority of private party transactions go smoothly as long as you follow these steps.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid
About The Author
Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate
the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.
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