Q&A for How to Buy a Used Car from a Private Party

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What do I do after I sign the title?

Community Answer

You don't sign the title. The seller does this when you purchase from them and then you take it to the DMV to get plates.

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Question

Is there a sales tax that is to be paid?

Community Answer

Depends on the state. In NY, for example, the sales tax is paid when the vehicle is registered at the DMV.

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What's a bill of sale? How do I get that?

Community Answer

The bill of sale is a contract outlining the details of the sales agreement. The seller should create it. There are templates available online if you're not sure how to make one.

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At what point in this process do I secure insurance for the vehicle?

Community Answer

Before you go to the DMV to register your new car. In most states, proof of insurance is required before you can register the car and get new (your own) plates.

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Can I sign the car title if I don't have a license?

Community Answer

The buyer doesn't sign, other than the bill of sale. The owner signs over the title to the new owner. However, in many US states you need a license to register your car.

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Question

Is it risky to pay off the seller's loan before you receive the signed-off title pink slip?

Community Answer

The worst that can happen is they don't sign over the title and you lost your money, but at least their car loan is paid off! So, yes, it is risky.

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Question

What should I do if my used car has a mechanical problem?

Community Answer

If there was no warranty "expressed or implied", then you are on your own. Even if there is, you'll most likely have to go to arbitration or even small-claims court to prevail. Private parties in many states operate under the legal term "caveat emptor" ('buyer beware'). Note that terms like 'runs great', 'very clean', etc are not legally enforceable. Once purchased, you're stuck with it, so do your checks well before payment.

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What if the title is held by a bank?

Community Answer

Then ask to see the loan paperwork. Regardless, the bank has to approve the transaction. Most likely you are either taking over payments, or paying off the loan balance. Keep in mind either option may mean you're paying more than the car is worth (which may be why the car is up for sale in the first place).

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Question

If the seller will keep the license plates, can I drive the car?

Community Answer

Contact your local DMV for rules on license plates. However, in most cases, you are not allowed to drive the car without license plates, registration papers and insurance. If for any reason you are not able to obtain any of those three things, you will need to have the car towed to your home.

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Question

Can I drive home a vehicle purchased from private seller without a tag and registration?

Community Answer

In almost all places, you are not allowed to drive home the vehicle you purchased from a private seller if the vehicle does not have a tag and registration. You will be made aware of getting new tags/registration by the DMV when you sign the title over. If for any reason you are not able to get tags/registration, you must have the vehicle towed to your home.

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Question

How do I know that the car's papers are legal?

Community Answer

If the seller has the title in hand, a review of the title will show whether there is a lien on that vehicle. The name of the bank which holds the loan will be on the title.

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Question

What if the buyer makes an error on the car title transfer?

Community Answer

The buyer can just go to the DMV and correct whatever s/he needs to. The car is his/hers now.

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Question

Should I pay with a personal check, a bank check, or cashier's check?

Community Answer

Cashier's Check is the safest route. It prevent's any mishaps with the money and only the seller can cash it.

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Question

I bought a car from a private owner and it appears the check engine light was disabled. What should I do?

Community Answer

Disabling a check engine light is against the law as it is part of the vehicle's emission control system. You can threaten to sue for repairs in court. Consider that in states that require the seller to obtain an emissions test before selling, the light should have been operational at the time of the test, so it may be just a coincidence.

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Question

What if the title is not in their name?

Community Answer

Do not buy a vehicle from someone if the title is not in their name. The person who's name is on the title must be present at the time of the sale. Otherwise, you risk purchasing a stolen car.

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Question

I want to buy a used car from private seller. What do I sign once payment is made?

Community Answer

You should simply be able to have the seller write in the mileage and sign the back of the title after you pay and then go to the license branch. If there is a lien on the car, the seller will not have the title, so you will have to go to his lender and pay them off and they will lead you from there. Be 100% certain that the VIN on the title matches the VIN on the car. You will want to make sure that you have it insured as soon as you buy it. You are going to want to know what that cost will be anyway so talk to your insurance's company before the purchase and your agent will also most likely be very experienced, knowledgeable and helpful.

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