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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
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.


____________________________
Seller's Signature
  ____________________________
Buyer's Signature
________________
Date
  _________________
Date

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.

My Recommendation for Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Gregg Fidan

About: Gregg Fidan


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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