How to buy a used car from a private party safely

[spartana]

I haven't owned a car in years but had planned to buy a used one recently. I've never actually bought a used car before other then from friends or family so not sure how you go about dealing safely with a private party seller.  I had set aside $15k cash in my house to buy something but recently sold my house and returned that money to the bank now that I'm in a short term rental but will eventually need to buy a vehicle so looking for advice on buying from a private party.

So is cash or cashiers check the way to go? No one takes a personal check and I don't do venmo,  pay pal, etc. How do I make sure the vehicle title and the seller are legit and vehicle isn't stolen? How do I make sure I can transfer it to my name if there are title issues? I can use car fax to check vehicle condition but not sure about title ownership. Any other things I should know about?

[Rob_bob]

Both of you go to your local bank and get a cashiers check, then the seller can be sure the check is real, don't take cash.

Look at the title, check to see if it is branded in any way but I believe some issues might not show? Ask to see sellers ID, is their name on the title? I doubt anyone would fake a title but maybe it's easier than I think?  Compare the VIN of the title to the one on the car.  Maybe take the VIN to police and ask if they have any reports on it.

Google search shows:

VIN check: Use the vehicle's VIN to check with your state's motor vehicles bureau or other government agencies. The National Insurance Crime Bureau (NICB) offers five free VIN checks per IP address every 24 hours.

Vehicle history report: Get a report from the National Motor Vehicle Title Information System (NMVTIS) at vehiclehistory.gov. This can reveal title, salvage, and insurance loss details

[spartana]

Thanks for the info it's really helpful. I'm in Calif so smogging has to be done by the seller and must pass within  2 months of selling so that probably weeds out a lot of scammers. Also I have a AAA membership and believe I can find out some info from them but not sure about that. Unfortunately my small Credit Union with only a few branches in my 3 million plus population  county won't do more than a $5k/ day of cashiers checks or cash so that's why I had the money in cash to buy a car. Doubtful anyone selling would want to wait 3 days to get all the money due them. Plus, in my short look at PP ads, most want cash. Last time I looked at used cars I looked at local dealers and while the prices were a bit higher (and they always wanted to tack stuff on for extra cost) it seemed easy and safe.

[uniwelder]

I tried doing a search because I know this exact topic has come up multiple times, but I'm having trouble finding the thread.  Here's one that covers a little of what OP is asking, but mostly focused on other aspects--- https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-buy-a-car-(if-you-must)/

What really stuck with me, that I remember most vividly, was to do the cash transaction at either a police parking lot or DMV.  The police station will have lots of cameras and the person won't try stealing your cash.  At the DMV, you'll have experts right there who can process the title and handle plates, plus cameras inside.

[patchyfacialhair]

Thanks for the info it's really helpful. I'm in Calif so smogging has to be done by the seller and must pass within  2 months of selling so that probably weeds out a lot of scammers. Also I have a AAA membership and believe I can find out some info from them but not sure about that. Unfortunately my small Credit Union with only a few branches in my 3 million plus population  county won't do more than a $5k/ day of cashiers checks or cash so that's why I had the money in cash to buy a car. Doubtful anyone selling would want to wait 3 days to get all the money due them. Plus, in my short look at PP ads, most want cash. Last time I looked at used cars I looked at local dealers and while the prices were a bit higher (and they always wanted to tack stuff on for extra cost) it seemed easy and safe.

Only 5K a day in cashier's checks? Granted I'm not in CA, but i had no issue going into my local credit union to get a cashier's check to pay private school tuition (3x that amount). I'd double check that policy.

[Taran Wanderer]

Last time we sold a car private-party, the buyers had to take out a loan, and the bank had to see the car.  The downside was we had to go to the bank and wait while the paperwork was finalized.  The plus side was that the bank basically issued the cashier’s check directly to us, and we didn’t have to worry about the validity of the funds.

In other words, from the seller’s perspective, I like the bank idea.

[spartana]

Thanks for the info it's really helpful. I'm in Calif so smogging has to be done by the seller and must pass within  2 months of selling so that probably weeds out a lot of scammers. Also I have a AAA membership and believe I can find out some info from them but not sure about that. Unfortunately my small Credit Union with only a few branches in my 3 million plus population  county won't do more than a $5k/ day of cashiers checks or cash so that's why I had the money in cash to buy a car. Doubtful anyone selling would want to wait 3 days to get all the money due them. Plus, in my short look at PP ads, most want cash. Last time I looked at used cars I looked at local dealers and while the prices were a bit higher (and they always wanted to tack stuff on for extra cost) it seemed easy and safe.

Only 5K a day in cashier's checks? Granted I'm not in CA, but i had no issue going into my local credit union to get a cashier's check to pay private school tuition (3x that amount). I'd double check that policy.

I checked and they said any cash withdrawals over $5000,  which included cashiers checks, required advanced notification and had a ph# to call to set that up. It sounded like it would just take 24 hour to access the money beyond $5k. So if I knew in advance I could set it up for the next day.

Plus I like the idea of meeting at the bank to do the exchange. Although, unless I had the ability to get all the info on a vehicle as well listed above and to test drive it (maybe alone), it could still be a PITA and I'd probably still worry.

[spartana]

I tried doing a search because I know this exact topic has come up multiple times, but I'm having trouble finding the thread.  Here's one that covers a little of what OP is asking, but mostly focused on other aspects--- https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-buy-a-car-(if-you-must)/

What really stuck with me, that I remember most vividly, was to do the cash transaction at either a police parking lot or DMV.  The police station will have lots of cameras and the person won't try stealing your cash.  At the DMV, you'll have experts right there who can process the title and handle plates, plus cameras inside.

Thanks for the link. I did remember there was a thread about that but thought it was more of a "what kind if car should I buy" thing rather then how to buy a used car. Im pretty much a newbie and just assume you call the ad, set up a place to do a test drive and check out vehicle, check car fax, then swap money for a title and put it in your name (at the dreaded Calif DMV). But sounds like it's easier do a scam now then back in my teenage used car buying days of yore.

Just read thru the thread you link and it had lots of info I was looking for. So thanks again.

[uneven_cyclist]

I sold a $7000 car a couple of years ago.  There were a few transactions involved: a text responding to my ad, a phone call to schedule a time to meet, an initial meet to inspect the vehicle and take it for a test drive, and a third transaction where we met at an ATM in a busy public parking lot.  The ATM took deposits for my credit union.  The buyer handed me an envelope full of cash and I made a series of deposits while he waited.  Then he drove away.  By that point, I felt like I knew him fairly well and I wasn't really concerned about him ripping me off, but...ya it's a lot of cash :)

[AccidentialMustache]

I checked and they said any cash withdrawals over $5000,  which included cashiers checks, required advanced notification and had a ph# to call to set that up. It sounded like it would just take 24 hour to access the money beyond $5k. So if I knew in advance I could set it up for the next day.

Plus I like the idea of meeting at the bank to do the exchange. Although, unless I had the ability to get all the info on a vehicle as well listed above and to test drive it (maybe alone), it could still be a PITA and I'd probably still worry.

This sounds like a liquidity concern for the bank. You could trying calling and say "I'm buying a car with a cashier's check in the next few days my budget is $xyz" they may be like "cool go ahead we'll be ready."

It is worth asking, you may not need an exact amount or date and doing so should not obligate you to remove the cash in any way shape or form.

[spartana]

I checked and they said any cash withdrawals over $5000,  which included cashiers checks, required advanced notification and had a ph# to call to set that up. It sounded like it would just take 24 hour to access the money beyond $5k. So if I knew in advance I could set it up for the next day.

Plus I like the idea of meeting at the bank to do the exchange. Although, unless I had the ability to get all the info on a vehicle as well listed above and to test drive it (maybe alone), it could still be a PITA and I'd probably still worry.

This sounds like a liquidity concern for the bank. You could trying calling and say "I'm buying a car with a cashier's check in the next few days my budget is $xyz" they may be like "cool go ahead we'll be ready."

It is worth asking, you may not need an exact amount or date and doing so should not obligate you to remove the cash in any way shape or form.

It's a small local credit union so likely doesn't carry a lot of cash on hand. But they did say I can prearranged an amount over the $5k/day limit but I'd need to give them 24 hours notice or maybe a bit more. So that would be OK as long as I didn't find my dream car and had to buy it right now!

[Catbert]

If people really want "cash" you could pre-arrange with the credit union and meet them there the same as for a cashiers check.  Also double-check with AAA about what DMV functions they can do for you.  I *think* you can do the title transfer there.

[spartana]

If people really want "cash" you could pre-arrange with the credit union and meet them there the same as for a cashiers check.  Also double-check with AAA about what DMV functions they can do for you.  I *think* you can do the title transfer there.

Thanks for the reminder about AAA doing title transfers and even issuing a temp registration and lic plate. I did that once when I bought a friend's car and it was super easy. Having to.go to a Calif DMV strikes terror in most people's hearts. Mine included.

[Jaybo]

So this is what we did when we bought my daughter a car. 

She found one she liked in an ad and we contacted them for a test drive.  Did the test drive and she wanted to get it.  We then gave the sellers a $100 refundable deposit (personal check) to hold the car for us for 1 week and scheduled an inspection at a local Ford dealer and coordinated this with the seller (we paid for the inspection).  We also signed paperwork I typed out discussing all this, including driver's license info for both parties, and we each kept a copy.  On the inspection day, the seller's dropped the car off, we showed up at the same time to sign some paperwork and the dealer went through it with a fine-toothed comb...we were surprised how thorough the inspection was.  In the end, this car, which by all accounts so far seemed to be in great condition, needed $12,000 in repairs (on a $7,500 car).  We met the sellers at the dealership when it was done, went over the findings and walked away.  We let the sellers keep the inspection report and we got our $100 back, but we were out the $175 inspection cost.

Next week, same exact process except it was different sellers and a Nissan and we went to the Nissan dealership.  This time, it passed with flying colors and she decided to go through with it.  Sellers gave us back our $100 deposit and we set a date to meet them at our bank because my daughter was getting a loan.  We all showed up, both parties signed a bill of sale amongst other paperwork the bank required, they took the title and gave us the papers to take down to the DMV and register it and we called USAA and put an insurance policy on it.  As for the money, the sellers had their bank information and our bank just did a wire transfer to their account.  Simple.

Hope this helps give insight on how to go about it. 

[Rural]

When we bought a car last summer, we asked a million questions by text, then took a cashier's check for what I wanted to pay with us for the test drive. Had cash enough on hand to get up to the asking price if needed (another $500, I think, not that much).


Did the test drive, negotiated just a bit, bought with the cashier's check.


Negotiating may have been easier because it's a manual, and so the seller's pool of buyers was extremely limited.


On the title and VIN, I paid for an online VIN report from Carfax. That gives title info, service records, any flood damage. It's not perfect on accidents and the like because sometimes they aren't reported, but it's pretty good. Oh, also includes ownership records which is useful for seeing if the car has ever lived in snow country (=likely rust issues from road salt).

[spartana]

Thanks. @Jaybo I'm not sure I'd be able to find a seller willing to hold onto a car for a week or so for a $100 deposit around here but I could probably pre-arrange an inspection somewhere and have it done that day or within a day. Also could pre-arrange, or even get, a cashier check for the amount I'm willing to spend like @Rural suggested and car shop then. That was my original plan with cash. Bring a thousand or so with me for a deposit then have the rest at home to give the seller once I did a Car fax and could verify ownership.