Steps to Buying a Car From a Private Seller
Buying a car from a private seller is different than purchasing from a dealer. Expect to complete your motor vehicle paperwork and financing on your own. Once you find the car you want, you'll have to take a few extra steps in the purchase process to ensure the vehicle is in good running condition and that the seller provides you with the correct paperwork to transfer ownership.
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Complete a Mechanical Inspection
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Have your potential purchase inspected by a mechanic. Unless you possess mechanical knowledge, having a professional inspect your vehicle can save you money. Mechanics can easily identify previous body work, which can affect vehicle value and safety. A mechanic will also let you know if the vehicle has been properly maintained, which is important for the vehicle's life cycle. Additionally, your mechanic can identify the need for necessary repairs, which can save you money. You may want to walk away from the purchase if repairs are expensive; otherwise, negotiate the vehicle's price to include the cost of any necessary repairs.
Secure Financing or Payment
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If you plan to finance you vehicle, arrange for financing before you shop for your car. You may wait until you find a car to purchase, but the approval process can take up to one week after you submit your application. If you obtain a preapproval, you'll only have to submit relevant vehicle information to your auto loan provider to receive your check. This way, you don't keep the seller waiting. Also, if you plan to retrieve money from an account, transferring or submitting for a withdrawal ahead of time will also save time once you find the car you want. Some account transfers can take over a week.
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Contact Your Motor Vehicle Department
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Paperwork requirements for car sales vary from state to state. Check with your state's Department of Motor Vehicle Web site, or call to find out which information you must provide to officially transfer vehicle ownership. You may find that you only have to submit a signed title, but many states require notarized signatures or accompanying documents, such as an odometer statement or a Bill of Sale. Many states do not allow title transfers while a lien holder is listed on the title. Make sure you have the documents you need in order to transfer ownership or require that the seller provide you with any documents that are his responsibility to provide, such as the vehicle's lien release.
Complete Paperwork
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Before you can complete your loan or register your vehicle, you'll need to supply proof of insurance (this is the case in most states). You may want to check prices of insurance before your purchase, so that you can budget appropriately. Most states also charge sales tax, so find out your area's tax rate and fees that may include inspection requirements, title and registration costs prior to purchase. This way, you can budget accordingly by having the extra cash ready when you title and register your car or arrange to finance the extra costs.
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