A few weeks ago I wrote about our less than positive experience with a car dealership. Since then my wife and I have continued to look for a vehicle, and thus far, haven't been terribly successful. We've gone to a few more dealerships, and while none have been as bad as the one I wrote about, most simply aren't offering what we're looking for: a good deal on a used car. Lately we started to resign ourselves to just sit back and wait for a deal to show up so that we can pounce on it when it arrives, instead of actively looking so much. I was just settling into waiting longer term when one morning just after I arrived at work, I got an email from my wife saying that she found what looks like a good deal on craigslist. She called the gentleman, and he agreed to meet us after I was done work.

We met up with the seller, test drove the car, and everything looked great. At this point, I hadn't really thought about what would happen beyond this point, as I figured something would be wrong with the car that would make me want to walk away, but nothing was. So I stepped out of the car, and I froze. To be honest, I didn't know what to do. How do I buy a used vehicle in a private sale? Do I just write them a check and they hand me the keys? Do I need to fill out any paperwork? Do I pay tax on the purchase?
For most people, this might not be a problem, but for a young couple who has never purchased a vehicle before, buying from a dealership offers at least a sense of security that you can't get from a private sale. If you're unhappy with your purchase, there's a phone number to call to complain to. If you drive it off the lot and experience immediate regret, most dealerships will take the car back if you return it within a day or two. If you're struggling with understanding financing, or how the car buying process works, you're dealing with professionals that do this for a living – they can help you. You don't have any of those services when you buy a car directly from the owner.
So all of this is running through my head as I stand in front of the gentleman who is selling his vehicle. I do what I can to inquire about the origins of the vehicle, about why he is selling the car, and I inspect the vehicle as best I can. The problem is, through the back of my head, there's this little voice that's telling me, “It could all be a lie”. The sad, simple fact is: it could be. The seller advertised the car on craigslist, and while he seems very open and honest and straightforward, I just don't know for sure. I've heard stories of cars that were submerged in a lake for a month being fixed up and sold. I've heard of friend's who bought cars, drove them for years before finding out that they were stolen. I've read stories about craigslist scams, shady dealings, and all sorts of horror stories from private used car sales.
So coming home that night I did a bunch of research on what I can do to overcome these obstacles. First, one can use a service like CarProof to alleviate most of these fears. CarProof is a vehicle history reporting service. Basically they provide the entire history of the vehicle, including former owners, regular odometer checks, any repairs that have been done, if the vehicle has ever been reported as stolen, a lien check, insurance and accident claims information, the list goes on. If you're worried the car has ever been in an accident CarProof will tell you. If you're worried the car is stolen, CarProof will tell you. While the service isn't exactly cheap, at around $65, it is a worthwhile investment for a purchase that could easily go into the tens of thousands of dollars.
A second important task to take on when purchasing a used vehicle in a private sale is a mechanical inspection. For this, you have a couple of options. You can look it over yourself, you can bring someone with you, or you can bring the car to a mechanic to have a look at the vehicle. We have explored a couple of these options with the car seller, and we decided to purchase an inspection from BCAA, the British Columbia Automobile Association. Essentially, they provide a service where they will meet you at the location of the vehicle and do a 141 point inspection. This will cost about $150, which is certainly not a throwaway amount. It costs enough that you wouldn't want to do it on just any car you're looking at, but not so much that it isn't worth the cost when you're sure you want to buy a car. While we would have preferred to take it to the manufacturer’s dealership, the seller was hesitant because of time constraints, so we compromised by bringing the mechanic to the vehicle.
Again, like getting a vehicle history report, obtaining a mechanical inspection is a pretty crucial part of buying a used car. It will give you a great overall picture of the state of the car, everything from whether or not the frame is bent, to the amount of life left on the tires and brakes. Not only will this give you the best picture as to whether or not you should buy the car, it can also give you an edge in negotiating the final price of the vehicle, where you can point to upcoming necessary repairs.
These two steps are the best preliminary steps that you can take towards the purchase of a used vehicle. It will give you the full information required to purchase the vehicle, as it will offer you an extensive history of the vehicle, as well as a snapshot of the vehicle's health at the time of purchase. Based on this information, you can choose whether or not to take the next step towards the purchase of the vehicle, which is what my wife and I are planning on doing soon!

About Alan Schram

Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.